Effects of the management control system in unethical behaviors

Abstract

Purpose This study investigates which dimensions of the management control system (MCS) increase the perception of organizational justice and reduce unethical behavior in the perception of managers. The purpose of this paper is to validate the theoretical model of the study of Langevin and Mendoza (2012), testing the theoretical hypotheses formulated by the authors. Design/methodology/approach A survey was performed in companies listed among the Best and Largest of Exame Magazine, and the sample is composed of 102 respondents of the research, which consists of 41 assertions. Findings The results of the structural equation modeling show that the definition of objectives increases the perception of procedural justice, but the same was not observed regarding the remuneration of the managers. Likewise, disregarding aspects that are uncontrollable by managers in performance evaluation does not lead to the perception of procedural and distributive justice. However, feedback quality leads to the understanding that the MCS is fair. Perception of procedural and distributive justice was also observed in the use of multiple measures of performance by the company. Research limitations/implications Other factors that have not been investigated may interfere with and contribute to the reduction of unethical behavior (budget slack and data manipulation). Originality/value The only variable that interferes in the reduction of unethical behavior is feedback quality. The non-confirmation of all the hypotheses instigates the replication of the research in other contexts for empirical validation of the theoretical model of Langevin and Mendoza (2012).

Perceptions of organizational justice in incentive contracts and their effect on congruence between personal and organizational goals

“…Giraud, Langevin, and Mendoza's (2008) survey found that there is no concern about the neutralization of uncontrollable factors among Brazilian trustees. Similarly, Klein, Beuren, and Dal Vesco, (2019)Luciana Klein, Ilse Maria Beuren and Delci Dal Vesco. Purpose: This study investigates which dimensions of the management control system (MCS found that when trustees disregard uncontrollable factors when evaluating performance, this has no impact on the perceptions of procedural and distributive justice.…”

“…Purpose: This study investigates which dimensions of the management control system (MCS found that when trustees disregard uncontrollable factors when evaluating performance, this has no impact on the perceptions of procedural and distributive justice. Those results must be carefully considered because the environment the concept was applied to was not investigated; that is, there is the possibility of incomprehension on the part of the respondents of the concept's application (Klein et al, 2019)Luciana Klein, Ilse Maria Beuren and Delci Dal Vesco. Purpose: This study investigates which dimensions of the management control system (MCS.…”

Properties of feedback mechanisms on digital platforms: an exploratory study

“…An appropriate design is essential, because management control systems are directly related to organizational commitment and trust in managers (Magner et al 2006). Furthermore, perceived fairness influences the behavior of a subordinate (Klein et al 2019;Langevin and Mendoza 2013;Little et al 2002) and leads to less budgetary slack, higher job performance, and greater helping behavior (Magner et al 2006). Conversely, dysfunction results in unethical behavior (Langevin and Mendoza 2013; Merchant and van der Stede 2017), which mainly consists of budgetary slack (e.g., Dunk 1993;Libby 2003;Merchant 1985) and data manipulation (e.g., DeFond and Park 1997; Merchant and Rockness 1994; Merchant and van der Stede 2017).…”

“…Based upon the properties and the differences between feedback mechanisms and management control systems, we develop a theoretical framework, illustrate individual components, and discuss negative behavior of platform users caused by non-compliance with management control systems properties. These properties include precision (e.g., Burkert et al 2011;Groen et al 2017;Moers 2006), sensitivity (e.g., Burkert et al 2011;Groen et al 2017;Moers 2006), verifiability (e.g., Groen et al 2017;Moers 2006), multiple performance measures (e.g., Klein et al 2019;Langevin and Mendoza 2013;Ittner et al 2003), participation in target setting (e.g., Langevin and Mendoza 2013), and quality of feedback (e.g., Klein et al 2019;Langevin and Mendoza 2013;Magner et al 2006;Roberson and Stewart 2006). Table 3 shows the properties of the framework with their explanations and differentiations from the properties of management control systems.…”

“…In particular, Widener (2006) examined plans that include both financial and non-financial measures. Other authors such as Klein et al (2019) used the items for multiple measures. In the context of feedback mechanisms, the multiple measures item indicates that the mechanism is based on both multiple quantitative and qualitative measures.…”