Validation of a model to support the decision to transfer management control systems

Managers in both Japan and the United States have actively pursued the issue of transferring management techniques such as kanban and quality circles from one culture to another. However, the issue of the transferability of the management control systems (MCS) which are assumed by these techniques is often neglected or dismissed as easily accomplished. This study used data gathered from more than 1000 managers and workers in large manufacturing/construction companies in Japan and the United States to develop a mathematical model using two-group discriminant analysis which can be used to support the decision to transfer a MCS between the two cultures. The present analysis suggests that a MCS should be transferred only after relevant cultural values in both the importing organization and the exporting organization are carefully recognized and evaluated for a high degree of congruence. Judicious use of the model by managers pondering the prospect of MCS transfer will help to determine the degree to which their own organization exhibits such congruence. This paper details the methodology used to develop the model. It focuses on the steps taken to ensure both the technical and organizational validity of the model in light of the importance of cultural congruence.