Performance Measures and Short-Termism: An Exploratory Study

We examine the relationship between performance measurement systems and short-termism. Hypotheses are tested on a sample of senior managers drawn from a major telecommunications company to determine the extent to which the diagnostic and interactive uses of financial and non-financial measures give rise to short-termism. We find no evidence to suggest that the use of financial measures, either diagnostically or interactively, leads to short-term behaviour. In contrast, we find a significant association between the use of non-financial measures and short-termism. Results suggest that the diagnostic use of non-financial measures leads managers to make inter-temporal trade-off choices that prioritise the short term to the detriment of the long term, while we find interactive use is negatively associated with short-termism. We find an imbalance in favour of the diagnostic use over the interactive use of non-financial performance measures is associated with short-termism. Overall, findings highlight the importance of considering the specific use of performance measures in determining the causes of short-termism

Examining a positive psychological role for performance measures

Emerging evidence suggests that management control systems may generate positive psychological effects, leading to higher levels of managerial performance. We extend this literature by examining the extent to which (1) financial vis-à-vis non-financial measures and (2) diagnostic vis-à-vis interactive utilisation of performance measures may be associated with decreasing role ambiguity and increasing psychological empowerment with performance as the ultimate outcome variable. We find that the interactive utilisation of non-financial performance measures can be particularly important for generating a positive psychological experience and (indirectly) increasing performance. Our study contributes further evidence of the psychologically beneficial role played by management control systems

From ‘rock stars’ to ‘hygiene factors’:teachers at private accountancy tuition providers

In this paper, we examine the role, status and autonomy of teachers at English private accountancy tuition providers from 1980 to the present. We argue that, during this period, teachers transformed from ‘rock stars’ who enjoyed significant status and autonomy over their work to ‘hygiene factors’ in a largely standardised and commodified teaching environment. Growing cost pressures on tuition providers and an increasing emphasis on the quality and consistency of the learning experience are identified as significant factors in this transformation. We discuss these findings with reference to current developments towards corporatisation and marketisation in the English higher education sector

Dynamika „tworzenia-rynków” w szkolnictwie wyższym

This paper examines what to some is a well worked furrow; the processes and outcomes involved in what is typically referred to as ‘marketisation’ in the higher education sector. We do this through a case study of Newton University, where we reveal a rapid proliferation of market exchanges involving the administrative division of the university with the wider world. Our account of this process of ‘market making’ is developed in two (dialectically related) moves. First, we identify a range of market exchanges that have emerged in the context of wider ideological and political changes in the governance of higher education to make it a more globally–competitive producer of knowledge, and a services sector. Second, we explore the ways in which making markets involves a considerable amount of micro–work, such as the deployment of a range of framings, and socio–technical tools (Çalışkan and Callon 2009, 2010; Berndt and Boeckler 2012). Taken together, these market–making processes are recalibrating and remaking the structures, social relations and subjectivities, within and beyond the university and in turn reconstituting the university and the higher education sector.W niniejszym artykule przedstawiamy wyniki badania tego, co wiele osób uznało za dobrze już opracowaną niszę, a mianowicie procesów i rezultatów czegoś, co najczęściej określa się mianem ‘urynkowienia’ sektora szkolnictwa wyższego. Podejmujemy tę kwestię w oparciu o przygotowane przez nas studium przypadku Newton University, w kontekście którego odsłaniamy gwałtowne rozpowszechnienie się wymiany rynkowej między administracyjnymi sekcjami  uniwersytetu i jego szerszym otoczeniem. Nasze podejście do procesu „tworzenia-rynku” rozwinięte zostało w dwóch (dialektycznie powiązanych ze sobą) krokach. Po pierwsze, rozpoznajemy zakres wymian rynkowych, wyłonionych w kontekście szerszych ideologicznych i politycznych przemian obszaru ładu instytucjonalnego szkolnictwa wyższego, których celem było uczynienie go bardziej konkurencyjnym wytwórcą wiedzy w skali globalnej, jak również sektorem usługowym. Po drugie, badamy sposoby, w jakie tworzenie rynków wymaga dużego nakładu mikro-pracy, takiej choćby jak zastosowanie szerokiego zakresu określonych ram czy narzędzi socjo-technicznych (Çalışkan, Callon 2009, 2010; Berndt, Boeckler 2012). Ujęte łącznie, wspomniane procesy tworzenia-rynku dokonują ponownego dopasowania i przekształcenia struktury, stosunków społecznych i podmiotowości w obrębie uniwersytetu i poza nim, w ten sposób z kolei konstytuując uniwersytet i sektor szkolnictwa wyższego w nowej formie

The multiplicity of performance management systems:Heterogeneity in multinational corporations and management sense-making

This field study examines the workings of multiple performance measurement systems (PMSs) used within and between a division and Headquarters (HQ) of a large European corporation. We explore how multiple PMSs arose within the multinational corporation. We first provide a first‐order analysis which explains how managers make sense of the multiplicity and show how an organization's PMSs may be subject to competing processes for control that result in varied systems, all seemingly functioning, but with different rationales and effects. We then provide a second‐order analysis based on a sense‐making perspective that highlights the importance of retrospective understandings of the organization's history and the importance of various legitimacy expectations to different parts of the multinational. Finally, we emphasize the role of social skill in sense‐making that enables the persistence of multiple systems and the absence of overt tensions and conflict within organizations

The Impact of Brand Quality on Shareholder Wealth

This study examines the impact of brand quality on three components of shareholder wealth: stock returns, systematic risk, and idiosyncratic risk. The study finds that brand quality enhances shareholder wealth insofar as unanticipated changes in brand quality are positively associated with stock returns and negatively related to changes in idiosyncratic risk. However, unanticipated changes in brand quality can also erode shareholder wealth because they have a positive association with changes in systematic risk. The study introduces a contingency theory view to the marketing-finance interface by analyzing the moderating role of two factors that are widely followed by investors. The results show an unanticipated increase (decrease) in current-period earnings enhances (depletes) the positive impact of unanticipated changes in brand quality on stock returns and mitigates (enhances) their deleterious effects on changes in systematic risk. Similarly, brand quality is more valuable for firms facing increasing competition (i.e., unanticipated decreases in industry concentration). The results are robust to endogeneity concerns and across alternative models. The authors conclude by discussing the nuanced implications of their findings for shareholder wealth, reporting brand quality to investors, and its use in employee evaluation

Market inefficiency in person-to-person betting: examining 'Known Loser' insider trading on the exchanges

Applying the Shin z measure of market efficiency to the relatively new person-to-person internet betting exchanges, Smith, Paton, and Vaughan Williams found "significantly lower market biases" compared to bookmaker-dominated markets. A reduced favorite-longshot bias is interpreted as evidence that insider trading on the exchanges "is not widespread" and "not as commonplace... as is sometimes portrayed in the media." Given that the Shin measure assumes "betting with bookies," whereas the exchanges represent "betting without bookies," the present study employs the notion of 'significant mover' to empirically test for the presence of 'known loser' insider trading on the exchanges where traditional notions of bookmaking do not apply. Findings indicate that, far from being less problematized by insider trading compared to racetrack betting, activity aimed at profiting from "known losers" may be potentially commonplace on the exchanges. This includes profiting from horses that are unplaced. This study offers new insight into the efficiency of betting markets

Value systems as a mechanism for organizational change

Purpose – The purpose of this paper is to investigate the role played by value systems as mechanisms for organizational change. Three issues are examined: purpose; implementation; and effects, intended and unintended, that may arise from using values systems as a management control mechanism to effect organizational change. Design/methodology/approach – The research is based on evidenced garnered from an in-depth, longitudinal study of a major UK based organization which operates in the “global communications industry”. Data are collected from a range of sources, but particularly interviews and a questionnaire survey involving a broad cross-section of the company's managers. Findings – Findings suggest that, in terms of purpose, top management may use value systems as a management control mechanism to effect organizational change by espousing a new set of normative values which should inform managers' decisions and actions, particularly in trade-off situations. Communication and implementation of value systems may involve a multitude of formal and informal information-based mechanisms and procedures, including mission statements, newsletters, email, “strategy days”, “roadshows” and similar social events. Implementation may rely on change agents creating a drive for change. However, the results of a questionnaire survey suggest that value systems may be only partly successful in securing their intended purpose of mobilising attitudes around a particular set of normative values. Various unintended effects may arise which, in the present case, include increasing project redundancy, decreasing project scrutiny, a re-distribution of social esteem within the firm, polarisation of attitudes towards budgetary control, and a general reduction in the exercise of hierarchical management control. Overall, it argued that the use of value systems as a mechanism of organizational change may be as problematic to the firm as it is beneficial. Practical implications – The results of the present study may help firms devise more appropriate value systems for “maintaining or altering patterns of organizational behaviour”. Originality/value – The present study contributes further insight is through evidence which suggests value systems may be used to communicate a set of quite specific values; and adds to a knowledge of the range of procedures which may be involved in using value systems to effect organizational change