Performance Measures and Intra-Firm Spillovers: Theory and Evidence

Bouwens, Jan; Hofmann, Christian und Lent, Laurence van (2018): Performance Measures and Intra-Firm Spillovers: Theory and Evidence. In: Journal of Management Accounting Research, Bd. 30, Nr. 3: S. 117-144

Abstract

We revisit the question of how performance measures are used to evaluate business unit managers in response to intra-firm spillovers. Specifically, we are interested in variation in the relative incentive weightings of aggregated "above-level" measures (e.g., firm-wide net income), "own-level" business unit measures (e.g., business unit profit), and specific "below-level" measures (e.g., R&D expenses) in response to spillover arising from either the focal unit's effect on other business units or the other units' effect on the focal unit. Our theory highlights complementarity between above- and below-level measures and the existence of an interaction between the two directions of spillovers. Based on a survey of 122 business unit managers, we report evidence consistent with an interaction effect and with complementarity between above- and below-level measures. In particular, we show that firms increase the weighting on both above- and below-level measures when they are coping simultaneously with high levels of spillovers on other units and spillovers from other units.

• Dokumententyp: Zeitschriftenartikel
• Fakultät: Betriebswirtschaft > Institut für Unternehmensrechnung und Controlling
• Themengebiete: 300 Sozialwissenschaften > 330 Wirtschaft
• ISSN: 1049-2127
• Sprache: Englisch