An exploration of how the national culture in which a company operates affects the choice of Management Control Systems

Sammanfattning: Throughout this thesis, our research dives into the intricate relationship between national culture and management control systems (MCSs) in multinational corporations. In an increasingly globalized business world, understanding this relationship is pivotal for companies operating across diverse cultural landscapes. The thesis uses a qualitative exploratory multiple case study approach, focusing on Electra Global's operations in Europe and South America. Through in-depth interviews with seven employees and managers across these regions, our study seeks to uncover how regional culture influences the choice and effectiveness of MCSs within the same multinational corporation. The thesis primarily draws upon Hofstede's cultural dimensions and Merchant's and Van Der Stede's work on MCSs as theoretical braces. Previous findings suggest that cultural values, particularly individualism and power distance, significantly impact the implementation and preference for different types of MCSs. The European context, characterized by low power distance and high individualism, aligns with a management style that minimizes behavioral constraints and empowers employees. In contrast, the Latin American context, especially in Peru, exhibits higher power distance, leading to a more structured and controlled MCS approach. However, variations within the same cultural regions indicate that organizational culture and the centrality of cultural dimensions also play crucial roles. This study contributes to the existing literature by not only exploring under-represented regions (Latin America) in MCS research but also by highlighting the importance of distinguishing between central and peripheral cultural values in cross-cultural management studies. It challenges and extends previous research findings, thereby opening avenues for further studies in the field of management control systems and their interplay with national culture. 'Please note that Electra Global will be used as a pseudonym for a German multinational technology conglomerate.