In recent years, the scope of internal auditing has broadened considerably, increasing the importance of internal auditing as part of the organization's management control structure.
Extant literature holds that business unit (BU) managers' influence in the design of their performance measurement system (PMS) is beneficial; however, empirical evidence is mixed. Using survey data from 293 BU managers, we study their perception that the PMS fails to support their decision-making. The findings indicate that, on average, managerial influence in PMS design decreases the perception of PMS failure and hence indeed seems to be beneficial. However, importantly, the effect differs depending on the situation. For instance, when there are higher levels of information asymmetry between managers and superiors, lower levels of interdependencies, or lower levels of information asymmetry between employees and managers, managerial influence in PMS design decreases failure. To the contrary, when there are lower levels of information asymmetry between managers and superiors, higher levels of interdependencies, or higher levels of information asymmetry between employees and managers, influence in PMS design increases PMS failure.
This teaching case brings the true story of a destructive fire at mobile phone company Vodafone in The Netherlands to life. The fire has had a huge impact on the company, its customers, and society at large. The story illustrates the impact of mobile phone communication disturbances, and crisis communication within organizations. The case is suitable for classes of bachelor students in business economics or information technology, and for executive education. The case is written as a play, which enables course participants to engage in experiential learning. Materials provided include actual communication material developed by Vodafone during the crisis.
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