One example of differences in the expectations regarding monitoring practices, and therefore in the need for coordination systems, is indicated by a study of Japanese and American firms- Exhibit 8-11 shows the mean responses of the American and Japanese managers concerning budget control practices in their firms. Ueno and Sekaran say that their research shows that “the U.S. companies, compared to the Japanese companies, tend to use communication and coordination more extensively, build budget slack to a greater extent, and use long-term performance evaluations to a lesser extent.” Further, Ueno and Sekaran conclude that those differences in reporting systems are attributable to the cultural variable of individualism in American society, compared to collectivism in Japanese society For example,.American managers are more likely to use formal communication and coordination processes, whereas Japanese managers use informal and implicit processes. In addition, American managers, who are evaluated on individual performance, are more likely to build slack into budget calculations for a safety net than their Japanese counterparts, who are evaluated on group performance. The implications of this study are that managers around the world who understand the cultural bases for differences in control practices will be more flexible in working with those systems in other countries.
The Appropriateness of Monitoring and Reporting Systems : Organizing Structure article from Formulating Implement Catagory The Appropriateness of Monitoring and Reporting Systems
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