The parent company, with the intention of promoting a similar philosophy within the group, tends to transfer its Management Control Systems (MCSs) to the foreign subsidiary (Schneider, 2006). Having a shared management philosophy could increase efficiency, reduce communication time and contribute to the success of corporate strategy (Roth et al., 1991). However, management theories developed in one culture cannot be easily exported to other cultures, because national culture is important for management style. This study seeks to investigate to understand the behavior of the parent companies and how the national culture is important in the design of MCSs. The approach adopted is qualitative involving two case studies of Italian companies that have a subsidiary in Morocco. The results confirm the importance of national culture in the design of MCSs and also show that culture is underestimated by the parent company. The results also show the emergence of hybrid MCSs that combine two different cultural values.

The parent companies that create foreign subsidiaries need to control them, especially when the foreign subsidiary has a strategic importance for the parent company (Johnson et al., 2001). To facilitate the control process, the parent company tends to transfer its Management Control Systems (MCSs) to the foreign subsidiary, as it is interested in promoting a similar philosophy within the group (Schneider, 2006). MCSs are defined as a process by which managers make sure that the strategies of the organization are put into practice (Anthony, 1988). MCSs provide information that is intended to be useful to managers in performing their jobs and assisting organizations in developing and maintaining viable patterns of behavior (Otley, 1999). Roth et al. (1991) argued that having a shared management philosophy could increase efficiency, reduce communication time and contribute to the success of corporate strategy. Moreover, it is well known that management theories developed in one culture cannot be easily exported to other cultures (Keplinger, 2012). The transfer of MCSs clashes with the cultural diversities of the host country (national culture), because the national culture could affect the management style (Hofstede, 1980).

The diversity in MCSs can be due to several factors such as technology, company size, sector or other contextual variables (Child, 1981). While some differences depend on contextual factor, others however cannot be explained (Child, 1981; and Lincoln and Kalleberg, 1990). The diversity in MCSs can also be due to the cultural diversities (Hofstede, 1980; Trompenaars and Turner, 1998; and Chow et al., 1999). Many scholars have tried to understand the impact of national culture on management (Hofstede, 1980; D’Iribarne, 1989 and 1991; Chow et al., 1999; Ciambotti, 2001; House, 2004; and Hofstede et al., 2010). This led to the development of an intense debate between these scholars and other scholars on the relationship between national culture and the MCSs. These authors concluded that it is important to consider the national culture to understand the management control diversity.

Management Research Journal, Management Control Systems (MCSs), Theoretical Framework, The Importance, National Culture, Design of Management Control Systems, Evidence, Morocco and Italy.