Abstract
This paper is based on an introductory speech made by the author for the symposium entitled “Strategic Management Control in Divisionalized Organizations,” at the 1996 JAMA Forum. Its main purpose of the paper is to point out the basic characteristics of divisionalized management control in Japanese companies, especially when an investment center system is adopted.
In the sixties, after World War II, the “divisionalized management system” was introduced to major Japanese companies as a“new” management system. Most of them are said to have been encouraged by the MITI report, “Profit Management through Divisionalized Management Systems.”
The essential points of the MITI report were modeled after the theories of American scholars, which were based on the practices of US businesses; let us call it “US style” for convenience.
However, our case study and field research suggest that most of the Japanese enterprises which adopted the “new” concept and practices into their management systems have added various changes to their actual management processes in order to fit the system to their own business environments and to their own organizational behavior. The case and field research show that actual practices in divisionalized management control in Japanese companies have several characteristic differences in essential areas from US-style theories and practices; we call it “Japanese style”.
This paper supplies the case material which will help discern the characteristics of the Japanese-style management control system, compared with, the US-style system. The case examples are selected to point out two aspects of the major differences between the two styles: one concerning the organizational structure of the management control systems, and the other concerning the responsibility accounting systems.
