ABSTRACTCross-border alliances expose firms to heightened risks, posing different governance and control challenges than domestic alliances. We examine the impact of differences in alliance partner countries' institutional... more
ABSTRACTCross-border alliances expose firms to heightened risks, posing different governance and control challenges than domestic alliances. We examine the impact of differences in alliance partner countries' institutional environments. Analysis of survey data supports our contention that cross-border alliances involve a greater reliance on formal controls, particularly when firms collaborate with partners in countries with a weaker institutional environment. These relations exist regardless of governance structure (i.e., equity or non-equity alliance) that prior research considers a critical choice for addressing cross-border alliance risks. Additional analyses show that four subdimensions of institutional characteristics (voice and accountability, regulatory quality, rule of law, and control of corruption) and one subdimension of formal controls (behavior controls) are the main drivers in the association between institutional distance and reliance on formal controls. These fin...
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ABSTRACTWe examine how firms' management accounting information influences interfirm contract design. We theorize that comprehensive accounting information enables firms to design more complete contracts with suppliers, as indicated... more
ABSTRACTWe examine how firms' management accounting information influences interfirm contract design. We theorize that comprehensive accounting information enables firms to design more complete contracts with suppliers, as indicated by increased issue inclusiveness and clause specificity. Survey data of Japanese manufacturing firms about the management of supplier relationships support the expectation that comprehensive management accounting information enables the development of more inclusive and specific contracts with suppliers. These contracts are also less subject to additional informal agreements between exchange partners. These results are consistent with the idea that better accounting information enables more complete contracting.
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Samenvatting belangrijkste resultaten De afgelopen jaren heeft de ACM via het ‘thema Haven’ extra aandacht gegeven aan toezicht op concurrentie in de haven. In 2016 heeft een onderzoek plaatsgevonden om de situatie voorafgaand aan het... more
Samenvatting belangrijkste resultaten De afgelopen jaren heeft de ACM via het ‘thema Haven’ extra aandacht gegeven aan toezicht op concurrentie in de haven. In 2016 heeft een onderzoek plaatsgevonden om de situatie voorafgaand aan het thema te meten. Het huidige rapport geeft de resultaten weer van een replicatie van het onderzoek in 2016 om zodoende de situatie in 2019 in kaart te brengen. De resultaten van dit rapport geven inzicht in: (1) veranderingen in de neiging tot concurrentievervalsing ten opzichte van 2016, (2) de invloed van het door ACM uitgevoerde ‘thema Haven’, en (3) factoren die bijdragen aan het verklaren van de neiging tot concurrentievervalsing in 2019. De resultaten van het onderzoek duiden op weinig verandering in de neiging tot concurrentievervalsing in 2019 ten opzichte van 2016. De resultaten in 2019 laten zien dat het risico op concurrentievervalsing voor bedrijven binnen de havengebieden en daarbuiten ongeveer gelijk is. Ook het kennisniveau ten aanzien va...
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This paper reports the results of a survey study among Dutch listed manufacturing companies on the adoption and use of costing practices that resemble the Japanese target costing concepts. Twenty-two of thirty-two responding firms claimed... more
This paper reports the results of a survey study among Dutch listed manufacturing companies on the adoption and use of costing practices that resemble the Japanese target costing concepts. Twenty-two of thirty-two responding firms claimed to use costing practices similar to target costing. The distribution of adoption over industries confirmed the expectation that assembling firms show a relatively high adoption of target costing. The adoption of these techniques appears to be related to an intense competitive and unpredictable enviromnent. Similar to target costing studies in Japan and Germany, the main objective for adopting these techniques in the sample is to reduce costs. The product development and design departments appear to be leading in the target cost management process, while the accounting department is only moderately involved. Finally, the most frequently adopted organizational form for target cost management are team structures, in which multiple functions combine kn...
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We draw on a five-year longitudinal data set to investigate the influence of performance measurement in the processual dynamics of strategic change, particularly in enacting effective strategic change. Our model examines the role of... more
We draw on a five-year longitudinal data set to investigate the influence of performance measurement in the processual dynamics of strategic change, particularly in enacting effective strategic change. Our model examines the role of performance measurement in driving strategy-consistent operational changes and in ensuring that the desired objectives of the strategic change process are achieved. We investigate these roles for performance measurement over time and empirically document lags between changes in strategic priorities, changes in operational processes, and subsequent changes in firm performance. We find that performance measurement supports the implementation of strategic change by influencing the extent to which changes to operational tasks and activities are made in response to new strategic priorities, as well as influencing the quality and impact of these operational changes, as reflected in improved contemporaneous and future firm performance. This paper was accepted b...
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This study uses detailed survey data from key decision makers in acquiring firms to test the impact of information availability in corporate acquisitions on pre-acquisition valuation and post-acquisition performance. Our results provide... more
This study uses detailed survey data from key decision makers in acquiring firms to test the impact of information availability in corporate acquisitions on pre-acquisition valuation and post-acquisition performance. Our results provide support for the hypothesis that information constraints at the time of target valuation are associated with greater overpayment and weaker post-acquisition performance. Prior ties between firms are found to reduce information constraints to acquiring managers, and thereby reduce overpayment and increase post-acquisition performance. Bids by other potential acquirers are found to signal their private information about the target, providing a substitute for lacking information. This effect holds particularly for non-financial data, which are harder to obtain. These findings suggest that overpayment and underperformance can be prevented not only when an acquirer possesses more information, but also when in the absence of needed information, the presence...
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This paper examines firms' design of performance measurement systems to support the effective implementation of business strategy, and tests whether different strategic choices are associated with the use of different performance... more
This paper examines firms' design of performance measurement systems to support the effective implementation of business strategy, and tests whether different strategic choices are associated with the use of different performance measures. Performance measurement choices analyzed are the extensiveness, purposes and types of performance measures used. In addition, the use of alternative controls, action controls and problem solving teams, is
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In this study, we examine how firms' collaborative objectives influence their use of performance management practices in interfirm relationships. We conceptualize collaborative performance management to include three interrelated... more
In this study, we examine how firms' collaborative objectives influence their use of performance management practices in interfirm relationships. We conceptualize collaborative performance management to include three interrelated practices: measurement of interfirm performance, information sharing, and interaction between boundary spanners of partner firms. Prior research has related firms' interfirm control choices to transaction risk as proxied by “given” transaction characteristics. We hypothesize that transaction characteristics are determined by the strategic importance of the collaboration (manifested by the importance of firms' collaborative objectives) and, in turn, influence the use of firms' performance management practices. Analysis of survey data supports our hypotheses that strategic importance of the collaboration is associated with transaction characteristics (i.e., with asset specificity, transaction scope, task interdependencies, and environmental va...
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... Search for Henri C. Dekker Search for Alexandra Van den Abbeele. ... 27. Kale, P. and Singh, H., "Building firm capabilities through learning: The role of the alliance learning process in alliance capability and firm-level... more
... Search for Henri C. Dekker Search for Alexandra Van den Abbeele. ... 27. Kale, P. and Singh, H., "Building firm capabilities through learning: The role of the alliance learning process in alliance capability and firm-level alliance success," Strategic Management J., v28, pp. ...
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Using an unusually comprehensive database on 858 transactions for information technology products and accompanying services, we study how close partners who are exposed to opportunistic hazards structure and control a significant... more
Using an unusually comprehensive database on 858 transactions for information technology products and accompanying services, we study how close partners who are exposed to opportunistic hazards structure and control a significant transaction. We analyze data on the terms of contracting to determine whether transaction and supplier characteristics that generate opportunistic hazards are related to the formal management control structure. We
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ABSTRACT Family firms play a significant role in the global economy. Consistently, over the last two decades academia has turned its attention to the family dimension as a determinant of business phenomena, and this interest has increased... more
ABSTRACT Family firms play a significant role in the global economy. Consistently, over the last two decades academia has turned its attention to the family dimension as a determinant of business phenomena, and this interest has increased over time. While family business research has reached an age of ‘adolescence’ as a field of study, accounting research to date seems to have been rather slow to pick up on the distinctive characteristics of family firms, and their implications for accounting and reporting practices. In an attempt to accelerate and support research in the field, in this article we highlight theoretical and empirical challenges that accounting scholars need to consider when addressing issues related to accounting and reporting in family firms. These challenges include the selection and potential mixing of appropriate theoretical frameworks, and complications in defining operationally what family firms are. We also provide a ‘state of the art’ of studies in financial accounting, management accounting and auditing, identifying which issues in relation to family firms have been addressed in the research, and which theories, research methods and types of data have been used in these studies. We conclude by providing directions for future research that can advance our understanding of accounting and reporting in family firms.
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This paper reports the results of a survey study among Dutch listed manufacturing companies on the adoption and use of costing practices that resemble the Japanese target costing concepts. Twenty-two of thirty-two responding firms claimed... more
This paper reports the results of a survey study among Dutch listed manufacturing companies on the adoption and use of costing practices that resemble the Japanese target costing concepts. Twenty-two of thirty-two responding firms claimed to use costing practices similar to target costing. The distribution of adoption over industries confirmed the expectation that assembling firms show a relatively high adoption of target costing. The adoption of these techniques appears to be related to an intense competitive and unpredictable enviromnent. Similar to target costing studies in Japan and Germany, the main objective for adopting these techniques in the sample is to reduce costs. The product development and design departments appear to be leading in the target cost management process, while the accounting department is only moderately involved. Finally, the most frequently adopted organizational form for target cost management are team structures, in which multiple functions combine kn...
Interfirm relationships introduce new challenges for management accounting. One such challenge is to provide the information for the coordination and optimization of activities across firms in a value chain. In literature it is argued... more
Interfirm relationships introduce new challenges for management accounting. One such challenge is to provide the information for the coordination and optimization of activities across firms in a value chain. In literature it is argued that a value chain analysis is a method to meet this challenge. However, little empirical evidence currently exists on the use of this analysis in practice. This paper presents an exploratory case study on the use of an activity-based casting model by the U.K. retail firm J. Sainsbury's and a group of 36 suppliers for supporting supply chain management practices. This cost model is based on the principles of value chain analysis, and integrates cost information of firms across the value chain. This allows them to perform benchmark analyses, strategie what-if analyses and monitoring of supply chain costs for supply chain optimization.
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ABSTRACT We examine the portfolio of management controls used to mitigate alliance risk at three separate firms in order to analyze the suitability of management control frameworks proposed by Simons (1995), Merchant and Van der Stede... more
ABSTRACT We examine the portfolio of management controls used to mitigate alliance risk at three separate firms in order to analyze the suitability of management control frameworks proposed by Simons (1995), Merchant and Van der Stede (2007), and Jensen and Meckling (1992) as descriptors of controls used in interfirm alliances. We find that, for the most part, these frameworks generalize to fit the data on how firms manage risks of strategic alliances. However, in applying these frameworks successively to the same data, we find that the researcher's theoretical lens imparts a distinctive understanding of the function of alliance management controls in relation to alliance risk. Specifically, we conclude that alliances that have value-creation at their root engender management controls that are well described by the management control frameworks of Simons (1995) and Merchant and Van der Stede (2007). These frameworks comprehend both economic and behavioral aspects of interfirm exchange and place much weight on coordination and communication between alliance partners. The management controls employed in alliances focused on transaction efficiency and cost minimization are described equally well by the framework of Jensen and Meckling (1992), which relies heavily on economic theory.
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ABSTRACT Subjective ratings of employee performance can improve contracting efficiency; however, if supervisors are influenced by ancillary information that is meant to be excluded from consideration in subjective evaluation, contracting... more
ABSTRACT Subjective ratings of employee performance can improve contracting efficiency; however, if supervisors are influenced by ancillary information that is meant to be excluded from consideration in subjective evaluation, contracting benefits may not be obtained. Experimental research traces bias induced by ancillary information to a variety of cognitive processes (e.g., anchoring, halo effect, moderated confidence, and confirmation bias). Bias is difficult to measure in a natural setting because it generates an inflated correlation between the subjective rating and ancillary information beyond any “natural” correlation that might arise from the interrelationship among performance dimensions. We use panel data from a large retail firm to disentangle the effects on ratings of two types of ancillary information: alternative performance measures and the supervisor’s ex ante impression of subordinate ability. We argue that bias associated with ancillary information varies predictably with time and across subordinate-supervisor dyads, while natural correlation is persistent over time and for a given supervisor. This difference allows us to disentangle bias from natural correlation. We find that experience in subjective assessment mitigates supervisors’ reliance on ancillary information. Specifically, the associations between subjective ratings and both objective performance measures and supervisors’ ex ante impressions of subordinates’ ability decline over time. Furthermore, cross-sectional differences in the supervisor-subordinate relationship moderate the bias in current period subjective ratings. Specifically, correlation between supervisors’ ex ante impressions of subordinate ability and subjective ratings is weaker for higher quality relationships. The study contributes some of the first field-based evidence of the sources of bias in subjective ratings.
Abstract: This paper provides field evidence on the management control practices used to mitigate risk and enhance cooperation in strategic alliances. The data are extensive field interviews with 38 managers in three large US companies... more
Abstract: This paper provides field evidence on the management control practices used to mitigate risk and enhance cooperation in strategic alliances. The data are extensive field interviews with 38 managers in three large US companies that have significant alliance risk exposure. Interviews are used to probe the specific forms of risk that firms face as well as the use of alliance management controls. Content analysis of the interview transcripts aimed at mapping the use of alliance management controls is structured by three widely used ...
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ABSTRACT Trust and control are considered primary determinants of the success of interfirm relationships, in particular when these relationships are subject to significant risk. Prior studies have questioned how control activities within... more
ABSTRACT Trust and control are considered primary determinants of the success of interfirm relationships, in particular when these relationships are subject to significant risk. Prior studies have questioned how control activities within cooperative arrangements are associated with the development of trust, and have provided arguments for both complementary and substitutive effects. Critical in unpacking this interrelationship is understanding how control activities affect behavior that form a basis for trust. We develop and experimentally test a dynamic model of how refined accounting information and monitoring control affect negotiation behavior and trust development during negotiations between outsourcing partners. Our results, based on a sample of 175 dyadic observations, show that the presence of refined accounting information and monitoring control both independently increase negotiators’ use of cooperative negotiation tactics, which in turn positively influences negotiator trust at a later stage of the negotiations. These results hold particularly for negotiations that are subject to high uncertainty, which supports the argument that refined accounting information and monitoring control help alleviating the negative effects of uncertainty on negotiation behavior and trust. While we do not find negotiator trust to be predictive of future negotiation behavior over and above the effect of prior behavior, we do find trust to have an identifiable positive effect on joint performance. Finally, we find that when monitoring control is removed at a later stage in the negotiation process, its earlier positive effects on negotiation behavior, trust and performance persist, which effects hold in particular when negotiators face high uncertainty.
ABSTRACT This paper examines firms' design of performance measurement systems to support the effective implementation of business strategy, and tests whether different strategic choices are associated with the use of different... more
ABSTRACT This paper examines firms' design of performance measurement systems to support the effective implementation of business strategy, and tests whether different strategic choices are associated with the use of different performance measures. Performance measurement choices analyzed are the extensiveness, purposes and types of performance measures used. In addition, the use of alternative controls, action controls and problem solving teams, is examined. To explain these management control choices, the structural model developed also includes other important contingency variables that are associated with business strategy, including firm competencies, technology and environmental uncertainty. An analysis of 387 survey responses from a cross-section of industries suggests the existence of three broad types of business strategy, relating to innovation, customer-quality and low-cost. The findings suggest that emphasis on different strategies is associated differently with firms' competencies, environmental uncertainty, choice of technology, and use of performance measures. Although more emphasis on low-cost or customer-quality is associated with more extensive use of performance measurement information, each of the three strategies is also associated with use of different types of performance measures. Specifically, firms emphasizing innovation emphasize measures related to innovation, cost & efficiency and market performance. High emphasis on a customer-quality strategy is associated with emphasis on measures relating to quality and managers. Firms emphasizing low-cost emphasize measures related to cost & efficiency, production (systems) and employees. These firms also use performance information for more purposes than others. The results further show that most firms pursue combined strategies, which, compared to emphasis on a single strategy, is associated with more extensive and intensive use of performance information. This study thus finds support for contingency propositions that different strategic choices are differently associated with environmental and firm-level contingencies and require different configurations of management control systems.