The Effects of Management Controls and National Culture on Manufacturing Performance: an Experimental Investigation

Abstract

The increasing dominance of Asian manufacturing firms in the global economy has raised an important issue: whether these firms' superior manufacturing performance is caused by their management control systems, the national culture of their employees, or the interaction of these two factors. This experimental study provides a direct test of the effects of national culture and management control system on manufacturing performance. The dimension of national culture studied was individualism ( vs collectivism )because this work-related attribute has been noted as a major difference between Asian and Western cultures. In turn, the focus on cultural individualism motivated a study of two aspects of management controls: work flow interdependence and pay interdependence. The results are consistent with cultural individualism and management controls having independent, but not interactive, effects on manufacturing performance. The potential implications of these findings and suggestions for future research are discussed.