A virtual integration—The management control system in a multinational enterprise

Management control in multinational companies: a systematic literature review

“…Highly internationalized firms rely on setting goals and evaluating performance (Fee et al 2011;Kihn 2008;Mongiello and Harris 2006). Increasing geographical dispersion prompts the integration of non-financial controls (Kihn 2008;Mongiello and Harris 2006) and challenges management information systems not least due to the different locations of experts and operations across different time zones (Hyvönen et al 2008;Sheu et al 2004). In contrast to Gencturk and Aulakh's (1995) finding, that process control appears to be less relevant with increasing internationalization, Yu et al (2006) suggest that international experience has a positive effect on process control.…”

“…Reliable and timely reporting from subsidiaries requires detailed process descriptions (Schaaper et al 2011;Seal 2001) and some MNCs rely on expatriates to ensure direct reporting lines (Chang et al 2009;Jaussaud and Schaaper 2006;Schaaper et al 2011). MNCs frequently use integrated systems to achieve consistency in reporting (Al Chen et al 1997;Hyvönen et al 2008;Moilanen 2008). Hence, efficient reporting requires a coordinated approach of different control mechanisms.…”

“…Centralized MNCs place high emphasis on the transfer of the corporate culture to the subsidiaries (Al-Husan and James 2003; Williams and van Triest 2009). Introducing management information systems allows permanent information flow, which is essential for a centralized coordination of MNCs (Chang et al 2009;Hyvönen et al 2008;Schaaper et al 2011). These systems allow real-time monitoring and coordination worldwide, which either reinforce centralization tendencies (Finnegan and Ni Longaigh 2002;Hyvönen et al 2008;Quattrone and Hopper 2005) or strengthen local responsiveness (Al-Husan and James 2003;Finnegan and Ni Longaigh 2002;Quattrone and Hopper 2005).…”

“…Introducing management information systems allows permanent information flow, which is essential for a centralized coordination of MNCs (Chang et al 2009;Hyvönen et al 2008;Schaaper et al 2011). These systems allow real-time monitoring and coordination worldwide, which either reinforce centralization tendencies (Finnegan and Ni Longaigh 2002;Hyvönen et al 2008;Quattrone and Hopper 2005) or strengthen local responsiveness (Al-Husan and James 2003;Finnegan and Ni Longaigh 2002;Quattrone and Hopper 2005). The consideration of local specifics like language or legal requirements is key to launching such systems in foreign subsidiaries successfully (Avison and Malaurent 2007;Sheu et al 2004).…”

“…Since 2003, ten contributions have explored training as a control mechanism-often in the context of the implementation of output and process control-exclusively approaching the topic with qualitative research designs (e.g., Al-Husan and James 2003; Brenner and Ambos 2013; Sheu et al 2004). Formal and informal communication has been studied consistently over the whole period, though often as a side effect of other control mechanisms, such as communication accompanying budgeting processes, PMS or the implementation of management information systems (e.g., Busco et al 2008;Hassel and Cunningham 1996;Hyvönen et al 2008).…”