The Effect of National Culture on Management Control and Incentive System Design in Multi-Business Firms: Evidence of Intracorporate Isomorphism

Posted: 26 May 2003

See all articles by Wim A. Van der Stede

Wim A. Van der Stede

London School of Economics & Political Science (LSE)

Abstract

This paper examines whether variations in national culture at the business-unit level of multi-business firms that operate internationally trigger adjustments in the corporate management control and incentive systems (MCISs) to fit local business-unit circumstances. Although the results show that selected MCIS-characteristics are attuned to business-unit national culture, further analysis of multi-level data reveal small business-unit effects relative to corporate effects. The presence of dominant corporate effects suggests that MCISs tend to be uniformly implemented within firms, rather than to reflect local business-unit conditions.

Keywords: management control systems, incentive systems, national culture, intracorporate isomorphism

JEL Classification: M40, M46, M47

Suggested Citation

Van der Stede, Wim A., The Effect of National Culture on Management Control and Incentive System Design in Multi-Business Firms: Evidence of Intracorporate Isomorphism. European Accounting Review, Vol. 12, No. 2, pp. 263-285, 2003. Available at SSRN: https://ssrn.com/abstract=397940

Wim A. Van der Stede (Contact Author)

London School of Economics & Political Science (LSE) ( email )

Houghton Street
London, WC2A 2AE
United Kingdom
+44 (0)20 7955 7420 (Fax)

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