An investigation of how the informal communication of firm preferences influences managerial honesty

Newman, Andrew H.

doi:10.1016/j.aos.2014.02.004

Cited by 48 publications

(24 citation statements)

References 21 publications

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“…Other experimental studies, in which the manager reports productive capacity, also find that managers' behavior deviates significantly from wealth maximization; that is, budgetary slack is well below the maximum amount (Chow et al 1991;Waller 1988). Prior studies also provide evidence that the level of honesty or slack is affected by behavioral factors such as managers' reputational or ethical concerns (Stevens 2002;Webb 2002), social pressure to appear honest (Hannan et al 2006;Young 1985), fulfillment of psychological contracts (Krishnan et al 2012), communication of firm preferences (Newman 2013), and ability to rationalize misreporting by sharing slack with others (Church et al 2012). Our study investigates whether the ability to remain ignorant of relevant information affects the extent to which managers report opportunistically.…”

Section: Introductionmentioning

confidence: 98%

Information Acquisition and Opportunistic Behavior in Managerial Reporting

Church

Hannan

Kuang

2014

Contemporary Accting Res

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Section: Introductionmentioning

confidence: 98%

Information Acquisition and Opportunistic Behavior in Managerial Reporting

Church

Hannan

Kuang

2014

Contemporary Accting Res

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“…Merchant (1985), Ouchi (1979) and Rockness and Shields (1984) are classic frameworks that underpin the management control literature and all embrace a range of social, clan and personnel controls. While previous research has noted that informal controls are often overshadowed by formal controls (Jollands, Akroyd, & Sawabe, 2015;Pitkänen & Lukka, 2011), their importance to our understanding of control in practice is plainly evident in the burgeoning literature on informal controls (Ahrens & Chapman, 2004;Cardinal, Sitkin, & Long, 2004;Chenhall, Hall, & Smith, 2010;Newman, 2014;Nixon & Burns, 2012;Roberts, 2004;Spector & Brannick, 1995). In the context of contingency research, Otley (2016, p. 45) points out "the 'package' concept has not yet been taken seriously in the design of most empirical studies although this is fundamental to the design of future studies".…”

Section: Commensuration At the Level Of The Frameworkmentioning

confidence: 99%

Simons’ Levers of Control Framework: Commensuration within and of the Framework

Curtis¹,

Lillis²,

Sweeney³

2017

Advances in Management Accounting

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“…Alternatively, corporate management may use informal controls to encourage more cooperative behavior between units (Choi ; Colbert and Spicer ; Newman ). Since direct corporate management intervention to mandate internal sales interferes with the unit managers autonomy (Anthony and Govindarajan ), corporate management may choose an intermediate route of providing encouragement to the divisions to trade internally while still maintaining the autonomy and competitiveness of the units (Eccles ; Van Helden et al.…”

Section: Related Researchmentioning

confidence: 99%

“…An opponent that displays positive emotions in a less collaborative environment may appear as having lower limits, and a unit manager may expect less resistance to a higher price and estimate smaller price reductions. 4 Alternatively, corporate management may use informal controls to encourage more cooperative behavior between units (Choi 2014;Colbert and Spicer 1995;Newman 2014). Since direct corporate management intervention to mandate internal sales interferes with the unit managers autonomy (Anthony and Govindarajan 2007), corporate management may choose an intermediate route of providing encouragement to the divisions to trade internally while still maintaining the autonomy and competitiveness of the units (Eccles 1985;Van Helden et al 2001).…”

mentioning

confidence: 99%

The Role of Informal Controls and a Bargaining Opponent's Emotions on Transfer Pricing Judgments

Bhattacharjee

Moreno

2016

Contemporary Accting Res

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While accounting research has demonstrated the role of a decision maker's own emotions during judgments, psychology research proposes that others' emotions provide an informational signal to assess an opponent's limits, cooperativeness, and toughness during bargaining. We examine how a bargaining opponent's emotions provide information signals that can be used by a selling division manager during transfer pricing decisions and whether informal control system choices by corporate management to foster cooperation can create a context that influences how managers react to these signals. In an experiment, when informal controls to encourage cooperation were absent (less collaborative environment), managers' selling price estimates were more conciliatory when the opponent was described as displaying negative emotions than when described as displaying positive emotions. However, when informal controls to cooperate were present (more collaborative environment), managers' selling price estimates were more conciliatory when the opponent displayed positive rather than negative emotions. Path analyses suggest that managers' perception of their opponents' signals is the mechanism by which opponents' emotions influence transfer-price decisions. This study highlights the role of others' emotions as information signals during accounting bargaining and provides insight into the context dependency of opponents' emotions under various control system structures.L'incidence des contrôles informels et des emotions de l'adversaire en situation de n egociation sur les jugements en mati ere de prix de transfertLes chercheurs en comptabilit e ont d emontr e que les emotions propres au d ecideur influaient sur les jugements de ce dernier; les chercheurs en psychologie avancent, quant a eux, que les emotions d'autrui livrent un signal d'information permettant d' evaluer les limites de l'adversaire, sa propension a coop erer et sa d etermination dans des n egociations. Les auteurs se demandent en quoi les emotions d'un adversaire en situation de n egociation livrent des signaux d'information que peut utiliser le responsable d'une division des ventes dans ses d ecisions relatives aux prix de transfert et si les choix de la direction en mati ere de syst emes de contrôles informels visant a favoriser la coop eration peuvent engendrer un contexte qui influencera la fac ßon dont les gestionnaires r eagissent a ces signaux. Selon les r esultats de l'exp erience men ee par les auteurs, en l'absence de contrôles informels visant a favoriser la coop eration (environnement moins favorable a la collaboration), les estimations des prix de vente fournies par les gestionnaires sont plus conciliatoires lorsque l'adversaire * Accepted by Alan Webb. We thank Wendy Bailey, Jim Maroney, May Zhang, Charlie Bame-Aldred, and Velina Popova for their comments. We also thank the two anonymous reviewers and Alan Webb for many valuable comments and suggestions throughout the review process.Contemporary Accounting Research Vol. affiche des emotions n egatives...

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An investigation of how the informal communication of firm preferences influences managerial honesty

Cited by 48 publications

References 21 publications

Information Acquisition and Opportunistic Behavior in Managerial Reporting

Information Acquisition and Opportunistic Behavior in Managerial Reporting

Simons’ Levers of Control Framework: Commensuration within and of the Framework

The Role of Informal Controls and a Bargaining Opponent's Emotions on Transfer Pricing Judgments

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