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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.

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.

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.

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.

This paper examines potential cognitive difficulties inherent in the use of performance measurement systems. We examine the potential for emphasizing financial measures as compared to nonfinancial measures in the evaluation of an organization's overall performance. The results suggest that users of performance measurement data will emphasize historical financial measures. Two separate experiments provide additional evidence that users of performance measurement data suffer a halo bias, in that an organization's performance on financial measures appears to influence their perception of the organization's performance on nonfinancial measures.

This paper aims to examine how balanced scorecard (BSC) users change their judgement processes according to qualitative changes in the BSC. Prior experimental studies have found that decision-makers do not fully adapt their judgements according to changes in financial reports, known as functional fixation. Although previous research has examined functional fixation in several management accounting-related disciplines, the research has not been completely successful in developing a deeper understanding of the cognitive processes that are responsible for the occurrence of this judgemental bias.

To fill this gap, a combination of structural modelling and a process tracing method that monitors participants’ information acquisition to better understand the underlying cognitive processes that affect BSC users’ judgements is used.

Overall, the results indicate that functional fixation is present both from an input–output (structural modelling) and a process tracing perspective. Stable general individual differences, particularly in terms of intuitive versus deliberative preferences in decision-making, influence the probability of functionally fixated behaviour. Additionally, previous findings concerning the over-reliance on financial information in the BSC setting is replicated. Using process data, it was found that BSC users rely more on financial measures than on non-financial measures in the pre-decisional phase of exercising their judgement.

This paper contribute to management accounting research on the BSC by investigating two cognitive biases (functional fixation and overreliance on financial measures) from an input–output and a process tracing perspective.

The purpose of this paper is to present an analysis of the size of the banking sectors in central and Eastern European (CEE) countries. The banking sectors' ability is focused to provide financial intermediation between savers and investors in the economy.

The existing literature on banking in transition economies argues in unison that banking sectors in CEE countries are too small and do not provide sufficient levels of financial intermediation. In this paper, a common drawback of the existing measures used to indicate the size of CEE banking sectors is detected: they all relate the volume of bank intermediation to gross domestic product (GDP). It is argued that since transition economies have a low stock of financial wealth relative to economic activity, a more objective measure of the size of the banking sector is the ratio of bank assets to a proxy of the stock of financial wealth rather than to GDP.

There is evidence that the estimation of the size of the banking sectors relative to GDP produce downward biased measures for the ability of CEE banks to intermediate available financial resources. When the size of the banking sector is measured relative to financial wealth, the gap between the developed European Union banking systems and those of the CEE countries is not as severe as argued in studies based on the traditional approach of measuring the size of the banking system with respect to GDP.

Using the downward biased measure of financial system development to stress the underdevelopment of the financial intermediation in CEE may produce misleading policy recommendations, e.g. recommendations in the direction of rapid financial system expansion by lowering barriers of entry for new banks. The authors' new measure presents an alternative that should be considered by policy makers in the design of measures promoting financial system development.

The paper challenges the existing consensus on severe underdevelopment of the CEE banking sectors. It presents a new approach of accessing financial system development in emerging economies.

This experimental study examined whether sustainability performance measures matter in managerial appraisal and bonus decisions. Participants received financial and non-financial information about four branch managers of a commercial bank, with different combinations of sustainability and financial performance. Participants perceived sustainability measures as being less important than financial ones; still, the experiment revealed that sustainability performance had some impact on appraisal and bonus decisions (albeit it mattered less than financial performance). Evaluators seemed to penalize inferior sustainability performance less than they penalized inferior financial performance. They also seemed to reward sustainability success less than financial success. These findings have practical implications for the implementation of sustainability measures in managerial evaluation systems. The experimental results indicated that incorporating these measures in evaluations does not necessarily mean they will have a sizable effect in decision-making. Results from a companion experiment suggested that organizations using a sustainability balanced scorecard for appraisal and bonus purposes might benefit from an increased emphasis on communication and evaluator training, with a focus on how sustainability performance impacts the attainment of strategic objectives.

In the growing debate about designing new management control systems (MCS) to include stakeholder values, there has been little discussion about information overload. Stakeholder advocates call for including more environmental and related social disclosures but do not consider how information overload might impair the use and interpretation of corporate performance measures. As we know, shareholders and boards of directors are most concerned with market data such as earnings per share, dividend rates, and market value growth. In this chapter, we assert that management control system designers must consider information overload before expanding the MCS to include social and nonfinancial disclosures.

The paradox in expanding MCS is that demand for sustainability performance measures will likely result in overload for both information preparers and information users. Corporate Social Responsibility (CSR) and similar sustainability disclosures are likely to overload MCS and overwhelm the readers and users by performance reports that include multiple dimensions.

CSR affects the design of companies' annual reports because stakeholders are increasingly concerned with how organizations address their social responsibilities and how they disclose their societal responses. Management accountants are accustomed to providing performance measures within an organization and MCS usually have an internal focus. CFOs are often not accustomed to balancing the needs of stakeholders with those of managers and owners. We suggest that companies and CFOs will face an information overload dilemma in making these determinations, and that users will be overloaded in sifting through the multiple dimensions of information that are increasingly being provided. We suggest that the bias toward financial performance measures will distort both the provision of relevant information and the use of sustainability performance measures. We modified the Epstein and Roy sustainability model (2001) to illustrate some of these potential impacts.

We note that the balanced scorecard (BSC) was developed as one such tool to reflect and communicate multiple measures. We summarize a previous study showing how managers ignored multiple performance measures in a performance scorecard study. We then relate our results to some of the information overload literature to support our suggestion that stakeholders will face many of the same information overload issues and constraints when using and processing social disclosures.

Our summary of the information overload literature results in a call for more interdisciplinary information overload research involving real-world contexts and tasks. We note that most of the extant information overload literature is restricted to discipline-based silo-oriented studies and to simplistic evaluations, brand identification, or forecasting tasks. Our study went into some depth to describe the business, its strategies and objectives, and a comparison of actual results to specific goals. As management control systems evolve or are designed to report sustainability data, the issues surrounding increasing complexity and information overload will become exponentially problematic. We suggest that future research also include consideration of information overload conditions facing preparers and disclosers of sustainability measures.

This paper aims to empirically compare the degree to which two technological interventions, based on the computer-supported collaborative learning (CSCL) and the technology acceptance model (TAM), were associated with a different incidence of financial biases.

The study adopted a quasi-experimental research design. The authors randomly assigned the participants (N = 507) to one of two training conditions or a control group, and in turn, we assessed the incidence of financial biases after the training interventions.

Participants who took part in the TAM-based group reported lower financial biases than those in the CSCL-based training group and the control group.

Literature suggests that two educational approaches, i.e. the CSCL and the TAM, can implement individuals’ financial decision-making. These educational approaches involve technology to support individuals in reducing the incidence of cognitive biases. This study contributes by advancing empirical evidence on technological supports for interventions to improve financial decision-making.

Suboptimal decision-making may lead to adverse consequences both at the individual and social levels. This paper contributes to the literature on debiasing interventions by offering initial evidence on technological-based interventions in the domain of financial decision-making. The authors discuss the application of this evidence in lifelong training.

This study provides evidence on how different technological interventions are associate with a lower incidence of financial biases.

This research seeks to explore the human interpretation of performance management information using Kaplan and Norton's Balanced Scorecard (BSC) as a research vehicle.

The paper uses the controlled environment of an experiment to explicitly investigate whether experienced managers weight all performance measures in a BSC equally when making comparative decisions.

Experimental results suggest that managers do not rate the importance of individual performance measures equally, and at the outset of the decision process often rely on simplifying strategies to help process the information in the time available. Further analysis indicates that the decision approaches used were in themselves biased, and that decision outcomes were not always related to the factors which managers thought were important at the beginning of the process.

The research found that managers do not consider the measures in a scorecard equally, but will apply their own weighting if none is provided. Furthermore, managers are unlikely to use all of the performance measures available to them. These findings have significant implications for those designing scorecards whilst contributing to the academic debate on weighting of measures and cognitive bias in decision making.

The authors aim to examine the relationship between home bias and globalization while specifically examining the effects of the different dimensions of globalization (social, economic and political) for both developed countries and developing countries. Additionally, the authors test the effect of globalization regulation and laws against actual globalization activities.

This study investigates the influence of globalization on the home bias phenomenon using a panel regression and a three-dimensional globalization index (social, economic and political globalization) of 42 developed and developing countries from 2001 to 2016.

The results show that globalization significantly reduces home bias. In addition, the authors find that social globalization has a key influence compared to economic globalization and that political globalization has the weakest effect. For developing economies only, economic globalization as well as globalization laws and regulations have a crucial impact on the level of home bias.

Prior studies focus merely on the aspect of financial integration. Our study provides a more comprehensive outlook by distinguishing between the features of globalization (social, economic and political) as well as the actual globalization activities (de facto) compared to the laws and regulations enabling those actives (de jure). Lauterbach and Reisman (2004) show that globalization reduces home bias through a theoretical model. This study provides empirical merit to their work. In addition, we examine the different aspects of globalization for both emerging and developed markets.

This paper presents the results of a survey of the use of the balanced scorecard in New Zealand companies. The top 40 companies on the New Zealand Stock Exchange (NZSE40) were chosen as the survey population. A 62.5% response rate was achieved. One hundred percent of respondents indicated that they have knowledge of the balanced scorecard. Sixty‐one percent and 65% of the respondents reported that they use a balanced scorecard at organisational and divisional level, respectively. The results indicate that financial performance measures continue to dominate non‐financial measures in terms of importance. In addition to further developing the literature on the balanced scorecard, the research provides opportunities to investigate balanced scorecard implementations in New Zealand in more depth.