The consideration of cultural differences in the design of information systems

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Abstract

This study empirically examined cultural differences in the amount of information provided by management accounting information systems (MAIS). To demonstrate these differences, data were collected from samples of Australian and Korean firms. The results of this study showed that much more flexibility performance information is provided by Korean firms, while Australian firms provided more quality performance and traditional cost control information (TCCI). We also investigated whether the interaction effects of advanced manufacturing technology (AMT) and information on the improvement of production performance were culturally different. According to the results, we suggest that with a high level of AMT, Korean firms require more types of information (i.e. quality performance information, flexibility performance information, financial performance information, advanced cost control information, and TCCI), while Australian firms generally demand flexibility performance, quality performance, and advanced cost control information.

Introduction

Considerable information system (IS) design research has been conducted by Western researchers based on observations in Western organizations. However, the results of IS design research in Western society do not necessarily apply to other cultures. Since the general values, norms, and beliefs of managers in one country can be different from those in other countries and those values and norms affect the types of information demanded, managers’ information requirements may be expected to be culturally influenced and determined [42], [51]. Therefore, different cultures require different kinds of information, process differently, and ultimately demand different design configurations of their ISs.

Although prior studies [13], [15], [26], [49], [50] have examined the cultural impact on the design and implementation of IS, most have not empirically investigated cultural effects on information characteristics (content, amount and format), that are also key design elements of IS. In this study, we empirically examined cultural differences in information characteristics of management accounting information systems (MAIS). To identify these differences, data were collected from samples of the Australian and Korean firms since the Australian culture seems to be very different from that of Korea [23].

This study also considered the levels of advanced manufacturing technology (AMT) adopted by manufacturing firms; this has a significant impact on information requirements of managers. Accordingly, we empirically analyzed whether there exist cultural differences in the interaction effects of AMT and information on production performance. Through these analyses, the types of information that are both culturally appropriate and well matched to AMT can be identified. To control the industrial and environmental effects on information characteristics of MAIS, sample firms were selected from the same industry (the automotive industry) and the same function (production) was considered.

Section snippets

National culture

Culture is the collective programming of the mind that distinguishes the members of one group or category of people from another. Hofstede identified five work-related cultural dimensions along which countries differ. His five dimensions are: individualism, power distance, uncertainty avoidance, masculinity, and Confucian dynamism. Individualism (collectivism) relates to people’s self-concept: “I” or “we”. Power distance is the extent to which the less powerful members of organizations within a

Impact of national culture on the amount of information

National culture as shared norms and values of people naturally influences managers’ preferences for specific information characteristics. Culturally appropriate information characteristics may be more preferred and even required. Hence, Hypotheses 1 and 2 were proposed as:

Hypothesis 1

Overall, a greater amount of non-financial performance information and ACCI is provided in Korean firms than in Australian firms.

Hypothesis 2

Overall, a greater amount of financial performance information and TCCI is provided in

Questionnaire development and data collection

All our questionnaire items had been developed in previous research [3], [47]. Thus, the instrument was first written in English and then translated into Korean by a translator familiar with both the language and research area. The Korean questionnaire was then translated back into English by another bilingual translator. Comparison of the original English version and the back translation revealed no significant differences.

Data were collected by this survey questionnaire administered to chief

Reliability and validity test

The questionnaire items measuring research variables had been used in previous empirical studies. However, the construct validities of these items were questionable. Principal component analysis with varimax rotation was used to determine if all items measuring a construct cluster together or not. That is, whether all items measuring a construct loaded onto a single factor or divided into multiple factors. Four separate joint factor analyses for AMT, non-financial performance information,

Conclusion

It has been argued that national culture has an impact on the design of an IS. This study empirically investigated a cultural impact on information characteristics of MAIS. The results of our research are presented in Table 9.

Our results showed that much more flexibility performance information is provided in Korean firms, while in Australian firms the greater amount of quality performance information and TCCI is produced. Much more quality performance information in Australian firms seems to

Jong-min Choe is a professor in the Accounting Department at the Kyungpook National University in South Korea. He has received his Masters degree and PhD in management science and accounting information systems from the Korean Advanced Institute of Science and Technology (KAIST). His current research interests include the design of accounting information systems (AIS), EDP auditing, the effect of national culture on the design of AIS and strategic applications of information systems, etc. He

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    Jong-min Choe is a professor in the Accounting Department at the Kyungpook National University in South Korea. He has received his Masters degree and PhD in management science and accounting information systems from the Korean Advanced Institute of Science and Technology (KAIST). His current research interests include the design of accounting information systems (AIS), EDP auditing, the effect of national culture on the design of AIS and strategic applications of information systems, etc. He has published his paper in the leading journals of Korea: Information Processing and Management, Journal of Management Information Systems, Information and Management, European Journal of Information Systems and International Journal of Management Science, etc.

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