Can "lagom" save you in a Confucian world? : A study of how national cultural differences affect the use of management control systems of Swedish firms in China.

University essay from Linnéuniversitetet/Institutionen för marknadsföring (MF); Linnéuniversitetet/Institutionen för ekonomistyrning och logistik (ELO)

Abstract: The purpose of this thesis is to analyze and provide a deeper understanding of how the national culture of China affects the use of formal and informal management control systems of Swedish firms, operating in China. In order to conduct this research, relevant theories concerning internationalization, culture and management control systems were gathered and analyzed in relation to each other. This resulted in a conceptual framework, which illustrates the interrelationships between the concepts. Thereafter, this was used as the ground to which the empirical findings were analyzed and compared to. The analysis chapter involves a discussion of the similarities and dissimilarities between theory and empirical data, which leads to the conclusions of this study. This is lastly followed by theoretical implications, practical implications and recommendations, limitations and suggestions for further research.   The study has been conducted with a qualitative research method, in order to obtain a deeper understanding of how national culture can affect the use of  management control systems of Swedish firms in China. Further, due to the unexplored and limited research area of this complex subject, the study followed an abductive approach.   The findings of this research indicate that the Chinese culture affects the use of formal control systems, in which they are used extensively within Swedish firms, operating  in China. However, the national culture of China does not have an effect on the informal control systems of Swedish firms. Nevertheless, the use of the informal control systems should not be undermined, as the use of these triggers for more innovation and creativity among the members of an organization. This in turn could lead to Swedish firms operating more efficiently in the Chinese market. This research can be valuable for Swedish firms that wish to internationalize to the Chinese market, as well as firms operating in China with concerns regarding the use of management control systems in relation to the culture.

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