An exploration of a possible interaction between culture and management control systems- the case Scandinavia and China

Abstract: As many companies today enter foreign markets in order to stay competitive, they face a challenge in if and how to adapt their management control system to the prevailing culture. Since Scandinavia is small market in economic terms, Scandinavian companies are attracted by great potential of the Chinese market. The purpose of this dissertation is to explore a possible interaction between culture and management control system practised – the case Scandinavia and China. The results are mainly based on a qualitative case study of six interviews with employees of Stora Enso. Three interviews were conducted at Kvarnsveden Mill in Sweden and three over the phone with employees from Dawang Mill in China. The main finding in the study is the detailed description of the interaction between culture and management control system. Due to cultural variables, the Chinese organisation emphasise personnel control while the Scandinavian organisation uses more action control. This case study provides information about the interaction between management control system and culture within one company. We believe it can be of interest for Scandinavian companies to consider our exploration when establishing on the Chinese market.