Management-by-exception reporting: An empirical investigation

Ricketts, John A.; Nelson, Reed E.

doi:10.1016/0378-7206(87)90002-4

Cited by 10 publications

(4 citation statements)

References 14 publications

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“…Kaplan (1975) provides a detailed explanation of variance selection approaches that range from the very basic (investigate all variances that fall outside a given level) to the very complex (the use of probability theory). However, surveys regarding whether or not a variance should be investigated indicate that these decisions tend to be based on managerial judgment, when a variance exceeds a given dollar amount, or when a variance exceeds a given percent of a standard (Gaumnitz and Kollaritsch, 1991;Laudeman and Schaeberle, 1983;Ricketts and Nelson, 1987). Although several articles (i.e.…”

Section: Variance Investigation Decisionsmentioning

confidence: 98%

Managers' variance investigation decisions: an experimental examination of probabilistic and outcome ambiguity

Keller

Keltyka

2001

Behavioral Decision Making

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Information ambiguity is prevalent in organizations and may in¯uence management decisions. This study examines, given imprecise probabilities or outcomes, how managers decide which department's performance to investigate further when they are provided with performance benchmarks expressed in numerical intervals. Seventy-nine MBA students participated in two experiments involving investigation decisions. We presented participants with interval benchmarks of a ®rm's expenses. Being below or above the benchmark should have been seen as equally negative. We found that, when facing outcome ambiguity, our participants consistently preferred to investigate further those departments whose performance was described as having an ambiguous outcome (when the outcome's range was centered either below or above the interval benchmark). However, when facing probabilistic ambiguity, there were two predominant choice patterns: consistently choosing to investigate the department whose performance is described with an ambiguous probability, or consistently choosing to investigate the department with unambiguous performance. To gain further insight, we conducted a follow-up study collecting written protocols of participants' reasons for making choices involving ambiguous performance information. The results show that our participants displayed similar decision-making processes when facing outcome ambiguity and probabilistic ambiguity.

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Section: Variance Investigation Decisionsmentioning

confidence: 98%

Managers' variance investigation decisions: an experimental examination of probabilistic and outcome ambiguity

Keller

Keltyka

2001

Behavioral Decision Making

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“…Management by exception (MBE), one of the oldest forms of a management control system (Ricketts & Nelson, 1987;Taylor, 1911), lays down the principle that only variances (exceptions) from usual conditions should be brought to managers' attention. All else should be handled by operational staff using standard procedures.…”

Section: Management By Exception For Demand Forecastingmentioning

confidence: 99%

ROC-based model estimation for forecasting large changes in demand

Schneider

Gorr

2015

International Journal of Forecasting

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Forecasting for large changes in demand should benefit from different estimation than that used for estimating mean behavior. We develop a multivariate forecasting model designed for detecting the largest changes across many time series. The model is fit based upon a penalty function that maximizes true positive rates along a relevant false positive rate range and can be used by managers wishing to take action on a small percentage of products likely to change the most in the next time period. We apply the model to a crime dataset and compare results to OLS as the basis for comparisons as well as models that are promising for exceptional demand forecasting such as quantile regression, synthetic data from a Bayesian model, and a power loss model. Using the Partial Area Under the Curve (PAUC) metric, our results show statistical significance, a 35 percent improvement over OLS, and at least a 20 percent improvement over competing methods. We suggest management with an increasing number of products to use our method for forecasting large changes in conjunction with typical magnitude-based methods for forecasting expected demand. for product demand) to use our method for forecasting large changes in conjunction with typical magnitude-based methods for forecasting expected demand.

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“…Regarding leadership styles, scholars hold different views on the role of transactional leadership contingency rewards in influencing employee innovation behavior: Ricketts and Nelson (1987) believe that transactional leaders in organizations will focus on task orientation and separate innovation tasks. Although they are hesitant to take the initiative to innovate, e mployees must actively engage in innovative behaviors and accomplish the goal of innovation when their leaders demand it.…”

Section: Related Research On Innovation Effectivenessmentioning

confidence: 99%

The influence of transactional leadership style on employees' innovation ability

Zhao,

Sun

2023

Nurture

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Purpose: This study delves into two mainland Chinese footwear manufacturing companies to understand the link between transactional leadership and employee creativity, focusing on the mediating role of psychological empowerment. Design/Methodology/Approach: Employing descriptive statistical analysis, reliability analysis, confirmatory factor analysis, correlation analysis, and regression analysis, the study collected 576 valid questionnaires. Data analysis was conducted using SPSS 25 and Analysis of Moment Structures statistical software. Findings: Results confirm that psychological empowerment positively influences employee creativity. Transactional leadership also has a significant positive impact. Notably, psychological empowerment partially mediates the relationship between transactional leadership and creativity. Conclusions: Both transactional leadership and psychological empowerment are key factors in enhancing employee creativity, particularly in the two Chinese private footwear companies studied. Research Limitations: The research focuses on large and medium-sized firms from two Chinese regions, excluding smaller entities. Several potential influencing factors for creativity still need to be addressed. Practical Implications: Business leaders are advised to possess professional, solid skills, ensure fair treatment of employees, and provide appropriate rewards. Such practices can bolster team cohesion, spur innovation, and support sustainable enterprise growth. Contribution to literature: This work underscores the influence of psychological empowerment and transactional leadership on creativity, shedding light on the former's mediating role. The findings enrich the literature and offer a foundation for future research in similar domains.

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Management-by-exception reporting: An empirical investigation

Cited by 10 publications

References 14 publications

Managers' variance investigation decisions: an experimental examination of probabilistic and outcome ambiguity

Managers' variance investigation decisions: an experimental examination of probabilistic and outcome ambiguity

ROC-based model estimation for forecasting large changes in demand

The influence of transactional leadership style on employees' innovation ability

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