29 results on '"Mandy M. Cheng"'
Search Results
2. Influence of Control Precision and Prior Collaboration Experience on Trust and Cooperation in Inter-Organizational Relationships
- Author
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Shannon W. Anderson, Mandy M. Cheng, and Yee Shih Phua
- Subjects
Economics and Econometrics ,Accounting ,Finance - Abstract
We investigate whether prior collaboration experience affects a focal partner's response to the precision of monitoring controls adopted by a new partner, with consequences for their goodwill trust in, and subsequent cooperation with, the new partner. We expect the partner to interpret their new partner's adoption of precise monitoring controls as either an effort to limit their autonomy or to reduce information asymmetry. The partner's experience with past partners is posited to determine which interpretation is salient, with negative (positive) experiences favoring the former (latter). We find that partners with an uncooperative (cooperative) experience exhibit lower (higher) goodwill trust in the new partner when controls are more precise. Further, prior experience moderates the indirect relation between the precision of monitoring controls and partner cooperation acting through goodwill trust. The results demonstrate the importance of prior experiences in the design of interfirm controls for current partner relationships. Data Availability: Contact the authors. JEL Classifications: M41.
- Published
- 2021
3. Reducing Strategy Surrogation: The Effects of Performance Measurement System Flexibility and Environmental Dynamism
- Author
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Kelly K Wang, Mandy M Cheng, and Linda J Chang
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Economics and Econometrics ,Accounting ,Finance - Abstract
Prior research shows that individuals exhibit a propensity to surrogate performance measures for their underlying strategy, resulting in suboptimal strategic decisions. We investigate whether the incorporation of flexibility in contemporary performance measurement systems (PMS) reduces surrogation propensity in the context of product innovation and whether this effect varies depending on environmental dynamism. We conduct a 2x2 experiment and find that PMS flexibility significantly lowers managers’ surrogation propensity, but this occurs only when the business environment is more dynamic and when the investment decisions have opportunity costs. Our study contributes to the literature by identifying a viable way to reduce managers’ surrogation propensity.
- Published
- 2022
4. The effect of mood and information sequence on third party evaluation of escalating capital investment projects
- Author
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Chang-Yuan Loh, Mandy M. Cheng, and Rodney Coyte
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Information Systems and Management ,Accounting ,Finance - Published
- 2023
5. Is a fresh pair of eyes always better? The effect of consultant type and assigned task purpose on communicating project escalation concerns
- Author
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Rodney Coyte, Mandy M. Cheng, and Chang-Yuan Loh
- Subjects
Information Systems and Management ,Third party ,business.industry ,Accounting ,Top management ,Public relations ,Willingness to communicate ,business ,Escalation of commitment ,Finance ,Management control system ,Project manager ,Task (project management) - Abstract
Prior research suggests that the use of third party (independent) consultants to review on-going projects is an effective way to recognize and prevent escalation of commitment. This study uses an experiment to investigate whether the type of consultant (internal or external) and the stated purpose of the task assigned to the consultant influences willingness to communicate concerns about a project manager’s decision to escalate an unprofitable project to top management. We find that explicitly asking internal consultants to communicate concerns reduces both their tendency to disagree with the project manager’s escalation decision and their willingness to communicate their concerns. In contrast, external consultants’ willingness to communicate escalation concerns is not affected by the stated purpose of their assigned task. Our findings have implications for organizations seeking to engage consultants as part of their management control to prevent project escalation.
- Published
- 2019
6. Materiality judgments in an integrated reporting setting: The effect of strategic relevance and strategy map
- Author
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Mandy M. Cheng and Wendy Green
- Subjects
Organizational Behavior and Human Resource Management ,Materiality (auditing) ,Information Systems and Management ,Sociology and Political Science ,business.industry ,05 social sciences ,Accounting ,050201 accounting ,Audit ,Integrated reporting ,0502 economics and business ,Mainstream ,business ,050203 business & management ,Strategy map - Abstract
This study reports an experiment conducted to examine auditors' materiality judgments for nonfinancial performance information (NFPI) in the context of Integrated Reporting; a setting where auditors do not have well-established guidelines or benchmarks. We examine two fundamental factors underlying Integrated Reporting that are predicted to influence auditors' NFPI materiality judgments, namely, the level of strategic relevance associated with the NFPI being assessed, and the provision of a strategy map (a visual representation of linkages between the firm's strategic objectives) to auditors. Our study provides evidence that while auditors judge misstated NFPI of low strategic relevance to be less material than misstated NFPI with high strategic relevance, they only make this distinction when a strategy map is present. As integrating a client's strategy in the process of evaluating materiality is important, our result suggests that the presence of a strategy map potentially improves the efficient allocation of assurance resources. The importance of understanding how qualitative factors affect materiality judgments in nonfinancial assurance engagements is reflected in the fact that accounting firms view such assurance as mainstream. Our findings not only have implications for standard setters developing further guidance for determining audit materiality under Integrated Reporting, but also more generally for auditors who are providing assurance services for NFPI.
- Published
- 2019
7. The interplay between strategic risk profiles and presentation format on managers' strategic judgments using the balanced scorecard
- Author
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Kerry A. Humphreys, Yichelle Y. Zhang, and Mandy M. Cheng
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Strategic planning ,Organizational Behavior and Human Resource Management ,Evaluation strategy ,Information Systems and Management ,Knowledge management ,Balanced scorecard ,Sociology and Political Science ,business.industry ,Strategic alignment ,05 social sciences ,050201 accounting ,050105 experimental psychology ,Accounting ,0502 economics and business ,Strategic control ,Management system ,0501 psychology and cognitive sciences ,business ,Risk assessment ,Strategy map - Abstract
Managers are increasingly aware that strategic judgments need to be made in the context of risk assessments. It has been proposed that strategic performance management systems, such as the balanced scorecard (BSC), offer a useful framework for integrating strategic risk and performance information to provide managers with a more comprehensive overview of their strategy. In this study, we conduct an experiment to investigate whether integrating strategic risk information in a BSC affects managers' responses to different strategic risk profiles when making strategy evaluation and recommendation judgments. Specifically, we provide strategic risk information either as a stand-alone list (a stand-alone approach), or incorporated in a BSC (an integrated approach). We also vary the risk profile of the strategy provided, by manipulating whether the strategy has relatively higher risks associated with performance drivers (high performance driver risks) or relatively higher risks associated with performance outcomes (high performance outcome risks). Our results show that managers make less favorable strategy evaluation and recommendation judgments with high performance driver risks than with high performance outcome risks when strategic risk information is integrated in a BSC, but not when the strategic risks are presented as a stand-alone list. While we find a significant difference in strategic risk profile effects between the two presentation formats for strategy recommendation judgments, this difference is not significant for strategy evaluation judgments. Overall, our study shows that how organizations choose to combine the reporting of strategic risk and performance information is important for managers making strategic judgments.
- Published
- 2018
8. The Impact of the Timing of a Prior Year's Auditor Concessions on Financial Officers' Judgments
- Author
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Hun-Tong Tan, Ken T. Trotman, Aileen Tse, Mandy M. Cheng, and Nanyang Business School
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Finance ,Economics and Econometrics ,050208 finance ,business.industry ,media_common.quotation_subject ,Finance [Business] ,05 social sciences ,Accounting ,050201 accounting ,Audit ,Auditor-client Negotiations ,Negotiation ,Negotiation Strategy ,0502 economics and business ,business ,Financial statement ,media_common - Abstract
SUMMARY Auditors and clients negotiate on financial statement numbers over time. In this study, we extend the existing literature on auditor-client negotiations by examining the judgments of client financial officers in a multi-period setting. We conduct an experiment to examine how an auditor's use of concession-timing strategies in the prior year influences financial officers' negotiation judgments in the current year. We find that financial officers report a larger expected ultimate income-decreasing audit adjustment and are prepared to offer more concessions if the auditor had previously used a concession-start strategy (where the auditor had given a concession before the start of the negotiation but did not concede during the negotiation) relative to a concession-end strategy (where the concession was provided only in the last round of negotiation). Our results indicate that auditors' prior negotiation strategies impact financial officers' use of strategies on current year's negotiations. Overall, these results suggest that findings in earlier single-period settings (e.g., Tan and Trotman 2010) potentially reverse in a multi-period setting.
- Published
- 2016
9. Managing strategic uncertainty
- Author
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Kerry A. Humphreys and Mandy M. Cheng
- Subjects
Strategic planning ,Balanced scorecard ,Process management ,Strategic alignment ,business.industry ,05 social sciences ,Environmental resource management ,050201 accounting ,Profit impact of marketing strategy ,General Business, Management and Accounting ,Strategic business unit ,Accounting ,0502 economics and business ,Strategic control ,Performance measurement ,Business ,General Economics, Econometrics and Finance ,050203 business & management ,Strategic financial management - Abstract
Purpose Strategic uncertainty from emerging threats and opportunities in the business environment can significantly impact managers’ abilities to successfully implement their business strategy. A key strategic control and governance mechanism designed to enable managers to respond to strategic uncertainty is a strategic performance measurement system, such as the balanced scorecard (BSC). This study aims to investigate whether strategic uncertainty is associated with the diversity and types of performance measures in a BSC, which are used by managers for various strategic control and governance purposes. Design/methodology/approach A survey of senior-level managers within strategic business units of Australian Stock Exchange listed organizations was conducted. Findings This study finds that the extent to which managers face strategic uncertainty is positively associated with performance measurement diversity. Further, managers faced with greater strategic uncertainty use performance measures relatively more to evaluate subordinates’ performance, communicate business strategy, track performance against targets, identify problem areas and guide future directions. Outcome measures are used to a greater extent for all five purposes, whereas leading measures are used more only for future-oriented purposes. Practical implications Strategic performance measurement systems, such as the BSC, can and are being used to provide managers with the information and control mechanisms necessary to meet the challenges associated with strategic uncertainty. Originality/value This study provides the first evidence on the relations between strategic uncertainty, performance measurement diversity and managers’ use of performance measures for five key purposes. Understanding these relations is important, as managers need to formulate appropriate responses to strategic uncertainty, to protect and create value by exploiting emerging opportunities and managing associated threats.
- Published
- 2016
10. Does Self-Certification Encourage or Reduce Opportunistic Behavior?
- Author
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Mandy M. Cheng and Nicole Ang
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Organizational Behavior and Human Resource Management ,Capital investment ,05 social sciences ,Control (management) ,050201 accounting ,Certification ,Microeconomics ,Accounting ,Bounded function ,0502 economics and business ,Opportunism ,Operations management ,Business ,050203 business & management ,Sign (mathematics) - Abstract
We experimentally investigate the effectiveness of a self-certification requirement as an informal control to reduce opportunistic behavior. We predict and find that a requirement that managers sign to take sole responsibility for their decisions—even though the decision is kept private—acts as a “double-edged sword.” Using a capital investment setting involving two decision stages, we find that self-certifying managers are less likely to behave opportunistically at the first stage. However, at the second stage, managers are more likely to behave opportunistically if they previously self-certified an opportunistic decision. Additional analysis indicates that a monitoring-based control removes the effectiveness of self-certification altogether. Overall, we find that the effectiveness of a self-certification requirement in reducing opportunistic behavior is bounded by its timing and the presence of other controls; it is potentially useful when managers are making a first decision, and only in the absence of a formal monitoring system. Data Availability: Data available upon request. Please contact the authors.
- Published
- 2016
11. The effects of incentive subjectivity and strategy communication on knowledge-sharing and extra-role behaviours
- Author
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Rodney Coyte and Mandy M. Cheng
- Subjects
Microeconomics ,Value (ethics) ,Information Systems and Management ,Incentive ,Performance management ,Accounting ,Performance measurement ,Business ,Empirical evidence ,Finance ,Strategy map ,Weighting ,Knowledge sharing - Abstract
This study examines the effects of performance measurement system design on employees’ willingness to share knowledge and their general tendency to pursue extra-role behaviours. Two key design issues are examined, namely, incentive scheme subjectivity and communicating the value of human-based intangible assets through a strategy map. Using a controlled experiment we found that employees are more willing to share knowledge with a co-worker (even if it means diverting resources away from incentivised areas) under a subjective weighting scheme than a formula-based scheme. In addition, we found an interaction effect where the communication of the strategic value of human-based intangible assets increases employees’ general tendency to pursue extra-role behaviours under a subjective weighting scheme, but decreases this tendency under a formula-based scheme. Our study contributes to the performance management literature and has implications for practice by providing empirical evidence demonstrating how the design of performance measurement systems can motivate discretionary behaviours in relation to performance areas that are not recognised by the formal incentive scheme.
- Published
- 2014
12. The Impact of Strategic Relevance and Assurance of Sustainability Indicators on Investors' Decisions
- Author
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Mandy M. Cheng, Wendy Green, and John Chi Wa Ko
- Subjects
Economics and Econometrics ,Strategic alignment ,business.industry ,Corporate governance ,Accounting ,Company strategy ,Audit ,Investment decisions ,Cost leadership ,Sustainability ,Relevance (information retrieval) ,Business ,Finance - Abstract
SUMMARY In this study, we report two 2 × 2 between-subjects experiments that investigate the effect of strategic relevance of reported sustainability information and its assurance on nonprofessional investors' investment decisions. The first experiment manipulates strategic relevance of reported environmental, social, and governance (ESG) indicators between “high” and “low” by varying the company strategy (sustainability-based differentiation strategy versus cost leadership strategy unrelated to sustainability). The second experiment manipulates the strategic alignment of the ESG indicators (holding strategy constant). We also manipulate the presence (absence) of assurance in both experiments. Results from both experiments document that investors perceive ESG indicators to be more important, and are more willing to invest in the company if ESG indicators have higher strategic relevance. Experiment one also provides evidence that assurance increases investors' willingness to invest to a greater extent when ESG indicators have high relevance to the company strategy. Our findings suggest that the assurance of ESG indicators has a beneficial signaling role in communicating the importance of this reported information to investors.
- Published
- 2014
13. The International Integrated Reporting Framework: Key Issues and Future Research Opportunities
- Author
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Pieter J. Conradie, Andrea M. Romi, Mandy M. Cheng, Wendy Green, and Noriyuki Konishi
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Process management ,International accounting ,Accounting ,Political science ,Business, Management and Accounting (miscellaneous) ,Accounting education ,Research opportunities ,Integrated reporting ,Key issues ,Finance ,Management - Abstract
This paper has three main aims. First, the paper introduces the concept of integrated reporting ( ) as described by the International Integrated Reporting Council (IIRC). A background to the development of the concept over the 4-year period from the inception of the IIRC in 2010 is provided, culminating in the release by the IIRC of a Consultation Draft (CD) of the framework in March 2013. Second, the paper discusses key issues currently being debated relating to the CD that the IIRC will need to resolve prior to the expected release of their framework in late 2013. This discussion is based on issues identified and reported to the IIRC by a subcommittee of the International Association for Accounting Education and Research (IAAER) comprised of international accounting academics. Finally, the paper identifies a range of potential research issues relating to the development and implementation of .
- Published
- 2014
14. The effect of outcome and process accountability on customer–supplier negotiations
- Author
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Ken T. Trotman, Mandy M. Cheng, and Linda J. Chang
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Organizational Behavior and Human Resource Management ,Information Systems and Management ,Sociology and Political Science ,Process (engineering) ,business.industry ,media_common.quotation_subject ,Public relations ,Outcome (game theory) ,Microeconomics ,Negotiation ,Accounting ,Accountability ,business ,media_common - Abstract
Prior studies on customer–supplier negotiations ( Drake and Haka, 2008 , Van den Abbeele et al., 2009 ) find that negotiators who have access to relevant activity-based cost information are not always able to use this information to improve joint outcomes. Our study extends this literature by examining how the type of accountability (process and outcome accountability) influences the extent to which negotiators can obtain lower joint costs. We hypothesize and test a model that predicts that the type of accountability affects negotiated outcomes through its effect on negotiators’ fixed-pie bias revisions and the negotiation tactics they employ during customer-supplier negotiations. Results from an experiment show that negotiators held accountable for their negotiation processes are better able to reduce their fixed-pie biases and achieve lower joint costs compared to those who are held accountable for their negotiation outcomes. Using rich data based on taped negotiations, we demonstrate that the effect of accountability on joint costs is indirect through its effect on negotiators’ choice of negotiation tactics and the extent to which negotiators can reduce their fixed-pie biases.
- Published
- 2013
15. The Effect of Managers' Enabling Perceptions on Costing System Use, Psychological Empowerment, and Task Performance
- Author
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Habib Mahama and Mandy M. Cheng
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Organizational Behavior and Human Resource Management ,media_common.quotation_subject ,Applied psychology ,Psychological empowerment ,System use ,Accounting ,Perception ,Positive relationship ,Indirect impact ,Psychology ,Activity-based costing ,Competence (human resources) ,Social psychology ,media_common - Abstract
This study investigates whether and how managers' enabling perceptions of their costing systems affect task performance. We propose that managers who perceive their costing system as more enabling will have higher levels of task performance, and that this relationship occurs through the intensity with which the costing system is used and the level of psychological empowerment experienced by the managers. To test these propositions, we conduct a survey of middle-level managers and analyze the responses using a PLS model. Our results generally support our propositions. Specifically, we find a positive relationship between managers' enabling perceptions and the intensity with which the costing system is used. The intensity of use is further associated with all four dimensions of psychological empowerment (meaning, competence, self-determination, and impact). Finally, the intensity of use also has an indirect impact on task performance via the competence dimension of psychological empowerment. The present study extends prior research on costing systems, and adds to our understanding of the role managers' perceptions play in improving costing system effectiveness. Data Availability: Data available upon request.
- Published
- 2012
16. The Differential Improvement Effects of the Strategy Map and Scorecard Perspectives on Managers' Strategic Judgments
- Author
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Mandy M. Cheng and Kerry A. Humphreys
- Subjects
Strategic planning ,Economics and Econometrics ,Balanced scorecard ,Process management ,Accounting ,Key (cryptography) ,Differential (mechanical device) ,Business ,Finance ,Strategy map ,Management - Abstract
This study examines the effect that two key balanced scorecard (BSC) framework elements—causal linkages between strategic objectives in the strategy map and performance measures categorized by scorecard perspective—have on managers' ability to interpret the strategic relevance of external information and use this information to evaluate the appropriateness of an organization's strategy. We conduct two experiments, finding that presenting a set of strategic objectives as a strategy map enhances both managers' information relevance and strategy appropriateness judgments. We attribute this improvement to the explication of causal linkages between objectives in a strategy map. In contrast, presenting performance measures categorized by scorecard perspective only improves managers' strategy appropriateness judgments when the managers are provided with a set of strategic objectives that are not presented in a strategy map structure. Our study contributes to the literature by demonstrating that these two elements of the BSC framework have differential decision-facilitating impacts on managers' strategic judgments. Data Availability: Data are available from the authors upon request.
- Published
- 2012
17. The impact of capital proposal guidelines and perceived preparer biases on reviewers’ investment evaluation decisions
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Habib Mahama and Mandy M. Cheng
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Incentive ,business.industry ,Capital (economics) ,Accounting ,Investment (macroeconomics) ,business ,General Business, Management and Accounting ,Investment evaluation - Abstract
Past literature has highlighted the importance of using reviewers in the evaluation of investment proposals. This study examines whether and how the decisions of these reviewers are influenced by a proposal’s conformance with company guidelines and practices, and the incentives facing the proposal preparer. Our experiment shows that, holding the proposal’s content constant, the reviewers’ evaluation decision is less favourable if the proposal does not follow the company guidelines. Further, we find that the preparer’s incentive to persist in a project negatively affects the proposal reviewers’ decisions only when the proposal deviates from company guidelines but not when it is compliant. This result suggests that company guidelines may lower the willingness of reviewers to make independent decisions.
- Published
- 2011
18. The Employment Landscape for Accounting Graduates and Work Experience Relevance
- Author
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Helen Kang, Mandy M. Cheng, Peter Roebuck, and Roger Simnett
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ComputingMilieux_THECOMPUTINGPROFESSION ,business.industry ,education ,Accounting ,Affect (psychology) ,Work experience ,Business economics ,Work (electrical) ,ComputingMilieux_COMPUTERSANDEDUCATION ,Relevance (information retrieval) ,Psychology ,business ,Graduation - Abstract
This study outlines the results of a survey undertaken at an Australian university in 2007 and examines the factors that are associated with an undergraduate accounting student obtaining a job offer. Undertaking relevant part-time work, academic performance and social (extra-curricular) activities are significant factors leading to job offers prior to graduation. Our study also identifies a high level of part-time work currently undertaken by full-time students, confirming the trend identified in other studies. Interestingly, this high level of part-time work was not found to negatively affect students’ academic performance.
- Published
- 2009
19. Transfer Price Negotiation in the Presence of Unequal Bargaining Power: The Effect of a Peer Evaluation Scheme on Inter-divisional Profit Distribution
- Author
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Mandy M. Cheng and Cathy Hsieh
- Subjects
Microeconomics ,Negotiation ,Bargaining power ,Incentive ,Accounting ,media_common.quotation_subject ,Economics ,Profit (economics) ,Industrial organization ,Profit distribution ,Peer evaluation ,media_common - Abstract
This study examines how managers balance economic incentives and inter-divisional equity considerations during transfer price negotiations. Our experiment shows that both buyers and sellers are willing to give up a significant amount of their profits to pursue a more equitable outcome (one that results in greater inter-divisional profit equalisation). We also find that incorporating peer evaluation schemes into negotiators' formal incentive plans has both economic and social-psychological impacts on negotiation behaviour, resulting in even greater inter-divisional profit equalisation. While this outcome may seem ‘fairer’ to the individual managers, from the firms' perspective profit equalisation can obscure divisional performance, potentially leading to resource allocation inefficiencies.
- Published
- 2009
20. The effect of framing and negotiation partner’s objective on judgments about negotiated transfer prices
- Author
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Linda Chang, Mandy M. Cheng, and Ken T. Trotman
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Organizational Behavior and Human Resource Management ,Information Systems and Management ,Sociology and Political Science ,business.industry ,media_common.quotation_subject ,Accounting ,Loss frame ,Microeconomics ,Negotiation ,Framing (social sciences) ,Perception ,Accounting information system ,Management accounting ,Economics ,Market price ,Social consequence ,business ,media_common - Abstract
A common approach to set transfer prices is via intra-firm negotiation. However, Luft and Libby [Luft, J. L., & Libby, R. (1997). Profit comparisons, market prices and managers’ judgments about negotiated transfer prices. The Accounting Review , 72 (2), 217–229] found that because of the existence of self-serving biases, negotiating managers have different expectations regarding what constitutes a ‘fair’ transfer price, leading to a less efficient negotiation process. In this study, we examine two factors that are expected to affect managers’ transfer price negotiation judgments, namely, framing as a gain or as a loss and the negotiation partner’s objective (whether the partner’s objective involves high or low concern-for-others). We propose that these two factors affect managers’ perceptions of the negotiation context, and thus the way they interpret the economic and social consequences of accounting information. Our results show that a loss frame (compared to a gain frame) exacerbates managers’ self-serving biases and increases the ‘transfer price expectation gap’ between buyers and sellers. Further, in our experiment where market price is higher than equal-profit price, we find that managers’ transfer price expectations are lower (and deviate more from the prevailing market price) when they are negotiating with a partner with high concern-for-others than with a partner with low concern-for-others. We discuss the broader implications of these results for the design of management accounting systems.
- Published
- 2008
21. Effect of perceived conflict among multiple performance goals and goal difficulty on task performance
- Author
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Habib Mahama, Mandy M. Cheng, and Peter F. Luckett
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Research literature ,Balanced scorecard ,Goal orientation ,Accounting ,Economics, Econometrics and Finance (miscellaneous) ,Applied psychology ,Survey data collection ,Goal conflict ,Performance measurement ,Psychology ,Inclusion (education) ,Finance ,Task (project management) - Abstract
Contemporary performance measurement systems, such as the balanced scorecard, often advocate the use of an array of financial and non-financial measures. Despite many claimed advantages for these systems, recent research shows that the inclusion of multiple performance measures sometimes has undesirable effects. The present study examines one of the potential problems of implementing these systems; namely, the impact of perceived goal conflict on task performance. Using survey data from employees working in multiple call centres in a telecommunication company, we find that perceived goal difficulty increases perceived goal conflict. Additionally, perceived goal difficulty also has a negative, indirect effect of task performance, through the mediating role of perceived goal conflict. Our results have important implications for both the research literature and the designers of performance measurement systems.
- Published
- 2007
22. Corporate Governance and Board Composition: diversity and independence of Australian boards
- Author
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Sidney J. Gray, Helen Kang, and Mandy M. Cheng
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business.industry ,Strategy and Management ,Corporate governance ,Accounting ,General Business, Management and Accounting ,Corporation ,Empirical research ,Shareholder ,Management of Technology and Innovation ,Cultural diversity ,Corporate law ,Business ,Capital market ,Stock (geology) - Abstract
The board of directors is one of a number of internal governance mechanisms that are intended to ensure that the interests of shareholders and managers are closely aligned, and to discipline or remove ineffective management teams. Among the most significant governance issues currently faced by the modern corporation are those relating to diversity, such as gender and age, and independence of directors. While board diversity and independence has been a growing area of research in recent years, most empirical research on this topic has been restricted to US data. The generalisability of such findings may not extend across national boundaries due to different regulatory and economic environments, cultural differences, the size of capital markets and the effectiveness of governance mechanisms. Consequently, the importance and value of various governance structures, including board diversity and independence, should be separately examined in each country, and the influential factors investigated. This study reports on the diversity and independence of the board membership of 100 top Australian companies in 2003. Australia has one of the most developed stock markets in the Asia-Pacific region. With the collapse of several well-known public companies such as Ansett, OneTel and HIH, there is an increasing demand to evaluate the corporate governance practices of Australian companies, including the composition of boards. Accordingly, this research provides a timely review of the state of corporate governance in Australia so far as board composition is concerned.
- Published
- 2007
23. The Effects of Cognitive Style Diversity on Decision-Making Dyads: An Empirical Analysis in the Context of a Complex Task
- Author
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Peter F. Luckett, Mandy M. Cheng, and Axel Klaus-Dieter Schulz
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Organizational Behavior and Human Resource Management ,media_common.quotation_subject ,Cognitive Information Processing ,Decision quality ,Context (language use) ,Task (project management) ,Accounting ,Perception ,Accounting information system ,Psychology ,Social psychology ,media_common ,Cognitive psychology ,Cognitive style ,Dyad - Abstract
Some research has suggested multiple-format accounting feedback in an attempt to accommodate varying cognitive information processing styles (Gardner and Martinko 1996). This costly information solution, however, has not been widely adopted in practice. An alternative approach, which fits nicely with current team-orientation practices in the work place, is to create combinations of workers. These work groups can bring to bear varying cognitive styles in solving complex business problems using accounting information. This study explores how cognitive style diversity affects the decision quality performance of dyads for a complex decision task. An experiment was performed to extend prior accounting studies into perception differences based on the sensor/intuitive dimension of the MBTI (Myers-Briggs Type Indicator) instrument, and how such differences affect users of performance reports in their decision-making processes. In this study, subjects were classified into sensor or intuitive dyad members, based on the Myers-Briggs MBTI instrument, and engaged in a task that involved a series of simulated production decisions with nonfinancial direct performance feedback. After controlling for task conflict, results showed significantly better decision performance for cognitively diverse dyads over homogeneous sensor dyads. Similar performance differences, however, were not observed between cognitively diverse dyads and homogeneous intuitive dyads. Task conflict was not significant in explaining differences in decision performance. The findings could have implications in the areas of management control system design and personnel management.
- Published
- 2003
24. The Effects of Hurdle Rates on the Level of Escalation of Commitment in Capital Budgeting
- Author
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Axel Klaus-Dieter Schulz, Peter F. Luckett, Peter Booth, and Mandy M. Cheng
- Subjects
Investment portfolio ,Finance ,Capital budgeting ,Organizational Behavior and Human Resource Management ,Average return ,Actuarial science ,business.industry ,Accounting ,Cost escalation ,Control (management) ,Control system design ,business ,Escalation of commitment - Abstract
This study proposes that organizations should consider project hurdle rates, as part of their control system design, to reduce escalation of commitment behavior in managers. In particular, we empirically examined the escalation of commitment tendencies in managers receiving organization-set, self-set, and no hurdle rates.Consistent with prior expectations, we found self-set hurdle rates to be an effective control mechanism resulting in significantly lower levels of escalation of commitment. Contrary to expectations, however, organization-set hurdle rates were not effective. Self-set hurdle rates also resulted in significantly higher cut-off rates compared to the average return of the investment portfolio held by the managers.As escalation of commitment has been recognized as a serious potential problem in organizations, the use of self-set hurdle rates is a step toward reducing the level of escalation tendencies in managers.
- Published
- 2003
25. Persistence in capital budgeting reinvestment decisions - personal responsibility antecedent and information asymmetry moderator: A note
- Author
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Axel Klaus-Dieter Schulz and Mandy M. Cheng
- Subjects
Capital budgeting ,Information asymmetry ,Antecedent (logic) ,Accounting ,Antecedent variable ,Economics, Econometrics and Finance (miscellaneous) ,Moral responsibility ,Construct (philosophy) ,Moderation ,Psychology ,Escalation of commitment ,Social psychology ,Finance - Abstract
In this study we examine the effects of personal responsibility and information asymmetry on managers’ tendencies to escalate their commitment to poorly performing investment projects. Consistent with the recommendations by critics of the escalation literature (e.g. Bowen, 1987), we provided subjects with unequivocal negative project feedback. However, counter to other recent conflicting studies adopting Bowen’s recommendations, we reverted back to Staw’s (1976) original methodology and incorporated “free-choice” into our personal responsibility construct. Our results confirm Staw’s (1976) original proposition of a positive relation between a manager’s personal responsibility for a poorly performing project and his/her subsequent escalation of commitment to the project. Further, we proposed that information asymmetry moderates the relation between the level of personal responsibility and escalation of commitment. Our results did not confirm this proposition. As such, results from our study re-establish personal responsibility as an important antecedent variable to escalation of commitment.
- Published
- 2002
26. Strategic Performance Measurement Systems and Managerial Judgements
- Author
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Mandy M. Cheng
- Subjects
Knowledge management ,Balanced scorecard ,business.industry ,Strategic business unit ,System of measurement ,Pyramid ,Systems design ,Performance measurement ,Strategic performance ,business ,Value chain - Abstract
The introduction of the Balanced Scorecard (BSC) by Kaplan and Norton in the early 1990s has put performance measurement system design firmly on many executives’ agendas. A 2009 Bain & Co. survey of 1,430 international executives reported that the BSC ranks sixth among 25 popular management tools, with a global adoption rate of 53 per cent (Rigby and Bilodeau, 2009). Contemporary performance measurement systems (often referred to as strategic performance measurement systems), such as the BSC, have a number of distinguishing features. In particular, these systems: (1) contain a diverse range of performance measures that reflect the organisation’s key strategic areas, and (2) illustrate the cause-and-effect linkages between operations, strategy and goals, and between various aspects of the value chain (Chenhall, 2005). Many professional and academic articles have been published on the benefits, design and implementation processes associated with various types of strategic performance measurement systems (e.g., the BSC, Tableu de bord, and the performance pyramid). The aim of this chapter is not to add to the extant literature comparing the merits of different performance measurement frameworks; rather, it takes a different, ‘behavioural’ perspective by focusing on how the design features of strategic performance measurement systems influence individual managers’ judgements.
- Published
- 2014
27. The Impact of Supplier Selection and Suppliers’ Information Sharing Behavior on Initial Trust, Controls and Collaboration
- Author
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Shannon W. Anderson, Fern Chang, Mandy M. Cheng, and Yee Shih Phua
- Published
- 2012
28. Knowledge transfer in project reviews: The effect of self-justification bias and moral hazard
- Author
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Peter Booth, Axel Klaus-Dieter Schulz, and Mandy M. Cheng
- Subjects
Self-justification ,Moral hazard ,business.industry ,Economics, Econometrics and Finance (miscellaneous) ,Principal–agent problem ,Public relations ,Capital budgeting ,Accounting ,Cognitive dissonance ,Economics ,Moral responsibility ,business ,Private information retrieval ,Knowledge transfer ,Finance - Abstract
In this study, we examine two factors that impact managers' willingness to share private information during the project review stage of capital budgeting. Drawing on the cognitive dissonance theory and the agency theory, we find that both high perceived personal responsibility and the use of project reviews for performance evaluation result in a greater tendency for managers to withhold negative private information. However, we do not find an interaction between these two factors. Our study makes a contribution to both the academic literature investigating factors affecting project reviews and the practitioner literature looking at design and implementation of effective project reviews. © 2009 AFAANZ.
- Published
- 2009
29. Improving Managerial Judgments of Information Relevance and Strategy Appropriateness Using the BSC and the Strategy Map
- Author
-
Kerry A. Humphreys and Mandy M. Cheng
- Subjects
Evaluation strategy ,Knowledge management ,Balanced scorecard ,Computer science ,business.industry ,Key (cryptography) ,Relevance (information retrieval) ,Cognition ,Set (psychology) ,Construct (philosophy) ,business ,Strategy map - Abstract
The balanced scorecard (BSC) framework is designed to facilitate a shared understanding of a firm's 'theory of business' among its employees (Kaplan and Norton 1996). While prior literature has examined extensively the use of the BSC as a performance evaluation tool, few studies have focused on its broader decision-facilitating role as a result of the shared understanding it develops. In this study, we examine the effect of the two key elements of the BSC framework, the strategy map and the BSC, in improving managers' ability to interpret the strategic relevance of external information, and the strategy evaluation judgments they make in light of this information. We hypothesize that these two elements, which correspond to the two components of integrative strategic performance measurement systems (Chenhall 2005a), allow managers to construct cognitive representations of their firm's strategy, and therefore improve their ability to use external information relating to their firm's business environment to make strategy evaluation judgments. We conducted a laboratory experiment to test our research propositions. Our results show that presenting a set of strategic objectives as a strategy map enhanced managers' ability to distinguish between relevant and irrelevant external information, and improved their ability to use the relevant information to make strategy evaluation judgments. In contrast, the presentation of a set of performance measures as a BSC only had a positive effect on managers' strategy evaluation judgments, but not their ability to recognize the strategic relevance of external information. Further, we show that because the strategy map is more effective than the BSC in improving managers' strategy evaluation judgments, the BSC acts as a partial substitute to the strategy map, such that the BSC only improved managers' strategy evaluation judgment in the absence of a strategy map. Our study contributes to the literature by providing evidence that the BSC framework serves a critical decision-facilitating role in improving managerial judgments. The findings also have implications on how strategic performance measurement systems can aid managers in scanning and evaluating external environmental signals - a key challenge faced by managers in the contemporary business environment.
- Published
- 2008
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