Introduction

This introduction presents an overview of the key concepts discussed in the subsequent chapters of this book. The book explains the features of management control systems (MCSs) in Japanese companies by comparing them with MCSs that have developed mainly in the United States (US). The basis of Japanese MCSs lies in providing empowerment to front-line employees. The book shows the present state of Japanese employees, explain what brings about such a state, and attempt to illustrate the Japanese way of thinking. It then describes the current status of cost accounting and budgeting systems in Japan. The book also shows the difference of production circumstances between Japan and the US and explains the allocation system of overhead costs in Japanese companies based on survey results. It also explains decentralization in Japanese companies comparing with US companies. The book presents the case of Kao, known as a Japanese company that adopted EVA early, and introduces management of marketing expenses in Kao.