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Strategy Evaluation When Using a Strategic Performance Measurement System: An Examination of Motivational and Cognitive Biases

Advances in Accounting Behavioral Research

ISBN: 978-1-78756-544-9, eISBN: 978-1-78756-543-2

Publication date: 21 November 2018


The multiple performance measures in strategic performance measurement systems should be selected to represent a set of causally linked strategic drivers and outcomes. The pattern of results thus can provide information concerning the proper execution of the strategy (i.e., the performance evaluation role) and the strength of the cause-and-effect linkages assumed by the strategy (i.e., the strategy evaluation role). Unfortunately, managers’ tendency to re-evaluate the strategy when performance falls short of target is low in practice. Possible explanations include motivational and cognitive biases. We experimentally examine two decision aids, an attribution aid, and a decomposition aid, designed to help managers ease these challenges. Study 1 shows the decision aids, individually and in combination, increase managers’ tendency to re-examine a problematic strategy. Study 2 demonstrates the effectiveness of the two decision aids, when used together, under a different pattern of results and among a sample of more experienced managers.




The authors thank M. Lipe and S. Salterio for sharing their research instrument. We have received helpful comments from Anne Farrell, Tim Miller, Kim Sawers, Bill Tayler, Alan Webb, reviewers, and participants of the 2012 AAA management accounting mid-year meeting and 2015 EAA annual congress, and workshop participants at Chinese University of Hong Kong, Sun Yat-sen University, and Jinan University.

Bernard Wong-On-Wing and Dan Yang acknowledge the financial support of the Ministry of Education of China through the 111 Project at SWUFE (Project Number B18043: Innovation and Talents Base of Financial Security and Development), as well as the financial support of the National Natural Science Foundation of China (Project Number 71620107005: Research on Capital Market Trading System and Stability).


Guo, L., Libby, T., Wong-On-Wing, B. and Yang, D. (2018), "Strategy Evaluation When Using a Strategic Performance Measurement System: An Examination of Motivational and Cognitive Biases", Advances in Accounting Behavioral Research (Advances in Accounting Behavioural Research, Vol. 21), Emerald Publishing Limited, Leeds, pp. 97-126.



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