“Global” management accounting research: some reflections

I start with some examples of global studies that compare and contrast "remedies" to management control and corporate governance issues across borders to expose the common tenet of such studies that "uniformity" of practices or regulations is "counter-productive" given national/cultural variations across countries. However, I critically evaluate this so-called "non-uniformity" prescription by considering the costs of local or situational adaptions. This naturally links with the "homogenizing" effects of globalization, where I ponder whether globalization might actually reduce the power of comparative studies across countries or regions, or whether, regardless, there remains great benefit to be had from studying "local" practices that can be theoretically generalized. I also offer some suggestions to help strengthen the design of comparative studies to try and maximize their (conceptual, if not econometric) power

Performance Measure Properties and Incentives

We examine the effects of performance measure properties on incentive system design, using data on incentive contracts for auto dealership managers. The data include information on five properties: two indicators of risk; two indicators of distortion; and one indicator of potential manipulation. We find that these properties have important effects on incentive system design. First, firms appear to choose the ?best? performance measure available along these dimensions, and use it for the most important (primary) formula bonus. Second, the properties of this primary performance measure are important determinants of the weight placed on the measure for explicit. Third, firms appear to use other performance measures to balance multitask incentives relative to the primary performance measure. Specifically, we find evidence that second and third bonuses are used to provide better incentives for cooperation and to reduce incentives for manipulation. Fourth, we present evidence that subjectivity, through discretionary bonuses based on subjective performance evaluations, and also through implicit incentives for promotions and other rewards, also appear to play the same roles

The relationship between two consequences of budgetary controls: Budgetary slack creation and managerial short-term orientation

Previous studies have provided contradictory evidence with respect to the effect of rigid budgetary controls on slack and other dysfunctional behaviors. One motivation for the current study was to test whether spillover effects exist between two alleged dysfunctional consequences of a rigid budgetary control style: budget slack creation and managerial short-term orientation. The data support this contention: reducing one form of dysfunctional behavior (slack creation) through rigid controls seems to spill over into another form (stronger management focus on business matters that affect short-term results). However, the budgetary control styles that organizations implement, as well as the behaviors that they encourage, may be affected by two important antecedents: business unit past performance and competitive strategy. The results indicate that business units that either pursue a differentiation strategy or have been more profitable are subject to less rigid budgetary controls, which augment the propensity to build slack as well as the tendency for managers to think long-term. These relationships are tested in a structural equation model on survey data obtained from 153 business unit general managers

Academic research for impact

EditorialEditoria