Do we measure what we get?

Performance measures shall enhance the performance of companies by directing the attention of decision makers towards the achievement of organizational goals. Therefore, goal congruence is regarded in literature as a major factor in the quality of such measures. As reality is affected by many variables, in practice one has tried to achieve a high degree of goal congruence by incorporating an increasing number of these variables into performance measures. However, a goal congruent measure does not lead automatically to superior decisions, because decision makers’ restricted cognitive abilities can counteract the intended effects. This paper addresses the interplay between goal congruence and complexity of performance measures considering cognitively-restricted decision makers. Two types of decision quality are derived which allow a differentiated view on the influence of this interplay on decision quality and learning. The simulation experiments based on this differentiation provide results which allow a critical reflection on costs and benefits of goal congruence and the assumptions regarding the goal congruence of incentive systems

Do we measure what we get?

Performance measures shall enhance the performance of companies by directing the attention of decision makers towards the achievement of organizational goals. Therefore, goal congruence is regarded in literature as a major factor in the quality of such measures. As reality is affected by many variables, in practice one has tried to achieve a high degree of goal congruence by incorporating an increasing number of these variables into performance measures. However, a goal congruent measure does not lead automatically to superior decisions, because decision makers’ restricted cognitive abilities can counteract the intended effects. This paper addresses the interplay between goal congruence and complexity of performance measures considering cognitively-restricted decision makers. Two types of decision quality are derived which allow a differentiated view on the influence of this interplay on decision quality and learning. The simulation experiments based on this differentiation provide results which allow a critical reflection on costs and benefits of goal congruence and the assumptions regarding the goal congruence of incentive systems.

Group-Level Exploration and Exploitation: A Computer Simulation-Based Analysis

Organisational research has studied the tension between exploration and exploitation for years. In essence, this body of research agrees on the necessity of a balance between explora-tive and exploitative processes to prevent an organisation from falling into a learning trap. Thus, to enhance the active management of this balance in organisations, a deeper theoretical understanding of the factors that influence the development of exploration and exploitation has to be gained. One of the recently discussed factors is the interplay between exploration and exploitation on different organisational levels. This paper picks up this discussion. It pro-vides an in-depth, computer simulation-based analysis of the performance of organisational types with varying degrees of within-group and between-group exploration and exploitation in situations of different degrees of task complexity. The findings indicate that a high share of between-group processes as compared to within-group processes positively influences the organisational performance level and that dependent on task complexity the optimal share of exploration and exploitation varies.Organisational Learning, Experience-Based Learning, Exploration, Exploitation, Knowledge Management, Genetic Algorithms

Parental Psychological Control and Autonomy Granting: Distinctions and Associations with Child and Family Functioning

Objective:This study utilized an observational coding scheme to identify parenting behavior reflecting psychological control and autonomy granting, and examined relations between these parenting dimensions and indices of child and family functioning. Design: A community sample of 90 preadolescents (aged 10.5 to 12 years) and both of their parents engaged in a triadic interaction that was coded for parental psychological control and autonomy granting. Participants also completed measures of child adjustment, interparental conflict, and triangulation. Results: Factor analyses indicated that a two-factor model better fit the data than a one-factor model, suggesting that psychological control and autonomy granting are best conceptualized as independent but related constructs. Parental psychological control and autonomy granting exhibited some shared and some unique correlates with indices of child and family functioning. Hierarchical regressions revealed significant interactions between these dimensions, suggesting that the strength of some associations between parents\u27 use of psychological control and youth adjustment problems depends on the level of autonomy granting exhibited by the parent. Conclusions: By examining psychological control and autonomy granting simultaneously as unique constructs, this study identifies patterns of psychological control and autonomy granting that undermine youth adjustment. Findings inform targeted intervention efforts for families of preadolescent youth

Doves and hawks in economics revisited [An evolutionary quantum game theory-based analysis of financial crises]

The last financial and economic crisis demonstrated the dysfunctional long-term effects of aggressive behaviour in financial markets. Yet, evolutionary game theory predicts that under the condition of strategic dependence a certain degree of aggressive behaviour remains within a given population of agents. However, as the consequences of the financial crisis exhibit, it would be desirable to change the 'rules of the game' in a way that prevents the occurrence of any aggressive behaviour and thereby also the danger of market crashes. The paper picks up this aspect. Through the extension of the in literature well-known Hawk-Dove game by a quantum approach, we can show that dependent on entanglement, also evolutionary stable strategies can emerge, which are not predicted by classical evolutionary game theory and where the total economic population uses a non aggressive quantum strategy.Evolutionary game theory; financial crisis; hawk-dove game; quantum game theory

Der Einfluss von Anreizsystemen auf die intrinsische Motivation

Der Einfluss unterschiedlicher Anreiztypen auf die intrinsische Motivation ist seit Jahren Gegenstand einer heftigen Kontroverse. Der vorliegende Beitrag erweitert diese Diskussion, indem er die Analyse auf zwei weitere Kernelemente von Anreizsystemen, die Ausgestaltung der Bemessungsgrundlage und der Belohnungsfunktion, ausweitet. Er arbeitet auf Basis eines sach-analytischen Vorgehens unter Einbeziehung der Theorie der kognitiven Bewertung heraus, welchen Einfluss die in der betriebswirtschaftlichen Literatur diskutierten Anforderungskriterien an diese Elemente auf die intrinsische Motivation entfalten können. Es wird ein hypothetisches Wirkungsgefüge herausgearbeitet, welches daraufhin deutet, dass ein Großteil der Anforderungskriterien positiv auf die intrinsische Motivation wirkt, und das konkrete Ansatzpunkte für weitere empirische Studien liefert.The relationship between extrinsic incentives and intrinsic motivation has attracted much debate over the last decades. Most of the extant literature focuses on the effect of different types of incentives, particularly the role of monetary rewards for intrinsic motivation. This paper adds an additional perspective to the discussion. Using cognitive evaluation theory it explores how different characteristics of incentive systems, such as the objectivity of performance assessment - as opposed to different types of incentives - affect intrinsic motivation. The analysis suggests that most of these characteristics have a positive effect on intrinsic motivation and provides detailed starting points for further empirical research

Wissensmanagement und Controlling: Eine Forschungsperspektive? [Engl.: Knowledge Management and Management Control Systems: A New Research Field?]

GERMAN ABSTRACT: Wissensmanagement und Controlling werden seit Jahrzehnten parallel in der betriebswirt-schaftlichen Forschung diskutiert. Bis dato wurden aber kaum Versuche unternommen, die Zusammenhänge zwischen beiden Bereichen aufzudecken und die so identifizierten Schnittstel-len als potenzielles Forschungsfeld herauszuarbeiten. Das vorliegende Arbeitspapier hat zum Ziel, diese Schnittstelle anhand des beiden Bereichen gemeinsamen Forschungsobjektes unternehmensrelevantes Wissen zu identifizieren und bei-spielhaft ein Vorgehen aufzuzeigen, dass für beide Forschungsstränge zum Erkenntnisfort-schritt führen kann. Darüber hinaus wird eine Einschätzung der Erforschungswürdigkeit von einzelnen Themen wie alternativen Vergütungssystemen und Kennzahlensystemen in diesem Schnittstellenbereich vorgenommen. ENGLISH ABSTRACT: Knowledge management and management control have been discussed separately in business literature for many years. This working paper looks at the possibility to achieve a linkage be-tween the two research arenas and the value of such a linkage with respect to progress in eco-nomic thought. It shows that knowledge management and management control, in fact, overlap in their analy-sis of explicit, declarative and procedural knowledge. Consequently, it is possible to link the two research perspectives. And doing so, in fact, seems very promising with respect to the po-tential advancement in knowledge that can be achieved in both of the two research arenas. Fi-nally the paper shows that analysis of alternative payment schemes and modern, financial and non- financial performance measurement systems seem the two most promising areas for re-search linking knowledge management and management control.Wissensmanagement, Controlling, Knowledge Management, Management Control Systems

Banks' risk culture and management control systems: a systematic literature review

Over ten years of a debate about the best ways to make banks safer have led to the conclusion that improving their risk culture is one venue to achieve this goal. Consequently, different disciplines discuss topics related to risk culture from varying methodological angles. This effort of many scholars provides a rich basis of theoretical and empirical evidence to guide business practice and improve regulation. However, the application of many approaches and methods can result in fragmentation and loss of a comprehensive perspective. This paper strives to counteract this fragmentation by providing a comprehensive perspective focusing particularly on the embeddedness of risk culture into banks’ management control systems. In order to achieve this goal, we apply a systematic literature review and interpret the identified findings through the theoretical lens of management control research. This review identifies 103 articles, which can be structured along three categories: Assessment of risk culture, relation between risk culture and management controls (with the subcategories embeddedness of risk culture in overall management control packages, risk culture and cultural controls, risk culture and action controls, risk culture and results controls, as well as risk culture and personnel controls) and development of banks’ risk culture over time. Along these categories the identified findings are interpreted and synthesized to a comprehensive model and consequences for theory, business practice and regulation are derived

Managerial overconfidence: promoter of or obstacle to organizational resilience?

Organizational resilience provides firms with the capability to face adverse circumstances successfully. Therefore, it constitutes an indispensable capability for each company. As indicated by Upper Echelon Theory, particularly executives and their personal traits exert a major impact on organizational capabilities, decision-making as well as action taking. Thus, they also should play an important role in promoting organizational resilience. However, so far literature lacks a comprehensive understanding regarding these relations. Accordingly, the present paper strives to add to such a comprehensive understanding with a particular focus on managerial overconfidence, one of the most widely and controversially discussed personality trait of executives. To pursue this goal, we develop a model comprising the relevant components of organizational resilience in terms of important resources, conduct a systematic literature review to identify the major corporate areas that are affected by managerial overconfidence and draw conclusions for the identified findings on the relation between organizational resilience and overconfidence. The analysis indicates a positive impact on social resources, a rather negative impact on procedural resources and a mixed impact on financial resources, where e.g. the effect on takeover activities is negative while the impact on financing preferences is at least partly positive. Moreover, the identified literature in large parts provides evidence regarding material resources, while social and procedural resources are covered to a lesser extent, indicating a need for further research

Curbing discriminating human resource practices — a microfounded perspective

Discrimination constitutes a sticky phenomenon in corporations despite decades of anti-discrimination initiatives. We argue that this stickiness is related to the complex relations between various factors on the micro level in organizations, which determine and stabilize each other. Based on a systematic literature review comprising empirical studies on discrimination due to age, gender, race, and ethnicity/nationality, we find eight general mechanisms which can be further clustered into an economic, a behavioral, and a socio-structural domain. While mechanisms in the behavioral domain form the roots of discrimination, the economic and the socio-structural mechanisms stabilize each other as well as the behavioral ones. Thus, the analysis shows that the various building blocks on the micro level are entangled with each other and suggests a structured way by identifying a problem hierarchy to manage this complexity