Management control systems, culture, and upper echelons – a systematic literature review on their interactions

Abstract

This systematic literature review of 99 empirical studies, between 1926 and 2016, synthesizes evidence on the interaction of management control systems (MCS) with both national culture and corporate culture. We cast our net widely by considering MCS as a package in relation to macro (national), meso (organizational) and micro culture (upper echelon theory). The literature reviewed suggests that evidence on the interaction of culture and MCS is highly fragmented, and only some authors find that culture matters for MCS. The main reason for these inconsistent findings is that studies investigating organizational MCS tend to focus only on one aspect of culture (macro, meso, or micro). This impairs a comprehensive understanding of the MCS-culture relationship. Our main insight is that culture affects MCS, provided that culture is considered as a multi-layered phenomenon that combines internal aspects of culture – e.g., upper echelon theory – with external aspects of culture, e.g., national culture. The contemporary literature mostly limits itself to discussing whether national culture matters for MCS. Hence, this focus is slightly misguided. Future studies should rather inquire which aspects of culture interacts with MCS across varying contexts.