THE USE OF ORGANIZATIONAL CONTROLS AND THEIR EFFECTS ON DATA MANIPULATION AND MANAGEMENT MYOPIA - A JAPAN VS US COMPARISON

Two prior papers by Merchant (1985b, 1990) have explored the use and e ffects of five management controls at the profit center level of a lar ge U.S. firm. This study extends the investigation to a crosscultural context. Data were collected from first-line profit center managers at Toshiba - a Japanese manufacturer matched in size and industry to Mer chant's (anonymous) U.S. firm. These data were combined with those of Merchant to test four predictions derived from Hofstede's (1980) taxon omy of national culture. The findings supported the predictions that r elative to their U.S. counterparts, the Japanese profit center manager s were subject to tighter procedural controls and controls via directi ves given at meetings. Further, when faced with the same level of cont rol tightness, they did not engage inas high a level of dysfunctional activities. However, contrary to prediction, the Japanese managers wer e subject to significantly tighter controls overall than were the U.S. managers. Copyright (C) 1996 Elsevier Science Ltd.