Management control of Swedish SMEs : Swedish small and medium-sized enterprises’ management control mechanisms in the Asian business environment

Abstract: Background: The Swedish economy is dependent on exports as it represents 45% of the country's GDP. Simultaneously, Swedish exporting market shares are decreasing on a global scale. In the Swedish government's export strategy which is primarily aimed at Swedish SMEs, the goal is to benefit from future growth expected to originate from the Asian marketplace. The Asian region is expected to represent 44% of future economic growth until 2020, compared to 19% and 23% in Europe and North America respectively. More Swedish SMEs therefore need to enter the Asian market and in order to implement their strategies and operate efficiently, well-suited management control systems must be in place. Purpose: This study’s objective is to identify implemented features of management control systems in Swedish SMEs' located on the Asian marketplace, as to facilitate sustainable future market presence. Contribution: The study identifies several management control aspects which affect a successful establishment of Swedish SMEs on the Asian marketplace, through subsidiaries or strategic partnerships, namely control tightness, communication, budgeting, incentive systems, cultural controls, and end customer controls. The extent to how and when such mechanisms are efficient are dependent on several contingent factors relating to for example national culture, type of presence, and the industry in which the SMEs operate.