Management Control and the Influence of Institutional Mechanisms : A Qualitative Field Study on Cross-Cultural Organizations Operating in the Vietnamese Market

One challenge when companies are going global is cultural difference and to be able tomeet expectations in a new culture is important to be responsive towards changes.Management control consists of strategy, structure and control systems and to meetchallenges and adapt to changes in the environment, it is important that these threematches each other for a good performance. Earlier research about Management controlhas focused on contingency theory and culture based ideational theory, and societalaffects have not been brought up in the same extent. The institutional theory can be usedto understand how organizations answer to changed expectations and pressure from thesociety.The purpose with this study is to increase the understanding of institutional mechanismsin the use of Management control in Cross-cultural companies in Vietnam. This by:describe the use of Management control in Cross-cultural companies in Vietnam,identify institutional mechanisms in the Management control and develop an analysismodel that illustrates the institutional mechanisms affecting the Management control inCross-cultural companies.A field study with qualitative semi-structured interviews on Cross-cultural companies inHo Chi Minh City, Vietnam has been done. The results indicates that there is aconnection between many different control mechanisms in the Management control andthat it is a complex tool that needs to be adjusted to its context. This study also showsthat the reason why Management control is used in the Cross-cultural companies is tocontrol and evaluate the employees, direct the behaviour of the employees, to observe,to be cost-effective, to perform and to motivate the employees. The results also showthat the institutional mechanisms work as an invisible hand that forms the Managementcontrol. Identifications of the regulative, normative and cognitive pillars have beenfound in the Management control. It is found in the board’s decisions, adaption to thenew environment and knowledge and earlier experiences from actors.Validerat; 20150915 (global_studentproject_submitter