Headquarter reliance on accounting performance measures in a multinational context
1991 (English)In: Journal of International Financial Management & Accounting, ISSN 0954-1314, E-ISSN 1467-646X, Vol. 3, no 1, 17-38 p.Article in journal (Refereed) Published
Headquarter (HQ) reliance on accounting performance measures (APMs) is studied in a European multinational organization. European MNCs typically manage their foreign operations as a portfolio of relatively independent national businesses (Bartlett and Goshal, 1989). In line with previous work on APMs in a limited country setting (Govindarajan, 1984; Brownell, 1987), the HQ relies less on APMs in monitoring domestic units that face environmental instability. However, in the case of geographically dispersed foreign subsidiaries, the HQ emphasizes APMs more when dynamism increases. The financial control pattern towards foreign subsidiaries is similar to Egelhof s (1988) findings in a broad sample of MNCs. This contrasting result is consistent with the greater cost and difficulty of using information-intensive alternatives to APMs for units that are geographically and culturally distant from the HQ. There is no indication that tight APM-based management would have a negative impact on work conditions of managers facing instability, but foreign managers find it more difficult to accept the evaluative framework if high reliance is placed on APMs when their environment is dynamic.
Place, publisher, year, edition, pages
Blackwell Publishing, 1991. Vol. 3, no 1, 17-38 p.
Research subject Business Studies
IdentifiersURN: urn:nbn:se:umu:diva-50254DOI: 10.1111/j.1467-646X.1991.tb00089.xOAI: oai:DiVA.org:umu-50254DiVA: diva2:460980