Agency theory, national culture and management Control Systems

Ekanayake, Samson 2004, Agency theory, national culture and management Control Systems, Journal of American academy of business, vol. 4, no. 1/2, pp. 49-54.

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Title Agency theory, national culture and management Control Systems
Author(s) Ekanayake, Samson
Journal name Journal of American academy of business
Volume number 4
Issue number 1/2
Start page 49
End page 54
Publisher American Academy of Business, Cambridge
Place of publication Hollywood, Fla.
Publication date 2004-03
ISSN 1540-1200
Keyword(s) studies
agency theory
cultural differences
organizational behavior
organization development
management controls
information systems
Summary Management control system of an organization is the structured facet of management, the formal vehicle by which the management process is executed. In most organizations, systems exist for planning, organizing, directing, controlling and motivating. Depending on the level of appropriateness and quality of the management control systems, the task of management is either facilitated or hindered. The end goal of a management control system is achieving organizational objectives. Because employees (agents) do not always give their best efforts for achieving organizational objectives, management control systems need to strive for aligning goals of agents (e.g., employees, subordinates) with that of principals (e.g., senior management, owners). Agency theory and its extension, principal agent model, provide insights to the problem of goal congruence and suggest remedies, at least in the Western cultural context. Whether the agency theory presumptions, predictions and prescriptions are universally applicable is an important issue in management. Their validity in different cultural contexts is largely unknown. The available literature to date indicates the possibility that agency theory may not be valid in non-western cultures. However, further empirical research is needed in non-western cultures to shed more light to this issue.
Language eng
Field of Research 150105 Management Accounting
HERDC Research category C1 Refereed article in a scholarly journal
Copyright notice ©2004, American Academy of Business, Cambridge
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Document type: Journal Article
Collection: School of Accounting, Economics and Finance
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