The role of accounting and an intermediate subsidiary in the management control system

Moilanen, Sinikka

doi:10.1016/j.mar.2008.06.002

Cited by 24 publications

(42 citation statements)

References 42 publications

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“…(Busco et al 2008;Dossi and Patelli 2008;Mahlendorf et al 2012). Financial figures are widely used to measure performance (e.g., Abdallah and Alnamri 2015;Coates et al 1995;Kihn 2008) due to their high acceptance and comparability across countries (Dossi and Patelli 2010;Kraus and Lind 2010;Moilanen 2008). These controls are scarcely adapted to country-specific conditions that subsidiaries are subjected to (Borkowski 1999;Kihn 2008 (Chung et al 2006;Dossi and Patelli 2010).…”

Section: Article Characteristicsmentioning

confidence: 99%

“…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.…”

Section: Article Characteristicsmentioning

confidence: 99%

“…Budgeting and budgeting controls are highly relevant for controlling foreign subsidiaries (Hassel and Cunningham 1996;Moilanen 2008;Van der Stede 2003) and often represent the basis for PMS (Busco et al 2008;Frow et al 2005;Moilanen 2008) and incentives (Van der Stede 2003). Budgeting processes draw on communication and information flows between headquarters and subsidiaries.…”

Section: Article Characteristicsmentioning

confidence: 99%

“…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). Strategic decisions and capital expenditures are prone to be centralized (e.g., Al-Husan and James 2003; Finnegan and Ni Longaigh 2002;Moilanen 2008). Particularly, global transfer pricing policies-in some cases triggered by tax compliance requirements-appear to reduce the autonomy of subsidiaries (Cools et al 2008;Cools and Slagmulder 2009;Plesner Rossing 2013).…”

Section: Process Controlmentioning

confidence: 99%

“…Most MNCs rely on written manuals, standardized procedures, and job descriptions, to control employee behavior in foreign subsidiaries (Al-Husan and James 2003; Jaussaud and Schaaper 2006;Moilanen 2008) for coordination and efficiency purposes and to ensure adherence to reporting requirements (Moilanen 2008;Schaaper et al 2011). However, the efficiency of process control seems limited when it hinders flexibility (Cools and Slagmulder 2009;Plesner Rossing 2013;Richards and Hu 2003).…”

Section: Process Controlmentioning

confidence: 99%

See 4 more Smart Citations

Management control in multinational companies: a systematic literature review

Sageder

Feldbauer‐Durstmüller

2018

Rev Manag Sci

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Executing management control across borders is crucial for multinational companies (MNCs). Various management control mechanisms serve to align foreign subsidiaries with corporate goals. Management control at MNCs has been subject of numerous studies in the past 25 years, thus highlighting the relevance of the topic. To provide a comprehensive overview of the research field, a systematic literature review including 79 articles from scientific journals has been conducted that outlines various control mechanisms and presents underlying theories as well as development over time. The design of management control and management accounting depends on internal factors at headquarters and the subsidiary as well as on external factors like culture or market requirements. The relationship of headquarters with subsidiaries and the integration into the host country context represent another influence on management control. This paper categorizes influencing factors, discusses interactions and limitations of control mechanisms and suggests implications for practice and research along with avenues for future research.

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Section: Article Characteristicsmentioning

confidence: 99%

Section: Article Characteristicsmentioning

confidence: 99%

Section: Article Characteristicsmentioning

confidence: 99%

Section: Process Controlmentioning

confidence: 99%

Section: Process Controlmentioning

confidence: 99%

See 3 more Smart Citations

Management control in multinational companies: a systematic literature review

Sageder

Feldbauer‐Durstmüller

2018

Rev Manag Sci

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Non‐bank financing of small and medium size firms in developing economies: Effect of management control systems including large firm affiliation

Nketia

Asare

Ampofo

2023

J Corp Accounting Finance

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This study investigates the relationship between Management Control Systems (MCS) of Small to Medium Size Enterprise (SME) and how that can sway financing of working capital (short‐term) and long‐term assets by non‐bank sponsors/investors. Based on the World Bank enterprise survey, we examined elements within the data that we classified as key components of management control mechanisms that can affect the effective running of SMEs to attract non‐bank financing. We developed six hypotheses to test the vigor of the association of financial report systems and/or subsidiaries status of SMEs and the financing of working capital and/or long‐term assets by non‐banks. The results of our tests illustrate that generally firms with sound financial systems and/or that are subsidiaries of a parent company entice non‐banks sponsors to finance the working capital and long‐ term assets of SMEs. This study contributes to the financing literature by examining MCS employed by non‐banks to extend financing to SMEs.

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