Control in Global Economy Essay Example | Topics and Well Written Essays - 1000 words

Control in Global Economy - Essay Example This study therefore chose to evaluate on this catchy trend in management control systems. Management control systems in the world differ. These differences make management practices in various parts and organizations different. One country’s proven management systems may not work appropriately in a foreign country. Lere and Portz (2005), in the CPA Journal, undertook a research to establish possible reasons that may inhabit the working of a management control system in the United States with a multinational corporation firm in a foreign country. Taking a case study of a U.S based Multinational Corporation; the effectiveness of her management control system would evidently differ from one country to another or even from one branch with diverse cultural inclination to another in the same country. Therefore, the following is a report from the investigation carried out. The report from an earlier research conducted by Hofstede was that culture differs in the following aspects; power distance, gender, individual versus collectivism and uncertainty avoidance. Three regions and fifty countries were used in the analysis. However, his taxonomy added another aspect that was used to analyze twenty three nations and this is Confucian dynamism. Hofstede found out that those cultural differences has numerous implications to the effectiveness of a management system. Countries with cultures regularly referred to as the small power distance countries are associated with participative decision making and decentralization whereas large power countries are normally associated with less participative decision making and centralization. This implies that different control management systems will suit a country on the basis of their mode of decision making. For instance, in a decentralized organization, management remains at low organizational levels while in a centralized system, management control system is at high organizational