Consideration of the Cultural Element in the Design of Management Control Systems of Foreign Firms: Case Study

Abstract

In recent decades, researchers as Geert Hofstede (1997) and Fons Trompenaars (1994) began to study the role of national culture in the design of management control systems of organizations on the assumption that national culture appears as an important factor in managing the company. The so-called “divergent current” proposed to examine the impact of these differences on leadership styles, negotiation, people management, motivation and conflict management on the premise that the particular conditions require specific solutions, which can become inadequate when applied in other contexts. This study aims to identify if the cultural element is considered in the design of management control of foreign companies. It was examined the case of two organizations of foreign share control located in Rio de Janeiro that belong to dimensions: high hierarchical distance, collectivism, feminine, high uncertainty control, proposed by Hofstede. The results obtained suggest that some aspects of Brazilian Culture are preserved; but on the other hand, there is a transfer of management practices developed in countries of different cultures that consequently generate some conflicts in organizations.