Japanese culture and budgeting: a review of the literature and a limited pilot study to illustrate the research agenda

Yee, Cassandra Seow-Ling and Otsuka, Setsuo and James, Kieran and Leung, Jenny Kwai-Sim (2008) Japanese culture and budgeting: a review of the literature and a limited pilot study to illustrate the research agenda. Managerial Auditing Journal, 23 (9). pp. 873-899. ISSN 0268-6902

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Purpose - This paper discusses the impact that Japanese culture has on the budgeting process using insights gained from the literature and from a single company small-sample pilot study. It provides a research agenda which links specific aspects of Japanese culture to predictions about Japanese groups’ budgetary, performance evaluation and variance investigation practices.
Design/methodology/approach – A detailed literature review of the relevant literature in accounting, education and sociology, which considers how Japanese culture systematically differs from Western culture, and a small-sample pilot study.
Findings - 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.
Originality/value – Literature review provides a synthesis of a diverse variety of sources. The literature review and pilot study findings add to the accounting literature by studying in more detail than prior studies exactly how and why Japanese culture characteristics will and should affect budgetary practice. The paper should be of special value and interest to higher-degree and early-career researchers.

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Item Type: Article (Commonwealth Reporting Category C)
Refereed: Yes
Item Status: Live Archive
Additional Information: Author's version deposited in accordance with the copyright policy of the publisher.
Faculty / Department / School: Historic - Faculty of Business - School of Accounting, Economics and Finance
Date Deposited: 29 Mar 2009 09:12
Last Modified: 24 Jul 2014 21:16
Uncontrolled Keywords: Japanese budgetary practices; Japanese culture; research agenda budgeting
Fields of Research : 20 Language, Communication and Culture > 2002 Cultural Studies > 200202 Asian Cultural Studies
15 Commerce, Management, Tourism and Services > 1503 Business and Management > 150311 Organisational Behaviour
15 Commerce, Management, Tourism and Services > 1501 Accounting, Auditing and Accountability > 150105 Management Accounting
Socio-Economic Objective: B Economic Development > 91 Economic Framework > 9104 Management and Productivity > 910402 Management
C Society > 95 Cultural Understanding > 9599 Other Cultural Understanding > 959999 Cultural Understanding not elsewhere classified
Identification Number or DOI: 10.1108/02686900810908436
URI: http://eprints.usq.edu.au/id/eprint/4724

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