How does Japanese culture affect budgeting?
Kieran Jamesa, Setsuo Otsukab and Cassandra Yeec
Working Paper 11/06
August 2006
About the Authors
Dr Kieran James, School of Commerce, Charles Sturt University, Locked Bag 588, Wagga Wagga NSW 2678, Australia.
Setsuo Otsukab, School of Education, Charles Sturt University.
Cassandra Yeec Thames Business School, Singapore.
The authors would like to thank seminar participants at Charles Sturt University, Griffith University, University of Wollongong and Macquarie University, as well as Alan Kilgore, John Sands, Nava Subramaniam, Sue Wright and especially Trevor Hopper.
Charles Sturt University – Faculty of Business Working Paper Series
Managing Editor: Associate Professor Jayne Bisman, School of Accounting, Bathurst
Editors: Dr P. Mathews, School of Commerce, Wagga Wagga
Associate Professor M. O'Mullane, School of Business, Albury
Dr R. Tierney, School of Marketing and Management, Bathurst
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Table of Contents
- Abstract
- Introduction
- Literature Overview
- Research Method
- The Budgeting Process: Walk-Through Tour
- Results of Interview
- Conclusions
- References
Abstract
In this paper we discuss the impact that Japanese culture has on the budgeting process using a single case study approach. We find that the Singaporean subsidiary of the Japanese MNC we studied uses common Japanese budgeting practices, as previously documented by Ueno and Sekaran (1992). Line managers are rewarded based on overall actual companywide profit, consistent with the Japanese collectivist group-orientation which is itself a product of Confucianism. Although variances are used to rectify operational problems on a timely basis, line managers are not rewarded for outperforming the budget - the budget is a stick, but there is no offsetting carrot. An interviewed line manager (Chinese Singaporean, Purchasing) expressed mixed feelings about the current reward system and a preference for rewards based on outperforming his own budgetary target. This observation is consistent with some research in the educational literature suggesting that Chinese tend to be less collectivist than Japanese.