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Geographical or culture-based analysis
Two large groups are emerging
: the America-Europe group (with a strong Anglosphere flavor) and the rest of the
world (Asia, Africa, and Oceania in some cases). We need to be very careful in our analysis as in Europe, for instance,
subtle differences may appear between Northern and Southern, or Western and Eastern countries. Evidence shows,
however, that there are very real differences depending upon the companies
’ ŶatioŶalitLJ aŶd/oƌ the gƌoup
they
belong to.
Both in Europe and in America, project management control is one of the main activities of the finance-control
function. In Asia, it is more about reporting, and in Africa, it is cash forecasting. Furthermore, whereas Western
management controllers (Europe, America) believe they will focus in the future on internal control, risk management,
or relationships with operational staff, Asians are giving priority to reporting, and Africans continue to adopt a more
standard approach (priority to planning and budgeting). It is in Africa, in Oceania, and in Asia that we proportionally
find the greatest number of companies whose strategic/budget process lead-time is long (from 4 to 6 months).
Conversely, it is in America and Europe that we find the greatest number of companies with no planning or budgeting
(America). Whereas the frequency and time devoted to reforecasting are quarterly or biannual (from 61% to 64%),
those activities are monthly or quarterly in the rest of the world (monthly in Africa and quarterly in Asia).
As far as tools are concerned, we observe similar practices between Americans and Europeans for planning,
budgeting, reforecasting, and consolidation (spreadsheet, budget tool, and ERP). In contrast, Asians appear to be
ahead of the other cultures regarding the use of multidimensional tools (reporting and consolidation). Furthermore,
within each group that we have identified, countries or a group of countries can be distinguished. For instance, in
terms of benchmarking, Australia and the United States rank very high in the lead time needed for reporting and in
visibility regarding the activity of peers; African countries are lagging behind in this respect. Mexico is one of the big
users of balanced scorecards. Finally, it is in Central America and in Western Europe that the involvement of
operational staff in the budgeting process seems to be the highest.
Nevertheless, our study highlights that
all the companies share a number of characteristics regarding management
control worldwide
. Regardless of the geographical origin of a company, the activities of the finance-control function
generally focus on planning, budgeting, and reporting. The interactions between management control and other
support services, like the nature of those interactions, do not appear to correlate with the geographical area; the
same can be said of the intention (or not) to change the processes, the use (or not) of rolling forecast, the most used
tools (spreadsheets in particular), the nature of the performance indicators, the frequency of publication of those
indicators, the level of decision-making concerning the choice of information systems (corporate), the functionalities
targeted for improvement, or the arguments justifying the postponement or cancellation of reforms. In other words,
a
͞Đultuƌal͟ oƌ ͞geogƌaphiĐal͟ segŵeŶtatioŶ does Ŷot
necessarily appear as a discriminant criterion for most of the
topics dealt with.
Key issues synthesis
:
Variable
"Nationality"
Differencies
Similarities
Westerne "culture"
versus
Other "culture"
- Importance attached to projects management control
- Controlling priority activities
- Time required to elaborate plan and budget
- Effective use of budget
- Frequency of forecasts updates and time dedicated to
forecasts
- Controlling main activities
- Degree and level of interactions between controlling and
other support services
- Willingness to improve processes
- Performance tools used
- Nature and frequency of publication of indicators
- Decision level for selecting information systems
- Reasons for postponement/absence of information systems
redesigning
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