The role of strategy and culture in the performance evaluation of international strategic business units

Management Accounting Quarterly, Wntr, 2003 by Priscilla O'Clock, Kevin Devine

Table 1: Relative Score for Selected Countries on Cultural Dimensions

                                Uncertainty    Power
Country         Individualism    Avoidance    Distance

Argentina            46             86           49
Austria              55             70           11
Brazil               38             76           69
Canada               80             48           39
Chile                38             86           63
70 many              67             65           35
Great Britain        89             35           35
Greece               35            112           60
Guatemala             6            101           95
Hong Kong            25             29           68
Italy                76             75           50
Japan                46             92           54
Malaysia             26             36          104
Mexico               30             82           81
New Zealand          79             49           22
Singapore            20              8           74
Spain                51             86           57
Sweden               71             29           31
United States        91             46           40

Range **            6-91           8-112       11-104
Mean **             43.1           65.5         56.8
Median **            38             68           60

Country         Masculinity   Confucianism

Argentina           56            NA *
Austria             79             NA
Brazil              49             65
Canada              52             23
Chile               28             NA
70 many             66             31
Great Britain       66             25
Greece              57             NA
Guatemala           37             NA
Hong Kong           57             96
Italy               70             NA
Japan               95             80
Malaysia            50             NA
Mexico              69             NA
New Zealand         58              0
Singapore           48             48
Spain               42             NA
Sweden               5             33
United States       62             29

Range **           5-95           0-96
Mean **            48.7           43.7
Median **           49              2

* NA= Information not available for this country

** The summary statistical information relates to data from all
countries in the Hofstede (1988) research, not just the selected
countries reported above.

Table 2: Performance Evaluation Measures and Control System
Characteristics Integrating Strategy and Culture

CULTURAL                 BUSINESS UNIT STRATEGY
DIMENSION
                   BUILD       HOLD          HARVEST
High
Individualism      a,h,j,l     b,d,f,h,j,l   e,f,h,j,l

Low
Individualism      a,g,i,m     b,d,f,g,i,m   e,f,g,i,m

High Power
Distance           a,g,o       b,d,f,g,o     e,f,g,o

Low Power
Distance           a,h,n       b,d,f,h,n     e,f,h,n

High Uncertainty
Avoidance          a,g,n,w,z   b,d,f,n,w,z   e,f,n,w,z

Low Uncertainty
Avoidance          a,h,o,v     b,d,f,h,o,v   e,f,h,o,v

High
Masculinity        a,k,r,y     b,d,f,k,r,y   e,f,k,r,y

Low
Masculinity        a,i,q,s     b,d,f,i,q,s   e,f,i,q,s

High
Confucianism       a,v,x,z     b,d,f,v,x,z   e,f,v,x,z

Low
Confucianism       a,p,t,u     b,d,f,p,t,u   e,f,p,t,u

CULTURAL                 PRODUCT LINE STRATEGY
DIMENSION
                   LOW COST   DIFFERENTIATE   FOCUS
High
Individualism      e,h,j,l    c,d,h,j,l       a,h,j,l

Low
Individualism      e,g,i,m    c,d,g,i,m       a,g,i,m

High Power
Distance           e,g,o      c,d,g,o         a,g,o

Low Power
Distance           e,h,n      c,d,h,n         a,h,n

High Uncertainty
Avoidance          e,n,w,z    c,d,n,w,z       a,n,w,z

Low Uncertainty
Avoidance          e,h,o,v    c,d,h,o,v       a,h,o,v

High
Masculinity        e,k,r,y    c,d,k,r,y       a,k,r,y

Low
Masculinity        e,i,q,s    c,d,i,q,s       a,i,q,s

High
Confucianism       e,v,x,z    c,d,v,x,z       a,v,x,z

Low
Confucianism       e,p,t,u    c,d,p,t,u       a,p,t,u

CULTURAL             PRODUCT LINE STRATEGY
DIMENSION
                   DEFENDER      PROSPECTOR
High
Individualism      d,e,f,h,j,l   a,c,d,h,j,l

Low
Individualism      d,e,f,g,i,m   a,c,d,g,i,m

High Power
Distance           d,e,f,g,o     a,c,d,g,o

Low Power
Distance           d,e,f,h,n     a,c,d,h,n

High Uncertainty
Avoidance          d,e,f,n,w,z   a,c,d,n,w,z

Low Uncertainty
Avoidance          d,e,f,h,o,v   a,c,d,h,o,v

High
Masculinity        d,e,f,k,r,y   a,c,d,k,r,y

Low
Masculinity        d,e,f,i,q,s   a,c,d,i,q,s

High
Confucianism       d,e,f,v,x,z   a,c,d,v,x,z

Low
Confucianism       d,e,f,p,t,u   a,c,d,p,t,u

a. focus on market share and/or sales growth
b. maintain market share
c. new products to market
d. quality and/or customer service measures
e. cost management/efficiency measures
f. return-based measures (e.g.,ROI,EVA)
g. tight budgetary controls
h. slack in budgetary controls
i. group-based rewards/evaluation
j. individual-based rewards
k. preference for evaluation relative to others
l. business-unit vs. company rewards
m. company-based vs. business-unit rewards
n. formula-based evaluation/rewards/bonuses
o. subjective evaluation/rewards/bonuses
p. pay for performance/contingent rewards
q. performance-based rewards less motivating
r. desire for incentive-based extrinsic rewards
s. intrinsic rewards likely to be valued
t. focus on short-term financial performance
u. past/present orientation
v. future orientation/long planning horizons
w. preference for immediate rewards
x. motivated by deferred compensation
y. acceptance/desire for stretch budgets
z. preference for interactive budget process