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Book part
Publication date: 14 July 2006

Al Bento and Lourdes Ferreira White

Performance management involves budgeting, performance evaluation, and incentive compensation. This study describes a model that encompasses these three elements of…

Abstract

Performance management involves budgeting, performance evaluation, and incentive compensation. This study describes a model that encompasses these three elements of performance management. To illustrate the model, survey data were examined using path analysis. The empirical evidence supports the model, and suggests several intervening variables that mediate the direct and indirect effects of budgeting, performance evaluation, and incentives on gaming behaviors and individual performance.

Details

Advances in Management Accounting
Type: Book
ISBN: 978-1-84950-447-8

Book part
Publication date: 21 July 2004

Jeffrey F Shields and Lourdes Ferreira White

What is measured gets managed – especially if rewards depend on it. For this reason many companies (over 70% in this survey) have upgraded their performance measurement…

Abstract

What is measured gets managed – especially if rewards depend on it. For this reason many companies (over 70% in this survey) have upgraded their performance measurement systems so as to include a mix of financial and non-financial metrics. This study compares how companies currently measure performance for compensation purposes with how their managers think performance should be measured. We find significant measurement gaps between actual and preferred measures, and we find that larger measurement gaps are related to lower overall performance. The choice of performance measures for compensation purposes is also related to the attitudes of managers towards manipulation of reported results.

Details

Advances in Management Accounting
Type: Book
ISBN: 978-0-76231-118-7

Book part
Publication date: 3 July 2017

Kenneth A. Merchant and Lourdes Ferreira White

This paper examines the linkages between the ethics and management control literatures and suggests some potentially fruitful areas for future research and for integration…

Abstract

Purpose

This paper examines the linkages between the ethics and management control literatures and suggests some potentially fruitful areas for future research and for integration in the classroom.

Methodology/approach

We review topics in the ethics and management control literatures organizing them around the six modules used in the accounting ethics course taught at the University of Southern California: (a) professional standards, (b) distinguishing right from wrong, (c) understanding why (good) people do bad things, (d) getting employees to behave ethically (corporate ethics programs), (e) getting people to speak up when they see something wrong taking place (Giving Voice to Values), and (f) whistleblowing (the last resort).

Findings

While we find many topics where ethics and management control are concerned with similar issues, there are very few papers that approach these topics from the two perspectives.

Originality/value

We provide an overview of topics where ethics and management control overlap, and highlight the need for greater convergence between the two literatures. By linking MCS and ethics, organizations can provide a framework to promote behavior that both contributes to the achievement of the organization’s objectives and also follows ethical principles. We comment on what may happen when ethics and management control diverge, and discuss controls that can promote a strong ethical climate.

Book part
Publication date: 29 March 2016

Lasse Mertins and Lourdes Ferreira White

This study examines the impact of different Balanced Scorecard (BSC) formats (table, graph without summary measure, graph with a summary measure) on various decision…

Abstract

Purpose

This study examines the impact of different Balanced Scorecard (BSC) formats (table, graph without summary measure, graph with a summary measure) on various decision outcomes: performance ratings, perceived informativeness, and decision efficiency.

Methodology/approach

Using an original case developed by the researchers, a total of 135 individuals participated in the experiment and rated the performance of carwash managers in two different scenarios: one manager excelled financially but failed to meet targets for all other three BSC perspectives and the other manager had the opposite results.

Findings

The evaluators rated managerial performance significantly lower in the graph format compared to a table presentation of the BSC. Performance ratings were significantly higher for the scenario where the manager failed to meet only financial perspective targets but exceeded targets for all other nonfinancial BSC perspectives, contrary to the usual predictions based on the financial measure bias. The evaluators reported that informativeness of the BSC was highest in the table or graph without summary measure formats, and, surprisingly, adding a summary measure to the graph format significantly reduced perceived informativeness compared to the table format. Decision efficiency was better for the graph formats (with or without summary measure) than for the table format.

Originality/value

Ours is the first study to compare tables, graphs with and without a summary measure in the context of managerial performance evaluations and to examine their impact on ratings, informativeness, and efficiency. We developed an original case to test the boundaries of the financial measure bias.

Details

Advances in Management Accounting
Type: Book
ISBN: 978-1-78441-652-2

Keywords

Book part
Publication date: 13 August 2018

Lorenzo Patelli

Purpose – To show the properties of performance measurement and management systems (PMMS) used dialogically and the association between the dialogic use of PMMS and the

Abstract

Purpose – To show the properties of performance measurement and management systems (PMMS) used dialogically and the association between the dialogic use of PMMS and the characteristics of the organizational relationships between parent companies and foreign subsidiaries.

Design/Methodology/Approach – Data were collected through a questionnaire e-mailed to large foreign subsidiaries of multinational firms operating in various industries. Hypotheses regarding factors associated with the extent to which PMMS are used dialogically between parent companies and foreign subsidiaries were tested based on responses to 136 usable questionnaires (45% response rate).

Findings – PMMS are used more dialogically within relationships between parent companies and subsidiaries characterized by subsidiary strategic role and organizational interdependence. Measurement diversity and perceived comprehensiveness of PMMS are higher if PMMS are used more dialogically. Finally, the dialogic use of PMMS is positively associated with subsidiary size and the emphasis on collaboration in the parent company’s national culture.

Originality/Value – In contrast to prior management accounting research that is focused on the outcomes of different styles of use of PMMS, this study shows organizational characteristics and PMMS properties associated with the dialogic use of PMMS. Moreover, this study advances the traditional view of the international business literature that conceives PMMS as bureaucratic systems employed by parent companies to coercively control foreign subsidiaries.

Details

Advances in Management Accounting
Type: Book
ISBN: 978-1-78756-440-4

Keywords

Book part
Publication date: 10 February 2010

Al Bento and Lourdes Ferreira White

This exploratory study aims at identifying the main characteristics of strategic performance measurement systems (SPMS) that influence SPMS outcomes, which, in turn…

Abstract

This exploratory study aims at identifying the main characteristics of strategic performance measurement systems (SPMS) that influence SPMS outcomes, which, in turn, impact firm performance. Using data from 1,990 companies in a wide range of industries, we employed path analysis and stepwise regression to test the model. We found empirical support for the model, in that SPMS have a significant effect on human resource practices and business results. The degree of BSC adoption, the impact of SPMS on human resources, the purposes for which the SPMS were designed, and the use of nonfinancial performance measures were found to have the most effect on the impact of the SPMS on business results.

Details

Advances in Management Accounting
Type: Book
ISBN: 978-1-84950-755-4

Book part
Publication date: 1 January 2014

Lasse Mertins and Lourdes Ferreira White

This paper proposes and tests a model to explain the outcomes of three different information presentation formats. Based on cognitive fit theory, information visualization…

Abstract

Purpose

This paper proposes and tests a model to explain the outcomes of three different information presentation formats. Based on cognitive fit theory, information visualization formats that best fit task characteristics are expected to lead to improved decision-making outcomes. We apply the Judgment and Decision-Making framework (Bonner, 2008) to investigate how certain factors can impact decision quality.

Design/methodology/approach

This study tests whether certain production variance presentation formats (percentages, dollar amounts, and schematic faces), task complexity, understanding of the presentation format, motivation, and effort increase the accuracy of a supervisor’s bonus calculation. A total of 281 students and professionals participated in this experiment. Their responses were examined using regression analysis.

Findings

Our results indicate that individuals mostly prefer the percentages presentation format and that the use of the percentages presentation format, a lower level of task complexity, and a better understanding of the variance presentation format lead to more accurate calculations in the experimental task.

Research implications

Our study provides a call for further research on factors that influence the choice of presentation format as a potentially fruitful area for management accounting researchers.

Practical implications

We exhort practicing management accountants to exert direct influence on employees’ decision making through the use of variance presentation formats that fit their tasks and promote understanding.

Originality/value

Our experiment introduced two major innovations: it uses an interactive data visualization approach allowing subjects to select their preferred presentation format; and it focuses on production variances, a topic that has received less attention in the academic managerial accounting literature, but is still very relevant to practitioners.

Book part
Publication date: 3 July 2017

Abstract

Details

Advances in Management Accounting
Type: Book
ISBN: 978-1-78714-530-6

Book part
Publication date: 14 July 2006

Abstract

Details

Advances in Management Accounting
Type: Book
ISBN: 978-1-84950-447-8

Book part
Publication date: 21 July 2004

Abstract

Details

Advances in Management Accounting
Type: Book
ISBN: 978-0-76231-118-7

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