2 Literature Review

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How did research on the effect of culture on MCS design evolve since the paper by Harrison & McKinnon?

Master Thesis

University of Groningen Faculty of Economics and Business

Vincent de Haan Paterswoldseweg 89A

9727 BC Groningen

E-‐mail: v.d.de.haan@gmail.com tel: 06-‐22524849

Student number: 1840746

Groningen, 18 Februari 2016

University of Groningen

Faculty of Economics and Business Administration MSc Business Administration

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Abstract

Purpose – The purpose of this paper is to see how the field of cross-‐cultural research has advanced, 16 years after the publication of Harrison & McKinnon(1999)

Design/methodology/approach – A literature review of 21 articles concerning cross-‐cultural MCS are analyzed based on the criticism and suggestions for future research of Harrison & McKinnon (1999).

Findings – Some of the suggestions seem to have been partially adopted, yet the majority of the research still makes the same mistakes, hindering the progress in this field of research.

Originality/value – There has not been a big review of this field of research based on the work of Harrison & McKinnon (1999), despite the fact his work is often cited..

Keywords Cross-‐cultural studies, Management Control Systems, national culture, Paper type Literature review

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1 Introduction

The process of economic globalization is causing businesses to face tough challenges in order to be successful (Javidan et al., 2006). As this process continues the research into international business is likely to be stay a dynamic area of study, as it has been for the past 4 decades ((Brewer & Venaik, 2010)).

Culture, both organizational and national, has been attributed to influence MCS (Birnberg & Snodgrass, 1988). MCS show differences in their functioning in different countries, due to national culture

differences (Harrison & McKinnon, 1999, Erez & Earley, 1993;. National culture can be defined as a national group’s norms, values, beliefs and behavioral patterns (Leung et al., 2005). Different modal personality structures or core values affect work motivation and preference for specific management controls (Bhimani, 1999).

Much research has investigated the influence of national culture on MCS (Awasthi et al., 2001; Harrison

& McKinnon, 1999) and predominantly the framework suggested by Hofstede (1980) is drawn upon by other researchers (Harrison & McKinnon, 1999; Williams & van Triest, 2009; Chow et al., 1999). Despite considerable critique on his framework (Baskerville-‐Morley, 2005; Javidan et al., 2006) it has also been validated by later research (Chow et al., 1999, Williams & van Triest, 2009).

At the end of the last century Harrison & McKinnon (1999) made a review of the then current state of research on cultural effects on MCS design in the previous 15 years. Their objective was “to examine these studies for their convergence or otherwise with respect to the state of our understanding of cultural effects on MCS design, and to analyze their theoretical and methodological strengths and weaknesses to guide future research” (Harrison & McKinnon, 1999, p. 483).

This review found several weaknesses in the research and, based on that, suggestions for future research were made. The weaknesses Harrison & McKinnon (1999) found can be divided into three categories:

1. Framework;

2. Methodology;

3. Wider context.

Firstly they find there has been a focus on value dimensional conceptions of culture in research. More specifically when using a value dimensional conception the framework by Hofstede(1980) is mostly used (Harrison & McKinnon, 1999). Even though the use of these conceptions have allowed for theoretical driven cross-‐cultural research, these simplified conceptions also mean the understanding derived from research using these conceptions is limited.

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Secondly Harrison & McKinnon (1999) find methodological weaknesses in the research included in their review. The mail survey questionnaire has been the dominant method used in cross-‐cultural MCS research. This method however is mostly used when there is already clear understanding of the relationships between variables, which is not the case in cross-‐cultural MCS research. Continuing to rely on this method will maintain the problem of limited understanding gained from research. Instead ethnographic studies or field based studies should be used (Harrison & McKinnon, 1999). In a field based survey the survey is not administered before more perspective into the sample site is gained through interviews and studying relevant data regarding that site. This will improve the researcher’s ability to interpret the data and understand the forces that influence their respondents (Harrison & McKinnon, 1999).

Finally the wider context of Culture should be included in future research. A common problem in cross cultural Management Control System (MCS) research is picking and choosing from cultural dimensions used in their research even though all dimensions affect the research sample and also expecting those dimensions to have similar effect across nations (Harrison & McKinnon, 1999). Harrison & McKinnon (1999) find that the research to date failed to consider the centrality and intensity of cultural norms, values, beliefs and behavioral patterns. For example in research focused on Anglo-‐American versus Asian context value intensity was assumed to be similar in nations of these specific contexts. Other important variables that are interdependent with culture, like changing competitive environment, technological innovations, regulation and political situation should be included in future research. This offers opportunities for theoretical contributions to the understanding of if and how other variables interact with culture in the culture-‐control relation. Also potential empirical contributions could be made in understanding the relative importance of other variables and culture on management controls. Another related issue is gaining better understanding how culture and control interdependently affect outcome variables and how culture interacts with organizational characteristics that are required in current-‐day, fast changing and competitive environment to affect those outcome variables, like organizational learning, their ability to adapt and innovate.

Harrison & McKinnon (1999) mention that research into the relation between national culture and organizational culture, and if through various efforts a specific organizational culture can be created to modify national culture influences, could offer useful results.

Also of interest could be investigating the effects of having multiple distinct groups within a nation or company with regards to their nature, functioning and interrelationships and how it affects the management control system and other organizational characteristics (Harrison & McKinnon, 1999)

Summarizing Future research should seek to gain a better theoretical understanding of culture, drawing from other cultural literature, a methodological departure from the mail survey questionnaire, and take into account differences in the intensity of values and the totality of the cultural domain (Harrison &

McKinnon, 1999).

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specifically has been done with the points made by Harrison & McKinnon (1999).

The goal of this paper is to fill that the gap of what has happened in this field of research and what has been done with the suggestions made by Harrison & McKinnon (1999). This is important because researchers still find unexpected results with regards to the influence of national culture on management control system design, finding either weak to no influence between these constructs or results contrary to hypothesized expectations (Chow et al, 1994; Merchant et al., 1995).

Therefor we review literature that addresses the issue of national culture’s influence on management control system design since the publication of Harrison & McKinnon’s (1999) review up until present day By doing so we, we aim to see to what extent the weaknesses identified by Harrison & McKinnon(1999), which we divided into three categories: Framework, Methodology and Wider context, are picked up by the scientific community and what progress is being made in understanding the National culture – Management control system debate in relation to these weaknesses

For this the research question for this review has been stated as follows:

-‐ How did research on the effect of culture on MCS design evolve since the paper by Harrison &

McKinnon (1999)?

The structure of this paper is as follows. Chapter 1 contains the introduction to this paper. In Chapter 2 a literature review of the key constructs that are examined is given. Chapter 3 will explain the methodology that is used in this paper. In Chapter 4 the Analysis of papers is presented. First the Framework is analyzed, followed by the framework and ending with Wider context. In Chapter 5 the results of the analysis will be discussed and finally Chapter 6 will contain the conclusion, suggestions for future research and the limitations of this research.

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2 Literature Review

In this chapter the concepts of national culture, management control systems and how national culture affects management control systems will be explained. The goal of this chapter is to get an overview of the relevant theories. This section is divided in 4 parts. First culture and cultural frameworks will be discussed, followed by definitions of Management control systems and how their functioning is influenced by national culture.

2.1 What is Culture?

There are many different, but very similar, definitions of culture, yet there is no consensus definition (Tayeb, 1994). There are however elements that are commonly used in most definitions. These are beliefs, values, norms, attitudes and meanings (Dorfman & House, 2004; Hofstede, 2001). One definition that is frequently cited is the one by Hofstede (2001): "the collective programming of the mind which distinguishes the members of one group or category of people from another." (p.9) He adds that cultural values are manifested in practices.

A similar definition comes from Birnberg & Snodgrass (1988) stating culture is “a filter for perceiving the environment. In that sense, culture is a conceptual system which, when combined with personality, sets the action and decision premises for individuals within a given culture group” (Birnberg & Snodgrass, 1988, p.448). In research it is generally accepted there are differences between groups in their cognitions, behavior and values, yet in cross-‐cultural research differentiation of groups is mainly done based on their shared cultural values (Tsui et al., 2007). Yet there is no consensus on a definition of culture and therefor researchers suggest focusing on more manageable concept (Geertz, 1973).

2.2 Cultural frameworks

Prior to 1980 most research on the influence of culture on management control systems was performed by comparing national differences in the functioning of management control systems between nations, without a clear theory of what culture actually is (Harrison & McKinnon, 1999). Since the 1980’s research was aimed more at getting better theoretical knowledge of culture and how it affects other variables by creating a cultural framework specifying culture’s subcomponents (Harrison & McKinnon, 1999).

Several different taxonomies of national culture have since been developed (e.g. Hofstede, 1980, 1991;

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et al., 2006; Steenkamp, 2001)

Hofstede (1980) defines 4 dimensions of national culture:

-‐ Power Distance (PDI); the expected and accepted level of inequality by members of a group.

-‐ Individualism – Collectivism (IDV); motivation either by group interest or by self-‐interest.

-‐ Masculinity – Femininity (MAS); a focus on achievement and success or on relationships and well-‐being.

-‐ Uncertainty Avoidance (UAI); the degree of acceptance of uncertainty.

Later on a fifth and sixth dimension were added to the national culture framework in Hofstede (1991) and Hofstede et al. (2010) drawing from the works of Bond (1988) and Minkov (2007).

-‐ Long-‐Term Orientation; efforts made focused on the present and past or the future.

-‐ Indulgence -‐ Restraint; the degree to which basic human desires related to happiness are indulged or restraint.

Although Hofstede’s contributions have increased understanding of national culture and the implications of cultural differences there are also some concerns with his work (Baskerville, 2003; Baskerville-‐Morley, 2005; McSweeny, 2002; Myers & Tan, 2002). Some of these critiques are:

-‐ for measuring cultural differences, a survey is not the proper method;

-‐ culture is not specific to nations;

-‐ employees surveyed in one multinational company are not representative for their nation’s populations;

-‐ the data used is too old;

-‐ the complexity of national culture is not captured in four or five dimensions.

Hofstede (2002, 2003) Did respond to these criticisms, however according to Baskerville-‐Morley (2005) he failed to address the points made to full extent.

An alternative to Hofstede (1980) is the cultural taxonomy of Schwartz (1994). Schwartz (1994) argues that Hofstede’s dimensions do not encompass all values present in culture, since the survey used in his research was not intended to measure national culture dimensions. Also the sample used in his research did not represent the wide variety of national cultures and the populations of those countries, due to the focus on IBM employees (Schwartz, 1994). In his framework Schwartz (1994) addresses and overcomes these limitations (Drogendijk & Slangen, 2006) by conceptualizing national culture values though systematically sampling, measuring and analyzing data that was acquired for this specific purpose (Schwartz, 1994). Schwartz (1994) identifies 45 individual-‐level values and reduced those to 7 cultural-‐

level values, sorted along 3 bipolar dimensions; Autonomy versus Embededness, Hierarchy versus Egalitarianism, and Mastery versus Harmony (Schwartz, 1994)

The dimensions developed by Trompenaars & Hampden-‐Turner (1998) cover how individuals and/or groups deal with each other and their attitude towards time and the environment and were all measured using four to six different value items. Their dimensions are; Universalism versus particularism,

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Communitarianism versus individualism, Neutral versus emotional, Defuse versus specific cultures, Achievement versus ascription, Attitudes to Time, and Attitudes to the Environment.

Like Schwartz’ (1994) framework the framework by Trompenaars & Hampden-‐Turner (1998) overcomes many of the limitations of Hofstede’s(1980) framework by offering substantiated theory and more recent data using refined samples (Magnusson et al., 2008).

Hofstede (1980), Schwartz (1994) and Trompenaars & Hampden-‐Turner(1998) have in common that they view national culture as shared set of values and norms which guides behavior, however they use different values to capture national culture differences (Magnusson et al., 2008).

A similar framework is the one by House et al. (2004). Different from the previously mentioned frameworks House et al. (2004) attempt to capture both values and practices, giving insight into how specific groups believe how things should be and how things really are (Magnusson et al., 2008).

The GLOBE project investigated the influence of culture on Leadership and organizational effectiveness in an aim to increase knowledge regarding cross-‐cultural interactions. This research has broadened it’s scope since it started, but the focus has always been on culture and leadership (Dorfman et al., 2012).

The 9 dimension of the GLOBE study (House et al., 2004) are Uncertainty avoidance, Power distance, Institutional collectivism, In-‐group collectivism, Gender egalitarianism, Assertiveness, Future orientation, Performance orientation and Humane orientation. Of the 9 dimensions specified in this research, 6 dimensions originate from the dimensions of Hofstede (1980). The other dimensions were derived from various other papers, thus replicating and expanding on Hofstede’s research (House et al., 2001). The main critique Hofstede (2006) has on this framework is that it has become too complex and the number of dimensions should be reduced for it to be experienced as useful. Javidan et al. (2006) responded to this and concluded researchers now have a choice to continue to use model by Hofstede (1991) or the more complex GLOBE model.

The Frameworks by Schwartz (1994), Trompenaars & Hampden-‐Turner (1998) and House et al. (2001) offer alternatives to Hofstede (1980, 1991,2010), yet they are still very similar. Researchers still mostly use Hofstede’s framework (Magnusson et al. 2008), because it’s results have been repeatedly confirmed in cross-‐cultural management control system design literature and there for comparability is assured (Smith et al., 1996). Different frameworks could improve understanding of culture (Harrison &

McKinnon, 1999). Much of the previous work shows theoretical en methodological weaknesses, therefor researchers should incorporate a more dynamic view of culture and Hofstede’s dimensions are found to be too simplistic and fail to capture the complexities of national culture (Yeh & Lawrence, 1995)

Despite being a good starting point for understanding national culture’s influence on organizations (Harvey, 1997), Hofstede’s framework ignores a variety of important factors (Smith, 1998). Much of the work in this area shows theoretical en methodological weaknesses and there for a more dynamic view of culture should be adopted (Myers & Tan, 2003).

Because cross-‐cultural Management control system research has focused on value-‐dimensional conception of culture and the accompanying methodology, it has largely failed to incorporate theories and methodologies from other fields of research. This has restricted our ability for advancements in this field of research (Harrison & McKinnon, 1999)

A good example is the paper by D’Iribarne (1996) who compared results from ethnographic research to results obtained with Hofstede’s (1980,1991) framework. Despite often offering smaller samples,

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2.3 Management Control Systems

Management controls are the processes to make sure the behavior and decision making of organizational members support the goals of the organization (Merchant & van der Stede, 2007).

Management control systems are the tools that are used to influence the behavior and decisions of organizational members through planning, monitoring, evaluation and rewards (Birnberg & Snodgrass, 1988; Simons, 1995).

The terms management accounting systems and management control systems can be confused, because of their similarity (Chenhall, 2003). A management accounting system is the structural use of practices like budgeting or product costing to achieve organizational goals. A management control system contains the management accounting system, but also includes personal and clan controls (Chenhall, 2003) Management accounting controls and personal controls are formal controls that measure and influence outputs and behavior (Ouchi & Maguire, 1975), clan controls however are more informal and center around shared values, beliefs and goals so that desired behavior is stimulated and rewarded (Das &

Teng, 2001). The level of Decentralization is an important factor in the design of a management control system. More decentralization allows for better adaptability to change and faster decision making, however it the cost of risking organizational members to more easily pursue their own goals instead of organizational goals (Williams, 2009).

2.4 The influence of National Culture on Management Control Systems

Research into the influence of national culture on management control system design is increasingly important in current day society. Increased globalization leads to organizations being active in multiple countries and different cultures. Whether or not the management control systems used by those organizations can be applied in other nations or that it needs to be adjusted to the different cultural values is a matter that can strongly influence its functioning (Harrison & McKinnon, 1999). Many authors report evidence that people from different national groups respond differently to management controls (Birnberg & Snodgrass, 1988; Hofstede, 1980,1991; Varela et al. (2010)).

There is evidence business practices can be exported to nations with similar national cultures, however when there are significant cultural differences this process can be less successful (Ryan et al.,2010). Yet the field of research has been hindered by conflicting and unexpected results (Chow et al. 1999). For example Chow et al. (1999), found no significant results for the influence of national culture on management control system design in Taiwanese multinational companies. Jansen et al. (2009) however did find significant results in their paper researching the influence of national culture on performance measures practices between the United States and the Netherlands. They find that national culture does influence performance measurement design independent from other situational factors. The cause for these conflicting results can be attributed to many causes (Harrison & McKinnon, 1999), like treating culture simplistically through a focus on value dimensional conceptualization of culture and not considering the totality of the cultural domain and the intensity of cultural values. These points will all be discussed later in the analysis.

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As stated in the Introduction Harrison & McKinnon(1999) find several flaws in research that restrict understanding of how National culture influences management control systems. His review offered an analysis of research from the previous 15 years and made suggestions how research should proceed based on the weaknesses in research that were observed. These weaknesses are not considering the totality of the cultural domain, the intensity of values, treating culture simplistically and overly relying on value-‐dimensional frameworks.

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3 Research Design

This part of the paper will describe the method used in this paper, how the data collection was structured and how the research question was developed.

3.1 Method

This paper aims to analyze how the field of research on the influence of National Culture on Management control systems evolved since the publication of Harrison & McKinnon (1999) and to what degree his critique and suggestions for future research have been adopted in the scientific community.

Therefor a literature review of papers published since then will be done, analyzing articles that research the influence of national culture on Management control systems on the framework they use, the methodologies they apply and to what degree the wider context is taken into account.

3.2 Data collection

The articles included in the sample for this review need knowledge claims regarding the influence of National culture on Management control systems, thereby excluding literature reviews. An even distribution of articles along the 16 year period is desired. Articles from recognized journals are preferred, But quality is most important.

Articles were searched on Business Source Premier, Science Direct and Google scholar. Only scholarly peered reviews from 1999 to 2015 are used in the analysis. A focus was on articles that have been cited by many authors. The review by Harrison & McKinnon (1999) was used as a starting point for finding articles. Authors that cited Harrison & McKinnon (1999) were studied. If they confirm to the requirements they are added to the sample. After that more sources are found by analyzing which articles are being cited in previous found articles, and which articles cite them. Also suggestions for articles that other people used in combination with the previously found articles are looked at. Emerald insight for example gives such suggestions. By checking subject terms of articles that fit the aims of this paper appropriate research terms are established.

Search terms used:

Management Control Systems, Management Controls, Management styles, National culture, FOREIGN subsidiaries, MANAGERIAL accounting, Cross-‐cultural studies, Cross-‐cultural, INTERNATIONAL business enterprises, ACCOUNTING methods, DEVELOPING countries, Decentralization, Budgeting

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This method led to the following sample of papers.

Paper Cited

Awasthi, Chow & Wu (2001) 43 Bhaskaran & sukumaran (2007) 70 Brock, et al. (2008) 104

Chanegrih (2015) 2

Choe (2004) 85

Chow et al. (2002) 101 Collins et al. (2005) 3 Douglas & Wier (2005) 54 Drogendijk & Holm (2012) 24 Efferin & Hopper (2007) 142

Etemadi et al. (2009) 38 Jansen et al. (2009) 62 Merchant et al. (2011) 15 Rouzies & Macquin (2003) 35 Tallaki & Bracci (2015) 2 Tsamenyi et al. (2008) 21

Tsui (2001) 102 van der Stede (2003) 76 Wickramasinghe & Hopper (2005) 135

Williams & Seaman (2001) 146 Williams & van Triest (2009) 37 Table 1: Number of times cited per paper.

Table 1 shows the 21 articles that are analyzed in this literature review. The publication date of the papers ranges from 2001 to 2015 and is fairly even distributed in that timeframe. The number of citations was taken from Google scholar. Although Google scholar results also includes unpublished papers, it does give some insight in how these papers have informed other research and improves the validity of using these papers. Comparing the year of publication and the number of citations shows a pattern. Older journals are cited more often and newer items less often. The exceptions are either more interesting or less interesting for our review.

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In assessing the quality of the papers also the journal they are published in was analyzed.

Journal Times used Impact

factor SOM

Journal of Personal Selling & Sales

Management 4 1.672 Accounting (TOP)

European Accounting Review 3 0.840 Accounting ( very good)

Accounting Forum 2 1.713 International Business (Very

good)

Journal Of International Business Studies 1 3.563 International Business

(TOP)

Journal of Business Ethics 1 1.326 Management General (Very

Good)

The international journal of accounting 1 - -

Cross Cultural Management: An

International Journal 1 - -

Asia-Pacific Journal of Management

Research and Innovation 1 - -

Journal Of International Accounting,

Auditing & Taxation 1 - -

Advances in Accounting 1 - -

Journal of Personal Selling & Sales

Management 1 - -

IUP Journal of Management Research 1 - -

Accounting Forum 1 - -

The Journal of international Accounting 1 - -

Management Accounting Quarterly 1 - -

Table 2: Journals, impact factor and SOM

The 21 papers in this review come from a wide range of journals. The journals that are most often used are also the ones that have an impact factor and are listed by SOM. The impact factor gives an idea of the relative importance of a journal by dividing the total citations of a journal by the number of citable papers.

SOM is the research school of the Rijksuniversiteit Groningen FEB department. They list the best journals according to topic for easily assessing journal quality.

As well as including papers from well-‐known and influential journals, some articles from lesser-‐known journals were included. However as seen in Table 1, all journals are getting cited by other literature.

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3.3 Research question

Based on the review of Harrison & McKinnon (1999) the central research question for this review was developed. In the Introduction 3 categories that relate to the criticism and suggestions for future research by Harrison & McKinnon (1999) were formulated. The sub questions were derived from the 3 categories, ensuring all criticism and suggestions are covered by our subquestions.

Research question:

How did research on the effect of culture on MCS design evolve since the paper by Harrison &

McKinnon (1999)?

Sub questions:

1 What frameworks are used?

2 What Methodologies are used?

3 Is the Wider context of national culture considered?

In the next chapter the Research findings and analysis will be presented. This is followed by the discussion of the findings and the conclusion.

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4 Research Findings and Analysis

In this section the previously formulated sub-‐questions will be covered in the order they are listed in the methodology section. First the framework used in research will be analyzed. More specifically we quantify how many times the specific frameworks are drawn upon, what values and dimensions are used and why these frameworks, values or dimensions were chosen.

Secondly the methodology of the papers analyzed in this review will be analyzed. The different quantitative and qualitative methods used will be addressed and to what extent the call by Harrison &

McKinnon (1999) for alternative methods than the survey questionnaire is responded to.

In the last section of the analysis we analyze the wider context that is addressed in the papers included in this review. We discuss the knowledge debates that are picked up by these papers, but also the specific national contexts studied and if they were able to prove their hypotheses.

4.1 FRAMEWORK

Through analyzing the cultural frameworks used in research since the paper of Harrison &

McKinnon (1999) an answer can be given to first sub question what framework is being used and if research still mostly relies on value-‐dimensional taxonomies (Hofstede, 1980, 1991, 2010;

House et al., 2004; Trompenaars & Hampden-‐Turner, 1997; Schwartz, 1994) or if different conceptions of national culture are being developed. The reasons for choosing specific frameworks could give insight into their approach and insight into the debate regarding the influence of national culture on management control system design.

Firstly an overview of the cultural frameworks that are being adopted in research will be given in Table 3.

Framework Papers

Hofstede

Awasthi et al. (2001, Brock et al. (2008), Collins et al. (2005), Chanegrih (2015), Chow et al. (2002), Douglas & Wier (2005), Etemadi et al. (2009), Jansen et al. (2009), Merchant et al. (2011), Rouzies & Macquin (2003), Tallaki & Braci (2015), Tsui (2001), van der Stede (2003), Williams & Seaman (2001), Williams & van Triest (2009) House Brock et al. (2008), Drogendijk & Holm (2012), Tallaki & Braci (2015)

Trompenaars Rouzies & Macquin (2003), Tallaki & Braci (2015) Schwartz Brock et al. (2008)

Other Bhaskaran & Sukamaran (2007), Collins et al. (2005), Efferin & Hopper (2007), Jansen et al. (2009) Tsamenyi et al. (2008), Wickramasinghe & Hopper (2005)

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Table 3 Framework diversity

4.1.1 Framework used

Harrison & McKinnon (1999) mention in their review that the value dimensional taxonomy, and more specific the taxonomy by Hofstede (1980, 1988, 1991), is the dominant theory in cross-‐cultural psychology literature. This focus has led to ignoring methodologies from anthropology, sociology and history literatures to get a more rich understanding of the interplay between National Culture and Management Control Systems.

Of the 21 papers in this review, 11 papers rely solely on the work of Hofstede (1980, 1991, 2010) or papers he co-‐authored (Hofstede & Bond, 1988; Hofstede & Soeters, 2002; Hofstede & Hofstede, 2005;

Hofstede et al., 2010). Of those papers 6 papers (Choe, 2004; Chow et al., 2002; Douglas & Wier, 2005;

Van der Stede, 2003; Williams & Seaman, 2001; Williams & van Triest, 2009) refer to Hofstede(1980) in which he defines his 4 cultural dimensions and 5 papers(Awasthi et al., 2001; Chanegrih, 2015; Etemadi et al., 2009; Merchant, et al., 2011; Tsui, 2001) also include later work in which the 5th dimension was added.

In 4 papers not a specific framework is being chosen, but still the framework by Hofstede(1980, 1991, 1997, 2010) is being used in combination with other frameworks.

Collins et al. (2005) used Laracantu’s (1989) Sex Role Inventory and added values from Hofstede (1984) and Hofstede & Bond (1988), which both contain the Masculinity versus Femininity dimension. Similarly Jansen et al., (2009) employ 2 dimensions of Hofstede(1980, 1991) and add a third dimensions adapted from Boselie et al. (2001), because these are all theorized to influence reward systems. Rouzies &

Macquin (2003) use 2 dimensions of Hofstede’s(1991) model and supplement that with 2 dimensions from the model of Trompenaars & Hampden-‐Turner(1997). Tallaki & Bracci (2015) state they do not use one specific model, instead they draw from Hofstede (1980, 1991), Trompenaars & Turner (1998), House (2004), and Hofstede et al. (2010).

Brock et al. (2008) mainly use the national culture variables from the House et al. (2004) GLOBE study and incorporates values from Hofstede (1980, 1997) and Schwartz (1994) to improve the reliability of their findings.

Differently the paper by Drogendijk & Holm (2012) uses just the framework of House et al. (2004), however they mention this framework is largely based on Hofstede’s (1980) framework.

4 Papers do not rely on any of the mainstream frameworks at all and use different theories to describe national culture. Bhaskaran & Sukumaran (2007) describe 9 different business entities with a distinct national culture. These classes were formed through reviewing a range of sources including articles, newspapers, trade literature and interviews. Among some of these sources were the works of Trompenaars (1994) and Hofstede (1991, 2001) which were also drawn upon for creating their questionnaire. Efferin & Hopper (2007) research the specific Chinese Indonesian culture based on

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Javanese values that affect the national culture. Wickramasinghe & Hopper (2005) chose to study culture by actually being in the specific cultural setting to be able to make their own interpretations of behavior that belongs to specific groups and events. They start from the bottom-‐up instead of relying on predetermined cultural dimensions that often fail to capture the totality and intensity of cultural values present and how those evolve over time due to interaction with other variables. These articles (Bhaskaran & Sukamaran, 2007; Efferin & hopper, 2007; Tsamenyi et al., 2008; Wickramasinghe &

Hopper, 2005) all research Asian context.

Overall the majority of these papers still use the Framework of Hofstede(1980,1991, 2010), or variations of this framework.

4.1.2 Why this framework?

Considering that despite the criticism on his framework a majority of papers in this review still use (parts of) Hofstede’s (1980, 1991, 2010) national culture framework, their motivations can explain the degree to which this criticism is taken into account.

Of the 11 papers that rely solely on Hofstede’s (1980, 1991) Framework 3 papers (Awasthi et al. 2001, Choe, 2004; Etemadi et al. 2009) did not explicitly mentioned reasons why this framework was adopted, other than mentioning it has been used in previous research.

Similarly Tsui (2001) only states that the national dimensions by Hofstede (1991) and Hofstede & Bond (1988) may be theoretically linked to the Management controls that are being researched. Neither of these articles mentions the criticism on this framework.

The remaining 7 papers that use Hofstede’s framework (Chanegrig, 2015; Chow et al., 2002; Douglas &

Wier, 2005; Jansen et al., 2009; Merchant et al., 2011; Van der Stede, 2003; Williams & Seaman, 2001;

Williams & Van Triest, 2009) all mention the reason for choosing this framework is because Hofstede’s (1980, 1984, 1991, 2001) framework is the most often used in studies of the effect of national culture on Management control systems. Chanegrih (2015), Choe (2004), Chow et al. (2002), Williams & Van Triest (2009) also note that Hofstede’s (1980, 1991) framework has since been validated by later studies repeatedly, claiming this framework is still relevant.

5 of the 7 previously mentioned articles (Chanegrig, 2015; Douglas & Wier, 2005; Merchant et al., 2011;

Van der Stede, 2003; Williams & Van Triest, 2009) mention the criticism on the Hofstede’s (1980, 1991) framework in their research. Even though Chow et al. (2002) and Williams & Seaman (2001) don’t mention the criticism, they do refer to the paper by Harrison & McKinnon (1999) which criticizes Hofstede based research.

As a major advantage of using this framework is given that it gives greater comparability with previous research (Chow et al. 2002; Douglas & Wier, 2005; Jansen et al., 2009; Merchant et al., 2011 Williams &

Seaman, 2001).

The 5 papers that use Hofstede’s (1980, 1991, 2010) framework together with theories and frameworks from other authors are all aware of the criticism on Hofstede’s work, yet they give several different reasons for still using the framework. Collins et al. (2005) use Hofstede (1980, 1984) and Hofstede &

2 Literature Review

Abstract

Table of Contents

1 Introduction

2 Literature Review

3 Research Design

4 Research Findings and Analysis