Management Control Systems in MNCs

Key Questions to consider

• What is the Role of National Culture in Business and

Management ?
• Do various cultures differ in their approaches to Management ?
• What is the best way to think about culture and International
Management ?
• What problems are encountered when doing business across
cultures, and how can managers tackle them ?

Reading: HBS Article : National Culture and Management

 Management Control Systems in MNCs
Key Topics covered

• Defining Culture
• Scope of Culture
• Dimensions of National Culture
• Culture in Management Settings

Reading: HBS Article : National Culture and Management

 Defining “Culture”
• Culture: a shared system of meaning, ideas and thought
• Code through which patterns of conduct are communicated
and interpreted through use of words, gestures and objects
• Culture guides our perception and understanding of world,
and shapes our behaviour
 Dimensions of National Culture

“Silent” languages of Culture

• Language of “Time”
• Language of “Space”
• Language of “Material Goods”
• Language of “Friendship”
• Language of “Agreement”
 Indices of work-related values
• Individualism vs. Collectivism
(Tendency of people to see themselves as individuals vs. members of
a group; Individual achievement vs. team achievement )

• Power Distance
(Degree to which members accept uneven distribution of power &
participation in decision-making, across different levels of hierarchy

• Uncertainty Avoidance
(Extent to which people seek to avoid, or feel threatened by,
ambiguous of risky situations)

• Masculinity ( achievement orientation, assertiveness and

material success)
vs. Femininity (relationship building, quality of life…)
Work-related values for select countries
 Impact of Culture in Managerial interactions

• Developing awareness of different national cultures

• Developing awareness of own cultural behaviour
• Question implicit assumptions about time, expression of
agreement, disagreement and power distance
• How does one’s own assumptions get reflected in behaviour and
interactions in business settings ?
 Culture in Management Settings

• Interactions between Firms

– Negotiations with Suppliers
– Dealings with Customers
– Collaboration with other firms
– Mutual Respect and Trust Building in business interactions
– Explicit and implicit communications (body language ?)

• Interactions between people within a Firm

– Power Relationships
– Norms of participation and decision-making
– Motivation (Individual vs. Group Behaviour)
– Performance Evaluation
– Compensation
 Importance of Culture in Management
• Technical systems and Social Systems in Management

• Technical systems
– Mechanical / Mathematical variables
– Financial Models, Systems of Process Control, Manufacturing
Systems

• Social Systems
– Leadership
– HRM
– Negotiations