Margarida Rodrigues , Rui Jorge Rodrigues da Silva, Cidalia Oliveira, Marcio Oliveira, C. Machado-Santos, Rui Bertuzi
Purpose: Much scientific research, and consequent contributions, has been done on multinationals versus subsidiaries in recent decades, particularly with regard to the management control system, a subject that remains current and relevant in the scientific literature in the management area. Thus, the aim of this study is to analyze the different perspectives of use of the management control system in organizations, in general terms, and a posteriori its importance in multinationals versus subsidiaries, through the inclusion of some variables (mechanisms for the exercise of control, commitment, autonomy) fundamental to the efficient and effective functioning of this system.
Methodology: This is a theoretical and exploratory study between 2005 and 2014 focused on the accounting area magazines included in the ABS ranking (version 4). The selection of articles for the literature review for this topic was initially patented by the choice of four or five journals from the accounting area for the selection of scientific articles from the last five years. However, given the particularity of the chosen topic, it was necessary to extend the universe of journals to other areas of management, namely the area of international studies and business (journals according to the classification of the journals). It should be noted that in the other management areas not included, there were also articles on the subject, however, these did not cover the desired period of time.
From research carried out in the most reputable journals in the management area, the time period from 2005 to 2014 was reviewed. However, in some of the selected journals no articles on the subject published in 2014 were identified.
In summary, the following sample resulted from research on articles published by management journals: Accounting journals: Management Accounting Research, Accounting, Organization and Society, The British Accounting Review; International Business Review and Journal of International Management; Journal of Organizational Studies and Organization Science.
In addition, we have included a further article from The British Accounting Review in 2009, as well as an article from The Organization Science in 2014. The latter was the basis for defining the subject of this work. The extension of the time period is due to the fact that this theme was reviewed in the literature in the 1990s, hence the change in the initial selection criteria. It should also be noted that articles in accounting journals on the management control system focus on the general perspective, fundamentally, and not on the perspective of multinationals versus subsidiaries, which also justifies the extension of the scope of the journals.
Results: The results show that multinationals adopt several mechanisms to control their subsidiaries spread over several countries, such as expatriation, active participation among managers, training, sociability and technology transfer. However, they must focus on the commitment of local managers in the implementation of strategies with critical and aggregate value, in the flexibility vis-à-vis the internal and external environment, so that their Control System is dynamic and interactive. Another important fact is the essence of autonomy, with the aim of sharing and transferring knowledge, regardless of the differences between the organizational and local culture between the country of origin and the host country. Given the complexity of the Relationships between the multinational and the subsidiaries, it is crucial to have a network relationship, as the network construction influences performance.
Conclusions: This analysis has returned to the importance of management control systems for multinationals and their geographically dispersed subsidiaries, which require managers to be committed to the values of the parent company, to balance the autonomy of the subsidiary to avoid dynamic tensions. The empirical studies carried out only cover a specific geographical area (Japan, China, Korea, among others); Not all studies include all variables of the control system; Limited attention to the importance of social control.