Partners’ efforts to manage risk extend far beyond decisions made when an alliance is formed and continue throughout its lifecycle. As an alliance matures, it is expected that partners will adapt controls to address unanticipated, emergent risks; however, empirical evidence indicates that such changes are relatively rare. This study aims to advance our understanding of the constraints on control adaptation

We use an experiment to test the hypothesis that adding discretionary adjustment to performance-based pay strengthens the sorting of employees based on how strongly they identify with the organization’s objectives. Our conceptualization of identification is grounded in identity economics, which predicts that employees who identify strongly with the organization’s objectives exert greater effort toward

We examine the relationship between the use of value-based key performance indicators in a firm’s management control system and the dynamics of working capital (WC). We hypothesize that firms with value-based management control systems (VBMCS) manage WC more cautiously, in particular regarding excessive WC. Theoretically, we link this to the argument that value-based performance measures explicitly

We examine the effect of aggregate economic policy uncertainty (EPU; Baker et al., 2016) on firms’ asymmetric cost reaction to sales changes (cost stickiness). We find that cost stickiness decreases with EPU in the United States (US) after we control for the positive relationship between cost stickiness and election years (Lee et al., 2020). This result is consistent with managers revising down their

Current income tax systems are characterized by an asymmetric treatment of gains and losses. This implies that the (effective) tax rate on profits exceeds that on losses. We study the contractural relationship between two parties (the principal and the agent). For example, such a relationship occurs if a franchisee (agent) contracts with a franchiser (principal) or when a new partner (agent) enters

To prevent unethical behaviour by employees, many companies include compliance aspects in their compensation schemes. For example, ex-post bonus adjustments allow managers to retract parts of bonuses previously paid to employees in reaction to fraudulent behaviour. We propose that the level of ex-post adjustment due to an employee’s misconduct depends on the employee’s ex-ante objective performance

This paper explores the extent to which bargaining power asymmetries among supply chain members moderate the effect that the delay costs of the setting exert on negotiation outcomes. First, we propose that the influence of delay costs on the initial gap between the bargaining demands of sellers and buyers (i.e., initial bargaining gap) decreases when buyers have a bargaining power advantage over sellers

While recent studies indicate that value-based management (VBM) helps owners in aligning managerial interests (i.e., decision-influencing role), little evidence is provided for its support in managerial decision-making (i.e., decision-facilitating role). We investigate whether the depth of VBM implementation and contextual factors may determine VBM’s decision-facilitating role. We investigate our research

How can sustainability control change organizational practices dominated by the business-as-usual paradigm? This paper offers a practice-based perspective on the question with the aim of approaching sustainability control tools as something organizations do rather than something they have. Using data from an ethnographic study of a gambling company, the study explores how sustainability actors put

This study aims to contribute to the scant contingency theory literature on the determinants of strategic management accounting (SMA) practices and the role management accountants play. We develop and test a more complex theoretical model than in prior studies, to simultaneously examine the role of three variables: management accountant networking, information systems (IS) quality and organizational

This research note provides additional empirical evidence relating to the performance effects of diagnostic and interactive control, both in isolation and in combination with an enabling approach to control. Drawing on data from a survey of 221 Australian firms, the findings suggest that while diagnostic eco-control has no direct influence on environmental performance, its interaction with an enabling

In this paper, I investigate whether the honesty of managers’ budget reporting depends on the state of their mood. The results from a laboratory experiment demonstrate that managers in a positive mood report their budgets more honestly than managers in a negative mood. Attaining a neutral mood state, however, does not increase honesty sufficiently to balance out the effects of a negative mood state

This abductive case study of MCS design change in a Swedish university shows how social and technical forms of control can be underpinned and held together by different institutional logics (forming so-called ‘socio-technical dyads of MC’), which gave them different, yet complementary functionalities to achieve organization-wide goals. Specifically, a since-long established neoliberal logic nurturing

This paper examines how organizational actors use Management Accounting Systems (MAS) in a public social housing organization in a context marked by institutional pressures for both social and financial accountability. More specifically, we use practice theory to examine the articulation of practical intelligibility, i.e. how actors make sense of competing institutional pressures in their day-to-day

Firms typically use a ‘one-size-fits-all’ (OSFA) compensation contract that specifies a common formulaic relation between performance and compensation (i.e., a performance bonus) for non-executive managers in similar jobs. However, a contract that is appropriate on average, may be suboptimal for individual managers if heterogeneity in the operating environment creates varying compensation risk. We

This study examines whether the performance of a business unit affects the likelihood of employees’ promotion in an organization and explores potential moderators of the relationship. Using a sample of 4,657 executive-years in Samsung Group affiliates, it finds that promotions are more likely with good organizational performance, as measured in terms of employment growth and return on assets (ROA)

This study concerns risk talk. Recent studies draw attention to the significance of communication for the development of intelligent (reflexive) as opposed to compliance-focused, secondary forms of risk management, but also show that risk management systems do not necessarily produce reflective forms of risk talk. To develop an understanding of why reflective risk talk is (un)able to unfold, we study

This study examines the effects of executive compensation structures and research and development (R&D) reporting methods on subordinate managers’ psychophysiological responses and decisions to engage in real earnings management. Results from one 2 × 2 between-participants experiment indicate that when R&D expenditures are capitalized, relative to expensed, managers are less willing to abandon a failing

This paper explores how combinations of management control (MC) elements can create tensions, and what supervisors can do to manage these tensions. We extend the literature on the interplay of MC elements by examining the underlying micro-processes that give rise to tensions between MC elements. Specifically, drawing on both the MC and the organization literature, we investigate how interactions between

This paper contributes to the diverse and growing stream of accounting research on Foucault’s notion of counter-conduct, which is broadly concerned with the uses of accounting in the development of alternative ways of governing. Its key problematic lies in the roles that accounting can play in the intertwining of particular practices of governing, for instance, by underpinning practices that facilitate

Self-reported motivators, i.e., stated preferences for work incentives, have been examined extensively based on the assumption that they provide valuable information for the design of compensation systems. However, the extent to which these stated preferences match performance has been overlooked. I use a field experiment with sales representatives to examine whether a higher preference for an incentive

Similarity between a firm and a potential peer firm with respect to important economic characteristics is a first-order criterion to select peer firms. As economic characteristics are often captured through information disclosed in publicly available financial reports, financial reporting quality (FRQ) of a potential peer firm could influence peer group selection. We hypothesize that potential peer

It is generally recognized that decisions about capital projects should be made by independent reviewers who select the economically strongest projects. However, prior research finds that reviewers’ choices can be biased by their affective reactions to a manager proposing a capital project. Potentially, this bias could be reduced by holding reviewers more accountable. We contend that holding reviewers

Using unique data from a medical typing unit (2011–2014), this paper empirically explores the influence of performance pay on employee productivity in a risk-less low incentive intensity environment. We analyze a routine task performed by lower-level employees. We analyze a setting with strong sectoral agreements and thus a clear (and comparatively high) basic wage level set by the general collective

Recent research implies that the association between competition intensity and management accounting system (MAS) design varies with the type of competition involved, depending on the purpose of the MAS in focus. This study finds that competition intensity can be positively or negatively associated with customer accounting (CA) sophistication depending on the extent to which firms tailor their activities

International transfer pricing within decentralized multinational enterprises (MNEs) is considerably complex when transfer prices concurrently have to satisfy taxation and managerial accounting objectives. We consider an MNE consisting of an upstream subsidiary in one country and a possibly divisionalized downstream subsidiary in another country. We find that the inherent trade-off of international

The issue of asymmetric cost behavior has attracted significant interest in the managerial accounting literature. The literature has hypothesized that adjustment costs, particularly labor adjustment costs, play a significant and central role in driving empirically observed cost behavior patterns. Recent studies attempt to empirically test this hypothesis, albeit with distinct limitations. Using a new

In this paper we seek to understand the influence of founders on the design and use of management control systems (MCS) through a theoretical lens known as imprinting. The organizational literature shows that founders are a source of imprinting, since their unique background informs the blueprint for their organization, which can affect patterns of organizational design and development. We undertake

Management control (MC) design is crucial to the success of buyer-supplier relationships, yet we know little about how a buying company designs the management controls (MCs) of such relationships over time. In this paper, we use data collected in a six-year field study on the design of the MCs of a new facilities management (FM) outsourcing relationship. We find that boundary spanners learn to control

In this study, we examine the impact of community social capital on asymmetric cost behaviour. Community social capital captures the strength of social norms and the density of social networks in a region. As such, it is a socio-economic factor that might affect managerial resource adjustment decisions via different channels. We find that firms headquartered in U.S. counties with high social capital

This paper is about the role of accounting in making decisions about contested organizational change. We study how two strategic options emerged and were valued differently in a protracted case regarding sourcing by the Danish Defence Force. Drawing on Actor-Network Theory we show how the two strategic options emerged and were pitted against each other in what Callon descr