The Use of Management Controls in Different Cultural Regions: An Empirical Study of Anglo-Saxon, Germanic and Nordic Practices

This study addresses differences in management control practices in Anglo-Saxon (Australia, Canada), Germanic (Austria, Belgium, Germany), and Nordic firms (Denmark, Finland, Norway, Sweden). Unique data is collected through structured interviews from 688 strategic business units (SBUs) in these countries. We find differences across cultural regions with regard to how managers delegate decision rights to their subordinates, establish multidimensional reporting lines, involve subordinates in cross-functional tasks, and involve subordinates in strategic planning activities. We also find differences in the comprehensiveness of plans, purposes of performance measurement and evaluation, and the importance of interactively using budgets and performance measurement systems. Furthermore, we find differences in the nature and bases of rewards and variable compensation. Regarding cultural controls, differences are identified in recruitment and socialization practices. Implications of these and other findings for both theory development and practice are discussed.