The localisation of a global management control system
a b s t r a c t
This study examines how the management control system designed at the head office of an
increasingly globalised hotel chain was enacted within one of its sub-units; a joint venture
operating in the hospitality industry in Portugal. We found that the practices which comprised
the global management control system were reproduced within this joint venture.
Yet, at the same time, its managers made the global system ‘work’ for them, thereby producing
variety. Albeit our findings are in line with Barrett, Cooper, and Jamal’s (2005)
study, which was inspired by Giddens (1990, 1991), we interpret them somewhat differently
as we draw on the work of Robertson (1992, 1995). We view localisation as a process
through which heterogeneous practices can emerge to facilitate the homogenising tendencies
of globalisation by complementing, rather than undermining or opposing, it. As a
result, the local can differentiate itself from the global. Also, by linking our findings to
the notion of situated functionality in Ahrens and Chapman (2007), we argue that this heterogeneity
can be produced when organisational members, whatever their level in the
organisation, seek to achieve both the corporate and their own specific objectives.
7. Conclusions
This paper has illustrated the process of localisation
through a case study of the enactment within a joint
venture (Hotelco) of the global management control system
imposed by the head office of the world-wide hotel
chain which was one of its parents (Partner M). Robertson’s
perspective on globalisation and localisation (1992,
1995) enabled us not only to focus on the key issues in
our case study, but also to interpret them in order to enhance
our understanding of the interconnection of
homogenisation and heterogenisation in global–local
relationships. We observed a process of globalisation
leading to the standardisation of a global management
control system and the subsequent homogenisation of
management control practices as it was reproduced locally.
However, as in Barrett et al. (2005), we found that
the locals (Hotelco’s managers) did not simply reproduce
the global management control system, instead they
‘made it work for them’, and in so doing they reshaped
it. As a result, distinctive (heterogeneous) practices
emerged within Hotelco and they were enacted alongside
the global management control system which Partner
M’s head-office stretched across its international
operations. This suggests that the localisation of global
systems can result in, and to some extent relies on, heterogeneous
local practices which facilitate the enactment
of global systems. In other words, the homogenising tendencies
of global systems have to be made to work in
the local. While recognising that globalisation is a powerful
force, we argue that localisation is just as powerful
and, furthermore, it is essential for globalisation. The
variety, which is created by localisation (as the global
is put into practice in the local), enables globalisation
to take place. Moreover, the local retains its identity as
it can always differentiate itself from the global – i.e.,
particularise itself. This is why Robertson (1992, p. 102)
argues that in our modern life ‘‘there is virtually no limit
to particularity, to uniqueness, to difference, and to otherness’’.
As such, variety (or heterogeneity) is itself an
outcome of the process of homogenisation. Furthermore,
homogenisation does not restrict heterogenisation; instead
to be effective homogenisation depends to a great
extent on heterogenisation.
But the heterogeneity we observed in the management
control practices enacted at Hotelco was inspired largely
by the global management control system. Therefore, our
study illustrates that heterogenisation does not exist without
homogenisation and, as Robertson (1992, 1995) argues,
the processes of homogenisation construct the local. When
exposed to the homogenising pressures of globalisation,
locals learn from what it brings with it and, where necessary,
they reshape/adapt it to the specificities of their context. In
so doing they construct the local as unique and differentiated
from the global. This reflects Robertson’s argument that
localisation is part of globalisation in the sense that the local
is in essence included within the global, thereby being a ‘micro’
manifestation of it. It also explains why he uses the term
glocalisation to refer to ‘‘the simultaneity and the interpenetration
of what are conventionally called the global and the
local or – in more abstract vein – the universal and the particular’’
(Robertson, 1995, p. 30).
Although our findings are similar to those of Barrett
et al. (2005), we interpret them somewhat differently.
Barrett et al. (2005) concluded that in their case the
localisation of a global audit system was an example of
‘fragmentation’, as well as convergence. For them, the fragmentation
was provoked by local practices and local
knowledge, which they saw as undermining the global
expert system when it was reembedded.15 They came to
this conclusion as they drew on Giddens (1990, 1991) who
argued that expert systems are either supported or undermined
by the reembedded (local) contexts of action. As we
draw on Robertson (1992, 1995) we would argue that
Barrett et al. (2005) and our case both illustrate that global
systems may be, and very often are, supported by the distinctive
practices which emerge in those reembedded contexts
of action. The variety that emerges locally
complements rather than necessarily undermines, or works
against, the global. Put simply, variety is necessary for the
reembedding of global (expert) systems – this is what we
see as localisation.
Our study also provides insights into why heterogeneous
practices (in our case management control practices)
emerge out of the homogenising tendencies of
global (management control) systems. If we move beyond
Robertson’s (1992, 1995) perspective on the interconnection
of globalisation and localisation and draw on some of
the ideas of Ahrens and Chapman (2007), we can argue
that the managers of Hotelco introduced variety in their
management control practices as they sought not only
to pursue the objectives of Partner M and Partner P, but
also to increase the revenues and to control the costs of
their hotels. In so doing they functionally situated their
management control practices. In extremis, we could
say that because every individual has his/her own objectives
and understandings, independent of his/her level in
the organisation, he or she always acts as a local, vis-à-vis
some (higher) global level. In other words, he or she has
to enact the systems of the higher level, but in so doing
can reshape or adapt them. This suggests that we can
treat localisation (of a global system) as a broader phenomenon
in which there can be multiple locals and
potentially multiple globals with diverse understandings
and managerial objectives.
In Hotelco the managers mobilised the ‘global’ management
control systems of both the multinational and
the local parent as resources for action in order to
achieve managerial objectives. In so doing they reconstituted
those systems and this could also happen at lower
levels in Hotelco; e.g., in the relations between the head
office of Hotelco and the managers of the individual hotels
(as in the restaurant chain studied by Ahrens and
Chapman (2007)) or even within each hotel. As such,
the global–local relationship applies not only in an multinational
(seen as global) and national (seen as local)
context, but also in other contexts where there is a higher
managerial level (the global) which has responsibility
for coordinating and controlling the actions of various
sub-units at a lower level (the locals). In such contexts
there are likely to be diverse understandings, rules, interests
and objectives at the different levels in the
organisation.
Finally, our conclusions have implications regarding
claims which have been made about the standardisation
of accounting practices. First, as mentioned earlier,
Baxter and Chua (2003) called for an analysis of whether
locals are capable of resisting or mediating the homogenising
pressures which result from the ‘travelling’ of
accounting systems across interconnected times and
spaces in our contemporary world. We did not see locals
resisting these homogenising pressures, but nevertheless
we saw variation and distinctiveness (heterogenisation)
in the local management control practices. This implies
that accounting practices can vary in each context where
they are practised; as such they are a situated and skilful
accomplishment of local actors – as argued by Ahrens
and Chapman (2007), Chua (2007) and Ahrens (2009).
Consequently, the particularities and differences in
management control practices are not necessarily
diminishing as, for instance Granlund and Lukka (1998),
suggest. Second, heterogenisation of management control
practices is an essential part of the process of homogenisation
that is brought about by the stretching of ‘extralocal’
or global management control systems. This heterogeneity
in accounting is produced as locals are increasingly
exposed to the homogeneity produced by corporate
(global) management control systems. Third, it is simplistic
to assume that the managers of joint ventures
merely enact the practices contained in the management
control systems imposed by their parents. This enactment
is likely to be accomplished through the reshaping
and adaptation of those practices in order to pursue the
interests and objectives of the joint venture managers, as
well as to support the actions and to achieve the intentions
of the parents.
In this paper, we have studied the process of
localisation and focused primarily on the local practices.
A possible area for future research is whether and how
the particularities of the management control practices
which emerge