Culture and management control interdependence

New publication in Accounting, Organizations and Society

This study examines whether one of the central contentions of agency theory, that incentive contracting and delegation are jointly determined, holds in different cultural regions. Using survey data collected through structured interviews with top managers in 584 strategic business units across three Western cultural regions (Anglo, Germanic, Nordic), the results show that the interdependence between delegation and incentive contracting is confined to Anglo firms. In the Nordic and Germanic regions, strategic and action planning participation operate as a complement to delegation, while delegation is also complemented by manager selection in Nordic firms.

Malmi, T., Bedford, D.S., Brühl, R., Dergård, J., Hoozée, S., Janschek, O., Willert, J., Ax, C., Bednarek, P., Gosselin, M., Hanzlick, M., Israelsen, P., Johanson, D., Johanson, T., Madsen, D.Ø., Rohde, C., Sandelin, M., Strömsten, T., Toldbod, T., forthcoming. Culture and management control interdependence: an analysis of control choices that complement delegation of authority in Western cultural regions. Accounting, Organizations and Society. Published online 19 March 2020.


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