Cross-cultural research in management control systems design

Description
This paper reviews cross-cultural research in management control systems (MCS) appearing in English-language
journals over the past 15 years. The objectives are to examine these studies for their convergence or otherwise with
respect to the state of our understanding of cultural e€ects on MCS design, and to analyse their theoretical and
methodological strengths and weaknesses to guide future research. The review identi®es four major weaknesses seen to
apply collectively to this research: (i) a failure to consider the totality of the cultural domain in theoretical exposition;
(ii) a tendency to not consider explicitly the di€erential intensity of cultural norms and values across nations; (iii) a
tendency to treat culture simplistically both in the form of its representation as a limited set of aggregate dimensions,
and in the assumption of a uniformity and unidimensionality of those dimensions; and (iv) an excessive reliance on the
value dimensional conceptualization of culture, which has produced a highly restricted conception and focus on cul-
ture, and placed critical limits on the extent of understanding derived from the research to date.

Cross-cultural research in management control systems
design: a review of the current state
Graeme L. Harrison, Jill L. McKinnon
School of Economic and Financial Studies, Macquarie University, New South Wales 2109, Australia
Abstract
This paper reviews cross-cultural research in management control systems (MCS) appearing in English-language
journals over the past 15 years. The objectives are to examine these studies for their convergence or otherwise with
respect to the state of our understanding of cultural e?ects on MCS design, and to analyse their theoretical and
methodological strengths and weaknesses to guide future research. The review identi®es four major weaknesses seen to
apply collectively to this research: (i) a failure to consider the totality of the cultural domain in theoretical exposition;
(ii) a tendency to not consider explicitly the di?erential intensity of cultural norms and values across nations; (iii) a
tendency to treat culture simplistically both in the form of its representation as a limited set of aggregate dimensions,
and in the assumption of a uniformity and unidimensionality of those dimensions; and (iv) an excessive reliance on the
value dimensional conceptualization of culture, which has produced a highly restricted conception and focus on cul-
ture, and placed critical limits on the extent of understanding derived from the research to date. # 1999 Elsevier Sci-
ence Ltd. All rights reserved.
A developing body of research in recent years
has been directed at understanding the relation
between national culture and the design of man-
agement control systems (MCS) in di?erent coun-
tries. This research has gained increasing
prominence for two reasons. First, it is important
to the business community. With increasing glo-
balization has come the opportunity and necessity
for companies, which may have operated pre-
viously in only their home country, to establish
international operations. The question of whether
those companies can transport their domestic
MCS overseas, or whether they need to redesign
the MCS according to the cultural imperatives of
the overseas nations, is of considerable practical
signi®cance. The research is also important to the
academic community. The design of MCS has been
a mainstream issue in accounting research for
many years. However, despite some early recogni-
tion of the importance of culture (French et al.,
1960 for example, with respect to budgetary par-
ticipation), the great majority of MCS research
has been conducted within single nations. In the
absence of examination of the in¯uence of culture,
models of MCS design are under-speci®ed.
Although cultural research on MCS design is
increasing, it remains relatively recent in that it
dates mainly from the 1980s, and may still be
considered exploratory. As such, it seems an
apposite time to review the studies to date with
respect to the state of our understanding of cul-
tural e?ects on MCS design, and to analyse those
Accounting, Organizations and Society 24 (1999) 483±506
0361-3682/98/$ - see front matter # 1999 Elsevier Science Ltd. All rights reserved.
PII: S0361-3682(97)00048-2
studies' theoretical and methodological strengths
and weaknesses with the purpose of guiding future
research.
1
This paper seeks to provide such a review, and
is organized as follows. The ®rst section brie¯y
discusses the movement from the comparative
international studies of MCS prior to the 1980s to
the culture-theoretic studies which have pre-
dominated in the past 15 years. These latter stu-
dies are then tabulated and reviewed in aggregate,
leading to the observation that while there is evi-
dence of some convergence building with respect
to the importance of culture's e?ect on MCS
design, there are also substantive disparities
among the ®ndings. The paper then identi®es, and
illustrates by reference to speci®c studies, four
major weaknesses in the research which may serve
to explain some of the disparities and to inform
future research. These weaknesses are: (i) a failure
to consider the totality of the cultural domain in
the theoretical development of some studies; (ii)
an almost universal tendency to not consider
explicitly the di?erential intensity of cultural
norms and values across nations, resulting in a
failure to distinguish between core and peripheral
values in theoretical exposition; (iii) a tendency to
treat culture simplistically both in the form of its
representation by a limited set of aggregate value
dimensions, and in the assumption of a uniform
and unidimensional nature of those dimensions;
and (iv) an excessive reliance on the value dimen-
sional conceptualization of culture which has pro-
duced a highly restricted conception and focus on
culture, and placed critical limits on our extent of
understanding.
The research reviewed is limited to studies
appearing in the main English-language research
journals. These studies have predominantly
focused on comparisons between a variety of
Asian nations and the Anglo-American nations of
the U.S.A. and Australia, although one study in
the review (Frucot & Shearon, 1991) focused on
Mexico. While one reason for the concentration
on Asian and Anglo-American nations has been
the appealing appearance of substantive di?er-
ences between Eastern and Western cultures,
nonetheless the geographic scope restriction of
such a concentration has to be acknowledged.
A further restriction on the scope of the paper is
imposed by a speci®c characteristic of the studies
which form the body of research in this area. This
characteristic is that the studies have been
informed almost exclusively by the value-dimen-
sional conception of culture in the cross-cultural
psychology literature, and, since the late 1980s,
have been even further restricted and narrowed in
focus through an almost total adoption of the
(psychology based) work of Geert Hofstede. As a
consequence, the research has ignored other rele-
vant literatures and perspectives on culture, nota-
bly those in sociology, anthropology and history.
This issue is identi®ed as the fourth weakness in
the extant research and is returned to later in the
paper in that capacity. However, it must be
acknowledged at the outset that the body of stu-
dies reviewed for this paper is subject to this nar-
rowness of focus, and that the paper itself is
therefore similarly restricted in the scope of its
review and analysis.
1. From comparative international to culture-the-
oretic research
Early comparative international studies, such as
Whitt (1979), which found di?erences in the level
of budgetary participation between U.S. and
Mexican companies, and Chiu and Chang (1979),
which found di?erences in the use of management
accounting techniques between U.S. and Taiwa-
nese companies, were criticised for their absence of
an underlying theory of culture. A similar criticism
applies to the later Daley, Jiambalvo, Sundem and
Kondo (1985) study of attitudes of Japanese and
U.S. controllers and managers towards aspects of
budgeting and control systems design. The criti-
cism was, that although these studies purported to
be cross-cultural, they were essentially atheoretic
about what culture was, and therefore silent on
what it was about culture that was associated with
the observed national di?erences. The criticism
1
Readers may also be interested in two other reviews of
cross-cultural studies in related areas in recent years; Smith's
(1992) survey of such studies of organizational behaviour, and
Gernon and Wallace's (1995) survey of culture-based studies in
international (®nancial) accounting.
484 G.L. Harrison, J.L. McKinnon / Accounting, Organizations and Society 24 (1999) 483±506
was expressed variously as culture being treated as
``a packaged, unexamined variable'' (Rohner,
1984, p. 111), ``an unspeci®ed independent con-
struct'' (Bhagat & McQuaid, 1983, p. 685), a
``black box'' (Pascale, 1978, p. 107), and a ``residual
category to explain things not accounted for else-
where'' (Kraut, 1975, p. 544).
Based on this criticism, advocates of cross-cul-
tural research in the early 1980s were calling for an
``unbundling'' of the cultural variable into its sub-
components, which could then provide the basis
for theoretical explanations of relations between
culture and other variables of concern. Bhagat and
McQuaid (1983, p. 685), for example, required
that di?erences in dependent variables ``should
not be attributed to di?erences in culture unless
and until components of the cultural construct
have been satisfactorily speci®ed in the study''.
Similarly, Child (1981, p. 330) argued, that for a
study to be e?ectively cross-cultural, it needed to
delineate theoretically which subcomponents of
culture were likely to be determinants of the
organizational and behavioural variables at issue,
and to postulate those associations in advance of
empirical study.
An example of the ``unbundling'' of culture into
components is the work of Hofstede (1980) who,
from his survey of employee attitudes in the world-
wide subsidiaries of IBM, disaggregated culture into
four norm values (which he termed ``dimensions'' of
culture): power distance (hereafter abbreviated to
PD), individualism (IDV), uncertainty avoidance
(UA) and masculinity (MAS). Subsequent research
identi®ed a ®fth norm value, Confucian Dynamism
(CD) (Hofstede & Bond, 1988). Hofstede (1984)
ranked 50 nations and three regional groupings on
each of the ®rst four of these dimensions, or compo-
nents, and Hofstede and Bond (1988) ranked 22
nations on the Confucian Dynamism component.
While there are alternative value dimensional
schema of culture developed both before and after
Hofstede's work (e.g. Parsons & Shils, 1951;
Kluckhohn & Strodtbeck, 1961; Triandis, 1995;
Smith, Dugan & Trompenaars, 1996), Hofstede's
typology, together with the country rankings con-
tained in his work, has been extensively, almost
exclusively, adopted by cross-cultural researchers
in MCS in recent years.
2. Cross-cultural MCS studies from 1980 to
1996: convergence and disparity
The literature search for this paper yielded 20
cross-cultural studies of MCS design appearing in
main English-language research journals since the
early 1980s. These studies are listed in chron-
ological order in Table 1, which shows the coun-
tries studied, sample size, research method, MCS
characteristics, and the cultural dimensions and
societal values relied on in each study.
As part of our review, we sought to assess the
extent of convergence or disparity in the studies in
terms of whether they provided evidence for or
against culture's e?ect on MCS. The criterion was
whether the results in each study supported or did
not support a culture±MCS association, judged
against the signi®cance level imposed by the origi-
nal authors.
2
While this review allowed an assess-
ment of reasonable convergence of support for the
e?ect of culture across a wide range of MCS char-
acteristics, such an assessment must be guarded
given the substantial diculties we encountered in
undertaking it.
First, as Table 1 shows, a great variety of MCS
and organizational characteristics has been exam-
ined, and there has been very little replication or
con®rmatory work done on those characteristics.
Even where more than one study has examined the
``same'' MCS characteristic, the operational de®-
nition of that characteristic has often varied, or
insucient de®nition has been provided to allow
some assurance of commonality. An example is
the MCS characteristic of formalization/rules and
procedures, which has been operationalized in a
variety of ways in the seven di?erent studies
shown in Table 1 as examining this characteristic.
Second, di?erent cultural dimensions have some-
times been drawn on in di?erent studies to support
the same culture±MCS linkage, and, even where
the same cultural dimensions have been used, dif-
ferent theories have sometimes been invoked.
2
No assessment of the speci®c nature of convergence or
disparity with respect to prescriptions or proscriptions of MCS
design in di?erent nations is attempted in this paper. Rather,
the focus is on the culture±MCS hypothesis generally, and on
the theoretical and methodological issues relevant to that
hypothesis.
G.L. Harrison, J.L. McKinnon / Accounting, Organizations and Society 24 (1999) 483±506 485
Table 1
Cross-cultural studies of management control system design post 1980
Study Country (sample size) Method MCS characteristic(s) Cultural dimension(s)/values
Lincoln, Hanada and Olson (1981) U.S.A. (522)
Japanese companies
in U.S.A.
Survey questionnaire Vertical di?erentiation
Horizontal di?erentiation
Hierarchical dependence
Rank
Paternalism
Birnbaum and Wong
(1985)
Hong Kong (93)
Multi-national banks
in Hong Kong
Survey questionnaire Centralization
Vertical di?erentiation
Horizontal di?erentiation
Formalization
Power distance
Uncertainty avoidance
Hierarchy
Daley et al., (1985) Japan (385)
U.S.A. (303)
Survey questionnaire Controllability; review by others
Autonomy in purchases; budget slack
Budget development/participation
Communication with budgets
Dollar vs quantities; evaluation with budgets
Short vs long run emphasis
Compensation; motivation
Analytic orientation
No speci®c cultural
dimensions drawn on
Lincoln, Hanada and McBride (1986) Japan (51)
U.S.A. (55)
Structured interviews
Survey questionnaire
Hierarchy height (vertical di?erentiation)
Functional specialization (horizontal di?erentia-
tion)
Centralization of formal authority
Participation in decision making at lower levels
of management
Hierarchical dependence
Rank
Consensus building
Snodgrass and Grant
(1986)
Japan (550)
U.S.A. (550)
Structured interviews
Survey questionnaire
Explicit vs implicit management control systems:
Monitoring; Evaluation; Reward
Hierarchy
Trust and interdependence
Harmony
Birnberg and Snodgrass
(1988)
Japan (550)
U.S.A. (550)
Structured interviews
Survey questionnaire
Implicit vs explicit management control systems:
Role de®nition
Information dissemination
Performance recording
Rule observation
Harmony and reciprocity
Co-operation
Group versus individual
Hierarchy and dependence
Kluckhohn and Strodtbeck,
(1961) cultural dimensions
Chow, Shields and Chan (1991) Singapore (96)
U.S.A. (96)
Experiment Work ¯ow interdependence
Pay interdependence
Individualism
Frucot and Shearon
(1991)
Mexico (83) Survey questionnaire Relation between locus of control, budgetary
participation, performance, job satisfaction
Power distance
Uncertainty avoidance
Vance, McClaine, Boje and Stage
(1992)
Thailand
Indonesia
Malaysia
U.S.A.
707Â68% response
Survey questionnaire Formality of structures and controls
Individual vs team development
Employee involvement in appraisal
Intrinsic versus extrinsic rewards
Feedback frequency
Uncertainty avoidance
Power distance
Individualism
Harrison (1992) Singapore (115)
Australia (96)
Survey questionnaire Relation between budgetary participation and
reliance on accounting performance measures
(budget emphasis) in manager evaluation
Power distance
Individualism
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Harrison (1993) Singapore (115)
Australia (96)
Survey questionnaire Reliance on accounting performance measures
in superior evaluative style
Power distance
Individualism
Ueno and Sekaran
(1992)
Ueno and Wu (1993)
U.S.A. (205)
Japan (247)
Survey questionnaire Formalizing communication and coordination in
budgetary planning processes
Budgetary slack
Controllability in performance evaluation
Length of time horizon in performance evaluation
Structure of budget planning process
(procedures and rules)
Time horizon in budget planning process
Individualism
Uncertainty avoidance
Harrison, McKinnon,
Panchapakesan and Leung (1994)
U.S.A. (104)
Australia (140)
Singapore (65)
Hong Kong (55)
Survey questionnaire Organizational design:
Decentralization
Responsibility centres
Planning and control:
Use of quantitative techniques
Planning time horizon
Group vs individual decision making
Formalization
Power distance
Individualism
Confucian dynamism
Chow, Kato and Shileds (1994) U.S.A. (54)
Japan (39)
Experiment Organizing:
Environmental uncertainty, Hierarchy height,
Centralization, Interdependencies,
Formal rules
Planning:
Top down planning, Standard diculty
Evaluating:
Controllability ®lters, Relative evaluation
Rewarding:
Individual-based rewards, Preset pay
Power distance
Individualism
Uncertainty avoidance
Masculinity
Lau, Low and Eggleton (1995) Singapore (112) Survey questionnaire Relation between budget emphasis, budgetary
participation and task characteristics a?ecting
job
related tension and performance
Power distance
Individualism
Merchant, Chow and Wu (1995) Taiwan (23)
U.S.A. (54)
Open-ended,
in-depth interviews
Size of performance dependent rewards
Group vs individual-based performance rewards
Long term performance incentives
Subjective vs objective performance evaluations
Power distance
Collectivism
Confucian dynamism
Uncertainty avoidance
Masculinity
O'Connor (1995) Singapore (125) Survey questionnaire Participation in budget setting
Participation in evaluation
Power distance
Chow, Shield and Wu (1996a) Taiwan (155) Survey questionnaire Decentralization, Structuring of activities,
Participative budgeting, Standard tightness,
Performance rewards, Controllability ®lters,
Reliance on accounting performance measures,
Participative performance evaluation
Power distance
Individualism
Confucian dynamism
Uncertainty avoidance
Masculinity
Chow, Kato and Merchant (1996b) U.S.A. (54)
Japan (28)
Survey questionnaire Control tightness
Procedural controls
Controls through directives at meetings
Collectivism
Power distance
Uncertainty avoidance
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7
Third, although the survey questionnaire has
been the predominant (almost universal) method
used to date, di?erences in sample sizes, manage-
rial level and location of respondents, and the
degree to which other variables are controlled for,
all contribute to a diculty in assessing con-
vergence or disparity in the ®ndings. The failure of
Vance et al. (1992) to control for the backgrounds
of respondents in their study is an example. Vance
et al. (1992) studied perceptions of management
performance systems in the U.S., Thailand, Indo-
nesia and Malaysia, expecting them to di?er
between the U.S. and the three Asian nations.
While some signi®cant di?erences were found in
that comparison, it was also found, contrary to
expectations, that there was as much di?erence
between the three Asian nations themselves as
there was between those nations and the U.S. A
methodological cloud on the Vance et al. (1992)
results is the considerable systematic variations in
the backgrounds of the respondents from the
Asian nations, particularly in the proportion who
had studied or worked abroad.
A further example is Birnbaum and Wong
(1985), who surveyed 93 Chinese managers in 20
multinational banks in Hong Kong to examine the
relation between job satisfaction and four ele-
ments of organizational structure; vertical and
horizontal di?erentiation, centralization and for-
malization. The home country of the banks was
used to proxy for culture, and the banks were
classi®ed into a cultural matrix based on Hof-
stede's (1980) rankings for PD and UA. However,
there was substantial variation in the distribution
of respondents across the cells. The data were
dominated by a concentration of the sample (64
out of 93) in the low PD/low UA cell, with low
numbers (12, 13 and 14) in the other three cells.
While our assessment of the studies in Table 1
showed evidence of some convergence building for
culture's e?ect on MCS characteristics (with the
caveat of the issues in the preceding paragraphs),
it also showed substantive disparities among ®nd-
ings, with a number of studies reporting the
absence of a cultural e?ect and others producing
equivocal results. The remainder of this paper
identi®es several key issues or weaknesses arising
from analysis of the research, which may help
both to explain some of the disparity in the results
to date, and to guide future research. These
weaknesses were noted earlier as: (i) a failure to
consider the totality of the cultural domain in
theoretical exposition; (ii) a tendency to not con-
sider explicitly the di?erential intensity of cultural
norms and values across nations; (iii) a tendency
to treat culture simplistically; and (iv) an excessive
reliance on the value dimensional conceptualiza-
tion of culture. Each of these weaknesses is now
discussed in turn.
The ®rst three issues relate to de®ciencies and
weaknesses with the way in which cross-cultural
MCS research to date has operationalized culture
within a functionalist conception based on norms
and values. Ways in which future research may be
enhanced within this conception are proposed.
The fourth issue relates to limitations imposed by
this conception of culture, and leads to discussion
of how other conceptions from the sociology,
anthropology and history literatures may allow
future research to open up new understandings of
MCS in cultural contexts.
3. Failure to consider the totality of the cultural
domain: omitted dimensions
As Table 1 shows, there has been a tendency in
many of the cross-cultural MCS studies to select
some cultural dimensions for use in the theoretical
speci®cation of the study, and to ignore others.
While all dimensions do not need to be present in
the theory speci®cation, they are of course present
in the empirics, in that respondent samples from
di?erent societies bring with them the totality of
those societies' cultures, not just the ones drawn
on in the theory. Consequently, the choice to omit
a dimension from the theoretical exposition of the
study must be taken on an equally theory-driven
evaluation of the irrelevance of the dimension to
the dependent variable or relation at issue. Chow
et al. (1991) is an example of good practice here.
Although they relied only on IDV in their experi-
mental study of work¯ow and pay inter-
dependence in Singapore and the U.S., they
demonstrated that IDV was the most relevant
dimension for the MCS characteristic they
488 G.L. Harrison, J.L. McKinnon / Accounting, Organizations and Society 24 (1999) 483±506
studied. Alternatively, the omitted dimension must
be otherwise attended to in the study's methodol-
ogy; for example, by matching the cultures under
study on this dimension. Harrison (1992, 1993) is
an example of where sample countries were mat-
ched on dimensions not implicated in the theory.
While there are examples of good practice in the
research reviewed, there are also instances where
the choice of dimensions and countries has not
been adequately motivated, with the result that a
partial explanation for some of the disparity in the
research ®ndings to date appears to lie in the the-
oretical omission of relevant dimensions.
Frucot and Shearon (1991) is an example. They
focused on budgetary participation, and sought to
examine the cross-cultural generalizability of
Brownell's (1982) study of participation among
U.S. managers. They hypothesized that Brownell's
results might not generalize to Mexico, on the
grounds that Mexican society was ranked (by
Hofstede, 1980) as higher on PD and UA than the
U.S., and that high rankings on these dimensions
would be associated with a preference for an
autocratic, rule-based organization, and for less
participation. Frucot and Shearon's results were
essentially contrary to their expectations. Although
the results suggested that some cultural e?ect might
be present in managerial level and ®rm ownership
subsets of their samples, their main ®nding was
that no cultural e?ect was present, and that
Brownell's U.S. results essentially did generalize to
Mexico.
However, although Frucot and Shearon noted
that the U.S. and Mexico also di?ered on the cul-
tural dimension of IDV (with Mexico more col-
lectivist), they did not formally incorporate the
likely e?ects of such a di?erence into their theory.
Yet a relatively substantial amount of literature
suggests an association between collectivism and a
preference for participation (Lincoln & McBride,
1987; Chow et al., 1991, p. 211; Harrison, 1992).
While concurring theoretically with Frucot and
Shearon that PD is an important cultural in¯uence
on reactions to participation, with high (low) PD
associated with negative (positive) reactions, Har-
rison (1992) argued that IDV is also an important
in¯uence which cannot be ignored in theoretical
speci®cation, with low (high) IDV being asso-
ciated with positive (negative) reactions. Thus,
Harrison hypothesized and found that if a society
were both high PD and low IDV (as is Mexico) or
low PD and high IDV (as is the U.S.), the poten-
tial e?ects of participation would be similar in and
hence generalizable to both societies. As this is the
result Frucot and Shearon essentially found, what
they interpreted as a non-cultural result based on
the theoretical inclusion of PD and UA alone,
may, in fact, be quite the opposite and evidence of
a culturally consistent ®nding with the theoretical
inclusion of IDV.
3
A methodological concern with the Frucot and
Shearon study is that they did not measure PD
and UA to provide support that their respondent
sample was re¯ective of the cultural dimensions
they were asserting for Mexico. While it may be
argued that such measurement is not necessary, on
the grounds that culture's e?ects are present in the
location of the individual in the society manifest-
ing that culture, nonetheless it seems sensible to
assess whether the respondent sample is consistent
in its collective values with that of the society it is
being used to represent. This is a methodologi-
cal concern widely applicable to the extant
research, in that few studies (exceptions are
Chow et al., 1991; Harrison, 1992, 1993; Harri-
son et al., 1994; and O'Connor, 1995) have
formally measured the cultural dimensions on
which they rely for their respondent samples.
A second example of omitted dimensions is
Birnbaum and Wong (1985), who drew on Hof-
stede's dimension of UA to hypothesize that Hong
Kong nationals would prefer lower levels of hor-
izontal di?erentiation than (by implicit contrast)
U.S. nationals. They formed this hypothesis
because ``Hofstede (1980, p. 315) found that Hong
3
This point needs to be made cautiously because Harrison
(1992) used Singapore and Australia to proxy for high PD/low
IDV and low PD/high IDV cultures, respectively. Thus, the
conclusion about the cultural consistency of Frucot and
Shearon's ®ndings relies on the assumption that the intensity or
relative importance of PD and IDV are the same in their e?ects
on participation in the nations studied by Harrison (1992)
(Singapore and Australia) and by Frucot and Shearon (1991)
(Mexico, and by implicit comparison, the U.S.). This assump-
tion may not hold as the following section dealing with the
issue of core and peripheral values will demonstrate.
G.L. Harrison, J.L. McKinnon / Accounting, Organizations and Society 24 (1999) 483±506 489
Kong employees had a strong preference for low
levels of uncertainty avoidance, which is
strongly associated with low levels of horizontal
di?erentiation (Hofstede, 1980, p. 187)'' (Birn-
baum & Wong, 1985, p. 265). Birnbaum and
Wong's results failed to support their hypoth-
esis. This is not surprising, however, in that
their hypothesis was developed by the selected
and abstracted juxtaposition of two separate
quotes from Hofstede, without consideration of
other cultural attributes of Hong Kong society
which are highly likely to a?ect preferred levels
of horizontal di?erentiation in that country.
Birnbaum and Wong's theoretically uncritical
selection of UA obscured a number of other
important considerations, including, most nota-
bly in this instance, the evidence from other
research. The anomalous situation arises for
Birnbaum and Wong whereby, although they
motivate their study from Lincoln et al. (1981),
they ignore the ®nding of that study in the for-
mulation and assessment of their theory. Lin-
coln et al. (1981) found a low level of
horizontal di?erentiation in Japan, a nation
where UA is high, whereas Birnbaum and
Wong hypothesized a low level of horizontal
di?erentiation in Hong Kong where, and
because, UA is low.
4. Di?erential intensity of cultural norms and
values: core and peripheral values
Table 1 shows that considerable research atten-
tion has been focussed on Anglo-American (parti-
cularly the U.S. and Australia) vs Asian
(particularly Japan, Singapore and Hong Kong)
societies, and has relied substantially on di?er-
ences across those societies in PD, IDV and UA.
Because the Anglo-American cluster nations are
typically regarded as higher IDV and lower PD
than the Asian ones, the studies have tended to
assume that IDV and PD are values maintained
with equal intensity and importance in each of
these nations. The extreme instance of this
assumption is Harrison (1992), who, as noted
above, predicated his hypothesis that responses to
participation would be similar in a low PD/high
IDV culture and a high PD/low IDV one, on the
argument that these composite cultures comprised
equal and o?setting levels of PD and IDV with
respect to their impact on participation. That is,
he assumed that the weight and intensity of the
dimensions of PD and IDV in the two nations he
studied were equal. However, as Lachman, Nedd
and Hinings (1994, p. 14) argue:
...not all values are equally important (in all
nations), or have the same impact in regulating
behavior. Cultural values ought to be di?er-
entiated in terms of the impact they have in
legitimizing and directing choices of modes of
organizing and patterns of managerial beha-
vior.
Lachman et al. (1994, p. 41) go on to argue that
``the impact cultural values have is determined by
their centrality within the value system of a cul-
tural setting more than by their prevalence in this
setting'' (emphasis added). They distinguish values
which are central to a culture as core, and those
which are not as peripheral, and contend (p. 41)
that ``the more important and central the value,
the stronger will be its impact and the more con-
sequential it will be for di?erences in organiza-
tional and managerial practices''. By extension,
the more central a value, the more enduring and
resistant to change it is, both across time and in
competition with contrary values. By contrast,
peripheral values are less stable and less enduring,
with members of the society either manifesting
di?erent levels of attachment to them, or even
disregarding them (Lachman et al., 1994, p. 42).
The concept of core versus peripheral values
may explain some of the disparity in existing ®nd-
ings from the cultural studies of MCS, and may be
useful in guiding future research. First, it may be a
potential explanation of the reported failure to ®nd
cultural e?ects in the results of Ueno and Sekaran
(1992) (and, by extension, Ueno and Wu (1993), as
both papers report the same study), and Birnbaum
and Wong (1985).
As Table 1 shows, Ueno and Sekaran (1992)
studied six budget control practices in manu-
facturing companies in Japan and the U.S. The
results were as hypothesized for four of the six
490 G.L. Harrison, J.L. McKinnon / Accounting, Organizations and Society 24 (1999) 483±506
practices. Compared to Japanese companies, U.S.
companies (i) used formal communication and
coordination in budget planning processes, (ii)
built slack into budgets, and (iii) practised con-
trollability of budgets to a greater extent, and (iv)
used long-term evaluation horizons to a lesser
extent. The remaining two hypotheses that Japa-
nese companies would structure their budget plan-
ning processes, and use long time horizons in those
processes to a greater extent than U.S. companies
were not supported. The supported four were pre-
mised on di?erences in IDV between Japan and the
U.S., and the unsupported two were premised on
di?erences in UA. Similarly, Birnbaum and Wong
(1985) found support for a greater preference for
centralization in decision making in Hong Kong
Chinese organizations (in implied comparison with
the U.S.), with this cultural expectation premised
on di?erences in PD; but found no cultural e?ect
for other structural characteristics when the cul-
tural expectations were premised on UA.
Ueno and Sekaran (1992) commented that there
appeared to be a di?erence in the relative sig-
ni®cance of IDV and UA within the national and
MCS contexts of their study; a comment which
may have been implicit recognition of the core
versus peripheral value argument of Lachman et
al. (1994). Relevant to both Ueno and Sekaran
and Birnbaum and Wong is that there is evidence
to suggest that IDV is a core value of both U.S.
and Japanese societies, and PD a core value of
Chinese society (Lachman et al., 1994, p. 49),
while there is also evidence to suggest that UA
may not be a core value in these societies.
Although UA was identi®ed in Hofstede's (1980)
study as one of the four dimensions on which
societies di?ered, and has been supported in other
studies (Bosland, 1984), the UA dimension was
not found to be present in the Chinese Value Sur-
vey (CVS) (Hofstede & Bond, 1988), or in Smith et
al.'s (1996) value dimensional analysis across 43
nations. The CVS results raise the question of
whether UA is a cultural dimension relevant only to
western nations (and discernible only in instruments
developed with western biases), while the Smith et
al. (1996) results question UA's relevance more
fundamentally. Further support for the irrele-
vance, or at best peripheral nature of the UA
value in non-western societies is the substantial
variation found among Chinese-based nations on
measure of this dimension.
4
An implication of core versus peripheral values
for research relying on value dimensional analysis
is that the basis for choice of the dimensions can-
not be made solely on grounds of di?erences in
national scores on the dimensions. While we noted
that Ueno and Sekaran (1992) may have implicitly
recognized the issue of core versus peripheral
values, that recognition was ex post and for-
tuitous, and arose because of the insucient theo-
retical premise for their choice of IDV and UA,
which was that these were the two cultural
dimensions on which the U.S. and Japan are
``maximally di?erentiated in Hofstede's empirical
study'' (Ueno & Sekaran, 1992, p. 662). Hence, it
was conjectured that these two dimensions ``would
explain ... any di?erences that might exist in budget
control practices in the two countries'' (Ueno &
Sekaran, 1992, p. 671). Their results and the
Lachman et al. (1994) work demonstrate that it is
not sucient to choose cultural dimensions on the
basis of their di?erences on Hofstede's (or others')
scoring alone. Rather, such choice must also be
informed by the centrality and intensity of the
dimensions in the contexts of both the societies and
the MCS characteristics at issue. Reinterpreting the
Ueno and Sekaran (1992) and Birnbaum and
Wong (1985) results in the light of core versus
peripheral values suggests that those of their
®ndings which did not support a cultural e?ect may
not be evidence of the absence of such an e?ect
4
On Hofstede's (1980, p. 165) country UA index (with an
observed range of 8 to 112 for low to high UA), Chinese-based
nations range from 8 (Singapore) through 29 (Hong Kong) to
69 (Taiwan). As an example of subsequent measures, Harrison
et al. (1994) administered Hofstede's original instrument to
managers in Australia, U.S., Singapore and Hong Kong. While
the scores for PD and IDV were consistent with Hofstede's
across all four countries for PD particularly, and IDV to a les-
ser extent, they were quite variant on UA for the Chinese
societies. Singapore was scored at 52 in Harrison et al. com-
pared to Hofstede's score of 8, and Hong Kong at 63 compared
to 29. Similarly, Cragin (1986), cited in Smith et al. (1996,
p. 121), used Hofstede's instrument with a PRC sample and
found high collectivism and high power distance (in accord
with Hofstede), but, in contrast to Hofstede's scores for
Chinese-based cultures, found a high score for uncertainty
avoidance.
G.L. Harrison, J.L. McKinnon / Accounting, Organizations and Society 24 (1999) 483±506 491
at all, but evidence, rather, of an invalid test of
culture through the use of peripheral or irrelevant
cultural values.
A second implication of the centrality of values
relates to research examining whether multi-
national companies need to modify their domestic
MCS to suit the national culture of a foreign
country, or whether they can create an organiza-
tional culture in the foreign subsidiary within
which their domestic MCS can be implemented.
Much of the research has been premised implicitly
on the former assumption, with Chow et al.
(1996a) lending evidence to support this by ®nding,
in their study of eight MCS characteristics in
Japanese and U.S. organizations operating in
Taiwan, that the organizations from both coun-
tries substantially modi®ed their MCS to suit the
di?erent Taiwanese culture. By contrast, O'Con-
nor (1995) found evidence of ®rms' modifying
(through selection, socialization and training) the
microcosmic organizational cultures of their over-
seas subsidiaries to suit the ®rms' home oce
MCS. This is not inconsistent with Chow et al.
(1996a); rather it suggests that organizations have
a choice, and that the choice is dependent on the
costs of modifying the organizational culture ver-
sus those of modifying and maintaining di?erent
MCS in di?erent nations. No research has yet
examined the cost/bene®t issue. However, when it
does, it will need to be cognisant of the centrality
of values issue. One of the criteria di?erentiating
core and peripheral values is their resistance to
change (Lachman et al., 1994, p. 41), suggesting
that the costs of modifying components of orga-
nizational cultures where those components
involve core national values are likely to be much
greater than where they involve peripheral values.
Lachman et al. (1994, pp. 50±52) provide a
matrix framework of core vs peripheral values at
both organizational and national levels, and sug-
gest abstracted strategies for organizational adap-
tation in each combination cell. While they suggest
di?erent strategies for each of the four cells, essen-
tially they argue that where a core cultural value is
involved, the costs of challenging that value and
seeking to change it are likely to be high in terms of
con¯ict, friction, alienation of organizational con-
stituencies, and impaired e?ectiveness. They provide
examples to ``suggest that even a very powerful and
culturally indigenous organization may ®nd it
more e?ective to accommodate core cultural values
than tochallenge them'' (Lachmanet al., 1994, p. 51).
While the Lachman et al. strategies are not directed
towards MCS, they are suciently generic to pro-
vide an informative model for future MCS work.
5. Simplistic treatment of culture
Perhaps the major weakness in the studies
reviewed for this paper is a tendency to assume an
excessive simplicity about the nature of cultural
values and dimensions, and to neglect the greater
depth, richness and complexity of culture and cul-
tural diversity, which those dimensions cannot
capture. Expressed one way, this is the tendency to
assume, for example, that ``PD is PD is PD'', and
that theory and empirical results associated with
one high PD country are therefore applicable to
other high PD nations. Harrison's (1992) frame-
work for studying the cross-cultural general-
izability of MCS, developed from his study of
participation in Singapore and Australia, is per-
haps the most striking example of this simplistic
approach. This is exempli®ed in his conclusion
that, because 32 other countries exhibit the high
PD/low IDV characteristics of Singapore and 15
the low PD/high IDV characteristics of Australia
(as reported by Hofstede, 1980), the ``results of
research into the e?ects of participation (in Singa-
pore and Australia) may therefore have wide-
spread application and generalizability cross-
nationally'' (Harrison, 1992, p. 13).
This conclusion is sustainable only on the
assumption that the form and nature of PD and
IDV, and their implications for MCS, are the
same across those 32 and 15 nations. Yet the
cross-cultural psychology and sociology literatures
provide evidence that this is not the case, with the
form and nature of these and other cultural
dimensions being quite di?erent among, and even
within, societies (Triandis, 1995). The dimensions
of PD and IDV are drawn on here to illustrate the
diversity and complexity of cultural characteristics
across and within societies. PD and IDV are cho-
sen because they have received the strongest
492 G.L. Harrison, J.L. McKinnon / Accounting, Organizations and Society 24 (1999) 483±506
concordance across value dimensional studies
(Schwartz, 1994; Smith et al., 1996).
5.1. Power distance (PD)
Lincoln et al. (1981) point out a major di?er-
ence in the nature of PD in vertical hierarchical
relationships in, for example, France compared to
Japan (two nations classi®ed in the high PD clus-
ter as scored by Hofstede, 1984, p. 214). They note
that while PD manifests in relatively rigid vertical
di?erentiation in social and organizational struc-
tures in both societies, the underlying reasons for
such manifestation are virtually opposite, leading
to contrasting rather than common expectations
for related issues such as MCS design. Drawing on
Crozier (1964), Lincoln et al. (1981) note that
bureaucratic rigidity in France is based on the
French distaste for relationships of personal
dependency.
Bureaucratic forms in France...are shaped to
allow organization under authoritarian admin-
istration while elaborate structural barriers
(rules, rigid division of labour) shelter employees
from personal dependencies (Lincoln et al.,
1981, pp. 93±94).
5
By contrast, drawing on Marsh and Mannari
(1976) and Rohlen (1974), Lincoln et al. (1981)
describe how an equivalent emphasis on vertical
di?erentiation in Japan is premised on a pre-
ference for paternalism and for high levels of
dependency and commitment in hierarchical rela-
tionships.
While Crozier saw French organizational
forms responding to the French need to avoid
dependency ties, vertical di?erentiation in
Japanese organizations can be traced directly
to a Japanese cultural expectation of relations
of precisely this sort (Lincoln et al., 1981,
pp. 95±96).
Whitley (1991) also discusses the dependency
and mutual trust nature of vertical relationships
in Japanese organizations, and allows insight
into how the form and nature of power distance
varies between Japan and other East Asian, par-
ticularly Chinese, societies, where PD translates
into a more authoritarian relationship between
superior and subordinate.
Japanese managers are not expected to be as
remote and aloof from subordinates as are
Chinese and Korean ones. A key part of their
role is to maintain high morale and perfor-
mance and they are less directive or didactic
than managers in Korean and Chinese ®rms.
These di?erences in managerial authority are
echoed by variations in employment policies
and practices which together generate
conditional loyalties in Chinese and Korean
businesses as opposed to...`emotional' loyal-
ties in Japanese kaisha (Whitley, 1991, p. 3;
references in the original quotation are
omitted.)
Bond (1991) also elaborates on the paternalistic
but more authoritarian relationship between
superior and subordinate in Chinese society com-
pared to Japan. Bond (1991, p. 79) notes that
Chinese managers:
spend less time consulting in large meetings,
reasoning with peers, persuading sub-
ordinates, making concessions within the
workplace...and...spend more time making
decisions alone, giving orders, supervising the
execution of those orders personally.
Thus, although the nations illustrated (France,
Japan and Chinese-based societies) may be clus-
tered as high PD, and distinguished from an
Anglo-American cluster of low PD nations, the
variation in the form and nature of power distance
in the high PD cluster, at least, means that it is not
sucient to premise MCS studies on an assumed
commonality of PD implications for MCS design
across these nations. MCS characteristics such as
participation, the use of implicit versus explicit
controls, and information ¯ows, are all likely to be
5
Triandis, McCusker, Betancourt, Iwao, Leung, Salazar
et al. (1993) provide empirical support for the strong rejection
of dependence in France in that, of the ten nations they studied,
rejection of dependence was strongest in France and was
accompanied by an equally strong rejection of sociability.
G.L. Harrison, J.L. McKinnon / Accounting, Organizations and Society 24 (1999) 483±506 493
di?erentially a?ected by the di?erent forms and
nature of PD in these nations.
With respect to information ¯ows for example,
Snodgrass and Grant (1986), in their study of the
relative emphasis on implicit versus explicit con-
trols in the monitoring, evaluation and reward
components of the MCS in companies in Japan
and the U.S., noted that the emphasis on the
hierarchy is a strength in Japanese ®rms in that it
contributes to more open lines of communication
and enhanced information sharing. This occurs
because the high degree of vertical di?erentiation
``eliminates the need to hoard information for
one's own career or advancement. Because everyone
knows what their personal interdependencies are (as
de®ned by the hierarchy), information can be
shared'' (Snodgrass & Grant, 1986, p. 214). Added
to this is the trust relationship which maintains
between hierarchical levels in Japanese organiza-
tions (Snodgrass & Grant, 1986, p. 215; Whitley,
1991, p. 3). Snodgrass and Grant (1986, p. 215)
argue, that because of the trust and personal
interdependence that underscores the hierarchy,
the hierarchy is ``probably the strongest control
mechanism in these (Japanese) companies''.
By contrast, the hierarchy may be seen as an
obstacle to the free ¯ow and open exchange of
information in Chinese-based organizations. Bond
(1991, p. 83) argues this way when noting the
more authoritarian and distanced nature of rela-
tionships in Chinese hierarchies.
Subordinates are less likely to volunteer opi-
nions, take individual initiative, or depart from
standard operating procedures without a super-
ior's approval. For the consequences of making
a mistake will devolve upon the subordinate
and there will be little institutional protection
against the superior's wrath (Bond, 1991, p. 83).
This authoritarian and distanced relationship,
combined with loyalties which Bond notes are
``only as wide as the immediate boss's range of
relationships...and hence...dicult to meld into an
organization-wide aliation...often results in
inter-departmental indi?erence, stonewalling, and
competitiveness in Chinese organizations'' (Bond,
1991, p. 84).
The foregoing examples which demonstrate the
substantially di?erent (indeed, opposite) e?ects on
MCS characteristics arising from di?erences in the
form and nature of PD in nations otherwise clas-
si®ed in aggregate as high PD, also demonstrate
the need for future studies to draw more deeply on
the literatures that allow a richer, more complex
understanding of the cultures of speci®c societies.
It is salutary to note that the examples given
(Lincoln et al., 1981; Snodgrass & Grant, 1986)
are both early studies in the research reviewed and
did not draw on Hofstede's (1980) dimensions.
Rather, they drew on in-depth sociological and
anthropological works on the speci®c countries
and cultures at issue (Crozier's (1964), sociology-
based treatise on French bureaucracy and Roh-
len's (1974) anthropological study of Japanese
``white-collar'' organizations). As such, they were
informed by a deeper understanding of the com-
plexity and diversity of culture in the nations at
issue than were the later studies in the review.
These later studies have tended to seize upon
Hofstede's aggregated and clustered dimensions,
and, as a result, have glossed over important dif-
ferences and nuances in culture and drawn
inappropriate and simplistic conclusions.
5.2. Individualism/collectivism (IDV)
The failure to recognize or capture the complex-
ity and diversity of culture in much of the cross-
cultural MCS research is evident also in the treat-
ment of Individualism/Collectivism (IDV). Devel-
oping in parallel with the MCS research is a
substantial body of research into individualism and
collectivism in the psychology literature, the results
of which suggest a number of important con-
siderations in the examination of IDV in cross-cul-
tural MCS research. Two of these are (i) the
complex factor structure of collectivism and the
variation in that structure among nations which
may, in more aggregate terms, be classi®ed as col-
lectivist, and (ii) the focus of collectivism in terms
of the de®nition of the ingroup.
5.2.1. Factor structure of collectivism
Triandis (1995) notes that there are a large num-
ber of di?erent types of collectivism and
494 G.L. Harrison, J.L. McKinnon / Accounting, Organizations and Society 24 (1999) 483±506
individualism. With respect to individualism, he
(1995, pp. 45±46, 95±99) provides examples of dif-
ferences between Swedish, North American, Aus-
tralian, British, German and French individualism.
With respect to collectivism, Triandis et al. (1993,
p. 377) argue, and demonstrate through their study
of 1614 people in ten countries, that ``cultures are
not 'monolithically collectivist' but that there is
substantial complexity in their tendencies towards
collectivism''. Their ®ndings for Indonesia illus-
trate their argument. While they found that Indo-
nesia shared values of a strong rejection of
separation from the group with some other col-
lectivist nations, and a strong emphasis on socia-
bility with others, they also found a number of
``collectivist'' factors which emerged uniquely for
Indonesia (including aliation without competi-
tion), and which therefore distinguished the form
and structure of Indonesian collectivism from that
of other equally strong collectivist societies.
Triandis (1989, 1995) also invokes Pelto's (1968)
distinction between tight and loose (or homo-
geneous and heterogeneous) cultures as an impor-
tant consideration in assessing e?ects of
collectivism. Tight cultures are ones in which
``norms and values of ingroups are similar (and
which are) rigid in requiring that ingroup mem-
bers behave according to the ingroup norms''; by
contrast ``heterogeneous societies have groups
with dissimilar norms (and) are ¯exible in dealing
with ingroup members who deviate from group
norms'' (Triandis, 1989, p. 511). Triandis (1989)
argues that there is considerable variation in the
degree of ``tightness'' or ``looseness'' within col-
lectivist nations.
This point allows potential explanation for
some of the disparity in prior cross-cultural MCS
research. For example, Triandis (1989, 1995)
determined that Japan constituted a tight collecti-
vist culture, while Thailand, China and India were
relatively loose, with Thailand being singled out as
a particularly loose collectivist culture. This is
consistent with, and may explain, the ®ndings of
Vance et al. (1992) in their study of performance
evaluation systems in Thailand, Malaysia and
Indonesia that the Thais seemed to be more indi-
vidualistic than collectivist when compared to the
other two East Asian nations. In explaining the
looseness of Thai collectivism, Triandis (1989,
p. 511) highlights Thailand's ``marginal position
between the major cultures of India and China''
with the result that Thai ``people are pulled in
di?erent directions by sometimes contrasting
norms, and hence they must be more ¯exible in
imposing their norms''. Added to this, Vance et
al. (1992, p. 322) noted the widespread in¯uence of
Theravada Buddhism in Thailand which stresses
tolerance for individual diversity and initiative.
Thus, the ®ndings of Vance et al., which may be
seen as anomalous from an assumption of com-
monality and uniformity of collectivism, are
explicable with recognition of the diversity of the
dimension's factor structure.
6
5.2.2. Focus of collectivism
There is a tendency in the cross-cultural MCS
research to assume that collectivist nations prefer
group situations over individual ones, with a vari-
ety of prognoses for, inter alia, participation
(Harrison, 1992; Lau et al., 1995; Chow et al.,
1996a), decision making processes (Harrison et al.,
1994), and incentive schemes (Chow et al., 1991;
Chow et al., 1994; Merchant et al., 1995); and that
such preferences are driven by a collectivist orien-
tation to the group situation generically and
absolutely. However, there is now considerable
evidence that the assumption of a generic orienta-
tion to group situations is invalid. In this respect,
Kagitcibasi and Berry (1989) point out that who
the group is makes a critical di?erence. They,
along with many other writers in this area such as
Earley (1993), Triandis (1989) and Bond (1991),
distinguish between ingroups and outgroups, and
contend that subjects from collectivist cultures
exhibit the behavioural characteristics typically
6
An additional complexity is the assumption that individu-
alism/collectivism is unidimensional. While Hofstede's scoring
of countries on this dimension suggests unidimensionality, and
MCS studies have tended to assume accordingly, the psychol-
ogy literature suggests otherwise. Kagitcibasi and Berry (1989)
show that individualism and collectivism are not mutually
exclusive. Similarly Bochner (1994), in his study of Malaysian
(collectivist) and Australian and British (individualist) subjects,
found that all three subject samples had more idiocentric than
group self-descriptions, although the ratio of group to idio-
centric statements was signi®cantly higher in Malaysia com-
pared to the two individualist cultures.
G.L. Harrison, J.L. McKinnon / Accounting, Organizations and Society 24 (1999) 483±506 495
associated with collectivism only with members of
the in-group; by contrast, ``with out-group mem-
bers their behaviour resembles that of subjects
from individualistic cultures'' (Kagitcibasi &
Berry, 1989, p. 517).
Triandis (1988, pp. 74±75) de®nes an ingroup as
a group whose members share many common
interests and traits and are concerned about each
other's welfare, with Kagitcibasi and Berry (1989)
and Triandis (1988) both demonstrating how the
meaning and membership of ingroups (and out-
groups) vary across collectivist cultures. Whitley
(1991), in his study of the social construction of
business systems in East Asia which contrasts the
Japanese kaisha, the Korean chaebol, and the
Chinese family business, makes the distinction
that the collectivist orientation of the Japanese is
towards the organization, and that of the Chinese
towards the family.
7
Thus, while the focus of col-
lectivism in Japan might be relatively closely
aligned with the organization, with the sharing of
interests at corporate level resulting in the
observed commitment to the organization of most
employees therein (Whitley, 1991), the situation is
di?erent in Chinese nations where the corporation
is likely to comprise multiple ingroups and out-
groups aligned with more restricted workgroups
within the corporation. This latter situation gives
rise to a number of observed behaviours in cor-
porations in Chinese collectivist cultures which are
not normally or generically associated with col-
lectivism.
8
The distinction between ingroups and out-
groups has not been clearly recognized or addres-
sed in the MCS research employing the
collectivism dimension, and may account for some
of the disparity or absence of ®ndings. Chow et al.
(1991), for example, hypothesized that people
from individualist cultures would perform better
under work¯ow and pay independence (i.e. inde-
pendence from groups and others), and people
from collectivist cultures would perform best
under work¯ow and pay interdependence (with
groups and others). Their results, obtained from
an experiment within which Singaporean and U.S.
university students undertook a task of translating
triplets of numbers into alphabetic letters via a
translation code, showed no, or only limited sup-
port for their interactive culture hypotheses. The
failure to ®nd the hypothesized e?ect may well be
attributable to the failure of their experimental
manipulation to establish the ingroup/outgroup
relationship with sucient reality and intensity to
activate the presumed collective behaviours. Chow
et al. (1991, p. 215) note:
Cultural individualism was controlled experi-
mentally by obtaining half of the sample from
Singapore and the other half from the U.S.A.
This manipulation was empirically successful,
as the U.S. subjects measured signi®cantly
higher in individualism.
This statement assumes that the act of assigning
people (in this instance, students) from collectivist
cultures to a generic group situation is sucient to
activate group oriented behaviour. However,
although the Singapore sample might have recor-
ded more ``collectivist'' scores than the U.S. sam-
ple on a pencil and paper IDV measure, it is
unlikely that the act of group assignment alone
was sucient to simulate the speci®c interpersonal
relationships and interdependency characteristic
8
Examples of such observed behaviours among members of
the same corporation but of di?erent outgroups within the
corporation include poor communication (Triandis, 1967),
counterproductive competitiveness, hostility and lack of trust
(Triandis, 1989, p. 516). Additionally, Earley (1993), in an
experiment involving collectivist and individualist subjects,
found that the individualists performed better alone than in a
group, and the collectivists performed best in a group situation,
but only where the group was an ingroup. Collectivists per-
formed better alone than in an outgroup.
7
This distinction was also pointed out by one of the
authors' postgraduate students through the analogy that Japa-
nese collectivism is a ``block of granite'' (Fukuyama, 1995, Ch.
14), while Chinese collectivism is a ``tray of sand'', with each
grain representing a family. By contrast with both Japanese
and Chinese society, the focus of collectivism in Indonesia is
the community. Termed pancasila, Indonesia's community
based collectivism is founded on a set of ®ve basic principles,
which are embedded in the Constitution and are inculcated
through the education system. The principles are belief in God,
civilized humanity, unity, consultation to reach consensus, and
social justice. Gotong royong (mutual assistance) is a main value
in pancasila, which brings together the multi-ethnic and reli-
gious groups that comprise Indonesia.
496 G.L. Harrison, J.L. McKinnon / Accounting, Organizations and Society 24 (1999) 483±506
of ingroups, which are, in turn, necessary to sti-
mulate the group oriented behaviours on which
the Chow et al. (1991) theory rested. By contrast,
Earley (1993), in his study of group vs individual
performance between collectivists and individual-
ists, went to considerable e?ort in his experimental
realizations to create the ingroup/outgroup status,
and to establish perceptions of shared character-
istics among ingroup members, including kinship,
friendship and religious backgrounds, as well as
general interests and lifestyles.
The di?erent foci of collectivism is also relevant
as a potential explanator of the results of other
MCS studies including Vance et al. (1992) and
Merchant et al. (1995). The variable and partially
inconsistent results of Vance et al. (1992) among
the three ``collectivist'' societies of Thailand,
Malaysia and Indonesia may well be a re¯ection
not only of the relative tightness and looseness of
collectivism in those societies (as discussed in the
previous section), but also of the di?erent focus of
collectivism. (See Footnote 7 for how the nature
of collectivism in Indonesia contrasts with other
Asian nations.) Similarly, Merchant et al. (1995)
developed and tested several hypotheses about
performance evaluation systems in the U.S. and
Taiwan, part of the theory for which rested on the
assumption that, as Taiwan was a collectivist
nation, there would be a culturally-driven orien-
tation of Taiwanese managers to the ®rm, i.e. that
the focus of collectivism in Taiwan is the ®rm.
That their results were largely inconsistent with
their hypotheses may well be attributable to the
question of whether this assumption is valid or
whether, as noted earlier, the focus of collectivism
in Chinese based organizations is aligned not with
the organization as a whole, but with more
restricted subgroups within the organization, with
consequences for competitive, rather than coop-
erative, behaviour among organizational sub-
groups.
The Merchant et al. (1995) study highlights the
need for a better understanding of the nature and
functioning of ingroups and outgroups in modern
Chinese organizations. We know little about MCS-
related situations in which the ingroup/outgroup
con¯ict is important (and where it is not), and how
the presence of other characteristics of Chinese cul-
ture, such as respect for hierarchical relations, con-
cern with face, and a sense of duty and loyalty,
a?ect the balance between a concern with ingroup
and a concern with company in di?erent MCS
contexts.
As for the conclusion of the earlier discussion of
PD, the reason that we know little about the
implications of the ingroup/outgroup distinction
for MCS, and that the cross-cultural MCS
research has not recognized or accommodated the
complexity of collectivism, again appears to result
from an unquestioned and uncritical reliance on
Hofstede's aggregate cultural dimensions. The
consequence of this reliance has been a corre-
sponding neglect of the richer and more indepth
understandings of individualism/collectivism (and
of culture generally) available in works dedicated
to describing and analysing the cultures of indivi-
dual societies. It is to these literatures that future
cross-cultural MCS research must turn if it is to
overcome the present simplicity in its treatment of
culture.
6. Restricted conception of culture
The foregoing sections of the paper have identi-
®ed a number of de®ciencies with the way in which
the cross-cultural MCS research to date has oper-
ationalized the treatment of culture within a con-
ception of culture that is based on norms and
values. Additionally, the paper has sought to dis-
cuss ways in which future research can be
improved within this conceptualization. However,
as noted at the outset, the restriction of the exist-
ing research to this conception of culture is itself a
weakness, and one which places critical limits on
the extent of understanding that can be derived
from such research.
By conceptualizing culture through the func-
tionalist lens of values alone, the research fails to
recognize that values are only one aspect of cul-
ture (Triandis, 1993), and only one way of con-
ceiving of culture (Wuthnow, Hunter, Bergesen &
Kurzweil, 1984; Agger, 1992). As a consequence,
the research fails to bene®t from other, post-func-
tionalist conceptions in sociology, anthropology
and history. The limitations on perspective
G.L. Harrison, J.L. McKinnon / Accounting, Organizations and Society 24 (1999) 483±506 497
imposed by the value lens are summarised by
Alexander and Smith (1993) as; (i) failing to
recognize the ``complexity and contingency of
human action'' (p. 151), and (ii) failing to explain
the ``characteristics and dynamics of speci®c
groups, organizations, and subsystems in concrete
social settings'' (p. 155).
The ®rst of these limitations is seen by Alex-
ander and Smith (1993, p. 155) to derive from the
fact that values are analytical constructs, typically
developed from observed behaviour, and, as such,
do not address ``the concrete thoughts, feelings
and emotive responses of members of a lifeworld''.
They argue, also, that while values comprise
meaning, they ``pitch meaning at a very general-
ized level under umbrella-like concepts (and,
hence, fail to provide) a detailed picture of the
internal workings of the cultural environment''
(Alexander & Smith, 1993, p. 155). In similar vein,
Alexander and Seidman (1990, p. 6) argue that the
functionalist value lens does not capture symbolic
phenomena such as ritual, myth, narrative, meta-
phor, language and code. The second limitation is
seen to derive from the perspective of the value
lens on shared (i.e. agreed upon) meaning, with
implications for the presumption of consensus in
societal existence which typi®ed functionalism
(Giddens, 1993, p. 721). Such a premise was seen
to conceal from this lens social structural con-
siderations (of power and economic resource dis-
tribution, for example), and the con¯icts and
tensions arising from asymmetries and di?er-
entials therein, which underscore the conceptions
of culture in institution and class based theories
(Alexander & Smith, 1993, p. 155; Giddens, 1993,
p. 721).
In response to the limitations on the value lens
perspective, post-functionalist approaches have
emphasised actor-centred and/or social structural
understandings of culture. These perspectives, and
the social philosophies underlying them, are mul-
tiple, diverse and contested in their base dis-
ciplines. Van Maanen (1988, p. 10) notes that: ``In
anthropology, for example, pitched battles are
fought on this issue (of what constitutes an ade-
quate cultural description and understanding)...
and similar controversies rage across several
sociologies''. Theoretical exploration of the multi-
ple perspectives and their contestation is beyond
the scope and purpose of this paper. However, of
great relevance to the paper is the contribution
that such perspectives can make in removing the
narrowness of scope imposed by the concentration
of existing cross-cultural MCS research on value
lens models. To this end, in the remainder of the
paper we draw attention to examples of such per-
spectives and some instances of applications which
may help guide future cross-cultural MCS
research.
One such perspective is that of Thompson
(1990), who conceives of culture as symbolic forms
in structured contexts and describes cultural ana-
lysis as:
the study of symbolic formsÐthat is, mean-
ingful actions, objects and expressions of
various kindsÐin relation to the historically
speci®c and socially structured contexts and
processes within which, and by means of
which, these symbolic forms are produced,
transmitted and received (Thompson, 1990,
p. 136).
Thompson gives the example of a speech which
cannot be understood in terms of its structural
features and systemic elements, but only by
attending to contextual aspects such as the setting
and occasion of the speech, the relations between
the speaker and the audience, and the media of
transmission. These aspects ``can be discerned
only by attending to the social contexts, institu-
tions and processes within which the speech is
uttered, transmitted and received and by analysing
the relations of power, forms of authority, kinds
of resources and other characteristics of these
contexts'' (Thompson, 1990, p. 145).
Similar conceptualizations of culture are con-
tained in the work of Giddens (1987) and Alex-
ander and Smith (1993). Giddens (1987) argues
that a theory of culture must be built upon a basis
of human agency, which, in turn, must be expli-
cated in terms of practical consciousness (the pro-
cess whereby humans ``re¯exively monitor what
they do as an intrinsic part of what it is that
they do'') and the contextuality of action (``set-
tings of action, whose qualities agents routinely
498 G.L. Harrison, J.L. McKinnon / Accounting, Organizations and Society 24 (1999) 483±506
draw upon in the course of orienting what they
do and what they say to one another'') (Gid-
dens, 1987, p. 215). Alexander and Smith (1993,
p. 16) conceive of culture as ``a system of sym-
bolic codes which specify the good and the
evil'', and argue through illustration how sym-
bolic codes are implicated in individual action
through both their internalization in informing
action and their external accountability for
action.
9
These conceptualizations of culture provide
opportunities for cross-cultural MCS research to
break o? the shackles of its hitherto reliance on
the value lens perspective, and to open up new
areas of understanding. First, they allow
opportunities for such research to move beyond
its existing static nature, which constrain it to
establishing (or not establishing) point-in-time
statistical associations between values as inde-
pendent variables and a?ective and/or beha-
vioural responses as dependent ones. With the
variables remote and unanchored in time and
context and their temporal and spatial depen-
dencies unexplored, and with associations
among the variables premised on assertedly
deterministic and equally unexplored meanings,
such research cannot explore the dynamics and
processes of MCS and their cultural interplays,
cannot get at the cultural meaning and sig-
ni®cance constituted in actions in MCS settings,
and cannot appreciate the spatial and temporal/
historical context of those processes and actions.
An example relates to the understanding of
participation in MCS contexts. Existing cross-cul-
tural MCS research generally corroborates an
association between culture (operationalized
through measurement of the power distance and
individualism/collectivism value dimensions) and
participation (measured using the Milani (1975)
six-item pencil and paper self-report instrument)
(Harrison, 1992; O'Connor, 1995; Lau et al.,
1995). However, with (and despite) the exception
of the insight into the involvement and in¯uence
sub-dimensions of participation in O'Connor's
(1995) ®ndings, these studies and their constrain-
ing methods reveal nothing about the various
forms participation may take in di?erent societies,
the various purposes participation may serve, or
the dynamics of the process whereby participation
takes place, including both the vehicles and
mechanisms it may use and the roles of di?er-
entiated actors in the participation process. Nor
can these studies gain understandings of the spe-
ci®c meanings, motives and signi®cations attrib-
uted to participation by organizational
members, or of the historical and social struc-
tural contexts within which such meanings,
motives and signi®cations are formed and embed-
ded.
While not concerned with participation per se,
Nussbaum-Gomes' (1994) ethnographic study of
control in the Japanese organization Mitsubishi
Heavy Industries provides an example of how the
foregoing conceptions of culture and their asso-
ciated methodologies can bene®t MCS research.
As part of her study, Nussbaum-Gomes examines
the phenomenon of informal group socializing
among Japanese employees after hours and in the
organized ``works outings'' and special parties.
While participation in such activities is espoused
as voluntary on an individual basis, the tendency
is that everyone always goes. A value driven
explanation for this behaviour might draw on the
maintenance of shared values of collectivism,
group (organizational) consciousness and cohe-
siveness, and harmony. While probably containing
some partial contribution to explanation, such an
explanation would nonetheless be facile.
Nussbaum-Gomes uses ethnographic techni-
ques to seek out the individuals' articulation and
9
While not seeking to constrain researchers in their choice
of the multiple perspectives o?ered in the contemporary
sociology, anthropology and history literatures, these perspec-
tives are chosen here because they appear to overcome some of
the criticisms of other perspectives. For example, Thompson
(1990), while stating his regard for Geertz's symbolic/semiotic
work as the most important formulation of culture in the
anthropology literature, provides several criticisms of this work
including its inadequate attention to the structured social rela-
tions (including those of power and con¯ict) within which
symbols and symbolic actions are embedded. Thus, Thompson
follows Geertz's symbolic interpretational conception of cul-
ture, wherein symbols and symbolic forms are the active
expressions of agents, but adds to it the spatio-temporal con-
text in which symbols and symbolic forms are embedded.
Similarly, Alexander and Smith (1993) criticise the actor-
centred and social structural conceptions generally for their
inability to attend to issues of meaning.
G.L. Harrison, J.L. McKinnon / Accounting, Organizations and Society 24 (1999) 483±506 499
meaning of these informal and organized social
activities, and demonstrates that employees inter-
pret and construct them not as voluntary but as
obligatory, and participate not as an intrinsic,
unre¯exive, manifestation of shared values, but
because of a conscious and knowledgeable choice
of self-interested action. Speci®cally, Nussbaum-
Gomes describes a situation where the values of
cohesiveness and harmony are not uncontested
among individuals, but where those values are
primary criteria for manager evaluation and pro-
motion and are known to be such, with the con-
sequences that social activities become symbolic
representations of organizationally valued beha-
viours. The conscious choice on the part of indi-
viduals to participate in them arises,
paradoxically, from their perceived absence of
choice, with failure to participate having real con-
sequences in adverse e?ects on evaluation, reward
and promotion.
This example is used not only to demonstrate
the importance of getting at the meanings indivi-
duals attribute to actions and choices, and the
speci®c structures, including power di?erentials,
surrounding those actions, (rather than leaving the
meaning link unexplored and unexplained except
in value-assertive terms); the example also
demonstrates the revelations and discoveries that
are possible through the approach Nussbaum-
Gomes employs. Of particular relevance to the
study of participation here is the ®nding that the
informal after-hours socializing and work outings
are forums for information exchange among
organizational members at all levels, and for
keeping individuals informed of, and involved in
organizational decisions. In their articulation of
what the socializing and outings meant to them,
employees described a situation where, if they did
not attend, they would not know what was going
on in the organization and their absence would be
noted and talked about. Thus, Japanese manage-
ment may be seen to construct the socializing and
outings, and the attendant climate surrounding
them, such that they play an important role both
in promoting information sharing among organi-
zational members, and in ensuring employees
are informed about, and become acceptive of,
management decisions. Such forums, therefore,
constitute in the organization concerned, and
potentially more widely in Japanese organiza-
tions, a signi®cant vehicle of participation, but
one which would not have been visible through
the value perspective and the methods employed
in the cross-cultural MCS research to date.
10
A second example relates to understanding how
management control systems are constituted holi-
stically in di?erent societies and how they operate
in terms of their processual dynamics. Chow et al.
(1994) pointed out that, contrary to most of the
cross-cultural MCS research to that time (and
since) which treated both national culture and
MCS as comprised of separate and independent
dimensions or component parts, both culture and
MCS are holisms, with MCS existing as packages
of mechanisms and processes which are in simul-
taneous dynamic operation, and which may serve
as substitutes or complements for one another.
Based on the presumption that such packages and
processes might di?er cross-nationally, and draw-
ing on cultural value dimensions, Chow et al.
(1994) examined, through laboratory experiments
involving Japanese and U.S. MBA students, whe-
ther the preference sets among eleven MCS char-
acteristics di?ered between the Japanese and U.S.
subjects. While they did ®nd di?erent preferences
and trade-o?s among preferences between the
samples, they were unable to disentangle and
explain the link between the cultural dimensions
and these compensatory trade-o?s.
This interpretation failing could support an
argument for more studies using the value con-
ceptualization of culture and the cross-sectional
analytical methodologies typical of the existing
10
As a reviewer for the paper pointed out, the Nussbaum-
Gomes study does not answer the question of whether the
Japanese companies construct the social activities to serve the
purposes of participation and information exchange, or whe-
ther the (corporate) values lead to the existence of the social
activities generically with a consequence that the purposes
identi®ed are subsequently served therein. At a general level,
this comment suggests that neither the values perspective,
which assumes a linear dominance of values over behaviour,
nor the alternative perspectives, which deny this linearity and
dominance, may be sucient in explanation. Rather, explana-
tion may need recognition of the greater complexity and
potential reciprocity of the interrelationship among collective
values, and individual actions and choices.
500 G.L. Harrison, J.L. McKinnon / Accounting, Organizations and Society 24 (1999) 483±506
cross-cultural MCS research, as part of the reason
for the failure was the lack of theoretical or
empirical work on some MCS characteristics.
However, an alternative argument is that the
attempt to articulate an holistic conception of
MCS through a value driven conceptualization of
culture and its attendant methodologies not only
places unmanageable demands on the interpreta-
tional capabilities of cross-sectional methods and
statistical analyses, but also misses the essence of
MCS holism that Chow et al. (1994) correctly
identi®ed, as well as missing the processual dyna-
mism and complexity of MCS.
Understanding the contemporary state of an
holistic MCS, where state does not imply stasis
but rather the processes and interactions among
actors and structures that constitute the dynamic
and complex life of the whole, is possible through
the interpretational perspectives and methodolo-
gies of anthropology, sociology, and history.
Janelli (1993) is a good example of how an
anthropologist using ethnographic methods of
participant observation and interviews and draw-
ing on narrative and history, can produce a rich
and complex description and analysis of the
dynamics of life and work among white-collar
workers and managers in a South Korean con-
glomerate. Van Maanen's (1988) ethnographic
study of police culture, again based on participant
observation and using narrative and stories, is
similarly insightful.
The emphasis on narrative and history in these
examples is integral to understanding the dynamic
functioning of contemporary MCS in di?erent
societies (and of broader systems such as the
organization of Janelli (1993), or of narrower ones
such as budget processes within MCS), and how
that functioning re¯ects and carries culture. Nar-
rative and stories are emphasised because of their
importance in conveying how people in the orga-
nization see and interpret how they ®t into the
social structural context: ``In talk, the agent and
the setting are the means whereby culture is linked
to communication'' (Giddens, 1987, p. 217).
Shearing and Ericson (1991) provide an opera-
tional example in their study of police culture.
They conceive of culture as ®gurative action and
discuss, and rely on, the importance of stories in
communicating and understanding culture.
Stories and the tropes that drive them, pro-
vide a very di?erent sort of `generative pro-
gram' from that envisioned when such
programs are rule guided. This conception
does not conceive of people as `cultural
dopes' (Shearing & Ericson, 1991, pp. 499±
500).
History is emphasised because of its importance
in understanding how a speci®c phenomenon (the
MCS for example) has reached its contemporary
state, particularly via the cultural, economic, and
social structural backgrounds that have led to that
state. Emirbayer and Goodwin (1994, p. 1411), in
their assessment of network theory in sociological
research, conclude that ``only a strategy for his-
torical explanation that synthesizes social struc-
tural and cultural analysis can adequately explain
the formation, reproduction, and transformation
of (as their particular phenomenon of interest)
networks themselves''. They point out the impor-
tance of culture and cultural structures in histor-
ical context and analysis for understanding how
actors are enabled and constrained in social
action. By way of illustration, Abelmann (1996)
cites several examples of anthropological studies
which have incorporated such historical analysis,
including Kondo's (1990) ethnographic study of a
Japanese factory wherein ``culturally, historic spe-
ci®c pathways'' were seen to o?er insight and
explanation into present phenomena. Similarly,
Janelli's (1993) study, noted earlier, also uses
Korean political, economic and social history to
inform his description of life in the Korean con-
glomerate.
Perspectives and methodologies from sociology,
anthropology and history, such as those described
and exempli®ed in this section of the paper, have
informed studies of organizations and organiza-
tional cultures for some time (see the December
1979 and September 1983 special issues of Admin-
istrative Science Quarterly on Qualitative Metho-
dology and Organizational Culture, respectively,
and subsequent issues for examples of such work),
as well as being called on in a variety of account-
ing research contexts (a review of the contents of
G.L. Harrison, J.L. McKinnon / Accounting, Organizations and Society 24 (1999) 483±506 501
Accounting, Organizations and Society over the
last two decades will yield examples of theoretical
and empirical work in this vein). However, such
perspectives and methodologies have not, to date,
informed cross-cultural MCS research, where they
have much to o?er.
7. Conclusions and suggestions for future
research
As we noted at the outset, cross-cultural MCS
research is still in its infancy. While it has pro-
gressed beyond its atheoretical stage to one where
most studies now consider culture explicitly, our
review suggests that we may have reached another
turning point at which we must reconsider the way
in which we approach culture in MCS research.
The research to date has been informed almost
exclusively by the value dimensional conception of
culture typical of the cross-cultural psychology
literature, and even more narrowly within that
conception, has relied almost totally on Hofstede's
value dimensions. While such reliance has
advanced our ability to conduct theoretically dri-
ven cross-cultural studies, it has also allowed us to
become lazy. Even within the value dimensional
conception, our review identi®ed three major
weaknesses in the studies to date. First, we
observed a tendency to be selective among the
cultural dimensions relied on in many studies with
a consequent failure to consider, theoretically and/
or methodologically, the totality of the cultural
domain as it may impact on MCS. Second, we
observed an almost universal tendency to treat the
dimensions as if they were equally important
across nations, with a corresponding failure to
consider the more complex issue of the di?erential
centrality or intensity of cultural norms and values
across societies. And third, we observed the ten-
dency to treat the value dimensions super®cially
through assuming a uniformity and uni-
dimensionality for each dimension that is neither
sustainable nor valid.
Concentration on the value dimensional con-
ception of culture, and the concomitant cross-
sectional methodology of variable relationships,
has also meant that the MCS research to date has
ignored other conceptions and perspectives on
culture, and their associated methodologies,
emerging from the anthropology, sociology, and
history literatures. As such, the research has been
highly restricted in focus, and limited in its ability
to examine and understand the dynamic processes
of MCS and their cultural interplays, the cultural
meaning and signi®cance constituted in the actions
of actors in MCS processes, and the spatial and
temporal contexts of those processes and actions.
For those who choose to work within the value
dimensional conception, much remains to be
done. For example, as noted earlier, there has
been little overlap in the MCS characteristics stu-
died to date, and, where overlap exists, typically
the methods of operationalizing the characteristics
have been suciently di?erent to make compar-
isons dicult. The research to date has, literally,
``grown like Topsy'' (a bit here and a bit there),
with no underlying systematic pattern and, hence,
with little cumulative addition to our knowledge
base. Even those authors who have concentrated
their e?orts in this area, and who have contributed
multiple studies to the literature, tend not to have
developed their studies sequentially, but rather to
have jumped from one MCS characteristic to the
next. While this tendency may be driven by a per-
ception of lack of peer acceptance of replication or
corroborative work, it seems clear that such work
is needed in future research in the cross-cultural
MCS area.
A number of other avenues for fruitful future
research have emerged from our review, our dis-
cussions with colleagues in this area of study, and
particularly from the insightful comments of the
anonymous reviewers for this paper. These sug-
gestions, while acknowledging in general terms
that replication work is needed, require that future
work targeting previously studied or new issues
must ensure organizational and managerial rele-
vance in the constantly changing technological
and competitive environment of the late 20th and
21st centuries, and also needs to recognize (and
examine) culture's interdependencies with other
important variables, as well as the culture±MCS
interdependency itself.
Taking this latter consideration ®rst, the major-
ity of the extant research has assumed that culture
502 G.L. Harrison, J.L. McKinnon / Accounting, Organizations and Society 24 (1999) 483±506
(comprising one or more of a set of component
dimensions) exists, and a?ects or interacts with
MCS, in isolation from or independent of other
variables or circumstances, including economic
variables of competition and markets, for exam-
ple, and technological, regulatory and political
circumstances. On the one hand, this is a limita-
tion of the existing research, with the omission of
such variables and circumstances, and the neglect
of their e?ect on the culture±control relation,
substantially circumscribing the research's poten-
tial to explain control characteristics. On the other
hand, it points to two important opportunities for
future research to include such variables along
with culture. An important theoretical issue for
future research is whether and how such non-cul-
tural variables interact (either in moderating or
intervening form) with culture in the culture±con-
trol relation. An important empirical issue is the
relative importance of cultural and non-cultural
variables in explaining control phenomena, inde-
pendently and/or in interaction. A further related
avenue for future research lies in the recognition
of the interdependency between culture and con-
trol in terms of their joint ability to a?ect out-
come variables. This would overcome the present
restriction of focus on the association between
culture and control, and allow examination of
more complete, multiple contingency relation-
ships.
With respect to outcome variables, future
research should also target culture's interplay with
those characteristics of organizational functioning
which are seen as increasingly necessary for suc-
cess in the contemporary business environment,
with its characteristics of unprecedented levels of
technological change, product and service innova-
tion, and intense global competition. Within this
environment, some of the ``traditional'' variables
studied in much of the extant cross-cultural MCS
literature may be dated. Although opinions will
di?er, we suggest that future research will be more
contemporarily relevant and productive if directed
less at issues such as vertical and horizontal dif-
ferentiation, formalization, responsibility centre
format, participation, and budget emphasis in
evaluative style, for example, (issues which are
themselves becoming less important in the general
management and control literatures, or are at least
assuming di?erent forms), and more towards
those operational capabilities needed to attain and
sustain organizational learning, adaptive ¯exibility
and innovation. In this latter context, future
research can usefully address the interplay
between culture and issues such as information
and experience sharing behaviours within organi-
zations, risk taking and innovative propensities,
and the development and maintenance of ¯exible
organization structures and interaction patterns,
such as the use of ¯uid workgroups and teams.
Other suggestions for future research have been
noted in the paper. At the speci®c level, these
include research into the nature and functioning of
ingroups and outgroups in modern Chinese orga-
nizations, and how such group interrelationships
a?ect MCS and organizational characteristics
such as, for example, information sharing. At the
general level is the potentially very fruitful ques-
tion of the relation between national and organi-
zational cultures, and whether organizations
operating internationally must accept uncritically
the national cultural dictates of their overseas host
countries, or whether through time and selection
and socialization practices those organizations can
modify national cultural in¯uences within their
overseas units through the creation of cultural
microclimates. As noted earlier, only two studies
have examined this issue and have produced con-
trasting results. Further work has the potential to
forge a coherent research agenda in this important
area.
Future studies using the value dimensional lens
are, therefore, clearly warranted. However, such
studies need to become more precise in their theo-
retical understanding and methodological oper-
ationalization of culture, and to address the
greater complexity and diversity of culture than
has typi®ed research relying on Hofstede. Such
studies need to recognize and accommodate in
their theory the centrality of values, perhaps using
the instructive core versus peripheral values
approach (an approach particularly pertinent to
the national vs organizational culture issue noted
in the paragraph above), and the ®ner partitioning
of culture and cultural dimensions, as evidenced in
the analysis of power distance and individualism/
G.L. Harrison, J.L. McKinnon / Accounting, Organizations and Society 24 (1999) 483±506 503
collectivism previously in the paper. To do this it
will be necessary to go beyond Hofstede's scores
and ranks and draw more deeply on the richer
social and cultural literatures and commentaries
for the speci®c nation(s) concerned.
Transcending Hofstede's scores and ranks will
also allow future research to address concerns
about the contemporary relevance of those scores
and ranks generated nearly 30 years ago. While
cultures, by de®nition, change only slowly, and
Hofstede's measures have received more recent
support (Smith et al., 1996, for example), the
rapidity and intensity of globalization in con-
temporary times has the potential to reduce some
cultural di?erences across societies, particularly
with generational change. Which cultural di?er-
ences may maintain and which may be reduced
through such global exchange and generational
change is a question meritorious of study in its own
right, and one which, again, would usefully be gui-
ded by the core versus peripheral values con-
ceptualization.
A ®nal methodological caution on the past and
future research relates to method. It was noted
earlier that the predominant, almost exclusive,
method employed to date has been the mail survey
questionnaire. It is unusual in research generally
for exploratory work to be conducted using the
survey method. Typically, this method is invoked
later in the development of a research area as
relationships among variables and phenomena at
issue are better understood through ®eld or
experimental methods. While the mail survey
questionnaire has allowed cost eciencies in the
conduct of cross-cultural MCS research, we may
have paid a price in its having yielded a lower level
of understanding of the phenomena than we might
have obtained with other methods or, at least,
with multiple methods.
The time and cost constraints of full ethno-
graphic studies probably mean that such methods
are not available to all, indeed even many,
researchers. For those who choose to look beyond
the value dimensional lens on culture, and this is
the only way in which the research can transcend
its present limitations of scope and focus, the
ethnographic methods and the conceptualiza-
tions of culture in the anthropology, sociology,
and history literatures are probably necessary and
o?er promising opportunities. Even for those for
whom such methods are unattainable, however, it
must be recognized that continued reliance on
mail survey questionnaires alone will continue to
restrict understanding and meaning. A potential
resolution to this dilemma is the use of ®eld based
surveys (a term usefully provided by one of the
reviewers of this paper), whereby the researcher
visits and gains insight into the context of the
research site(s) before administering and inter-
preting the data from his/her questionnaire. A
questionnaire administered in this context might
usefully include, in addition to closed-ended,
quantitative-based questions, open-ended ques-
tions which allow the researcher to explore
through discussion the complexities and interrela-
tions that underlie the respondent's answers to the
quantitative questions. This approach, which
o?ers the advantages of lower costs than full eth-
nographic studies and greater contextual under-
standing than mail surveys, may well be an
e?ective methodological step forward in cross-
cultural MCS research.
Acknowledgements
The authors wish to acknowledge the helpful
comments of Anthony Hopwood, two anonymous
reviewers, participants at the AOS Conference on
Comparative Management Accounting, Uni-
versity of Siena, November 1996, and participants
in the research seminar series at Warwick Uni-
versity Business School, the University of Ade-
laide, and Macquarie University.
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