Summary
Summary papers International Management Control (!! Meeting 2 to 5)
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This is a summary of papers discussed in the first five lectures of IMC.
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Meeting 2Hannan et RQ: Can an information system change the balance between reporting honest and
al. (2006) getting the benefits of appearing honest and reporting dishonest and acquiring more
The Effect of resources?
Information H1: The information system signal is a focal point for managers’ reports.
Systems on H2: Managers’ reports are more honest when an information system exists than when
Honesty in no information system exists.
Managerial H3: The information system is less of a focal point for managers’ reports when the
Reporting: A information system is precise than when the information system is coarse.
Behavioral H4: Managers’ reports are more honest under a coarse information system than
Perspective under a precise information system.
Agents trade-off the benefits of appearing honest with the benefits of
misrepresentation when communicating their private information. The existence of an
information system increases managerial honesty but honesty is lower under a precise
information system than under a coarse information system.
Hard control systems: can crowd out people’s social preferences and instigate the
behaviour one wants to reduce (sometimes).
This does not simply imply that you should never use hard control systems…
Mazar et al. Three important determinants of dishonesty: the magnitude of the external rewards,
(2008) The the probability of being caught and the magnitude of punishment.
Dishonesty RQ: How do people resolve the tension of being dishonest?
of Honest H1: Dishonesty increases as attention to standards for honesty decreases
People: A H2: Dishonesty increases as categorization malleability increases
Theory of H3: Given the opportunity to be dishonest, people are dishonest up to a certain level
Self-Concept that does not force them to update their self-concept
Maintenance Check experiments in slides lecture.
When people have the ability to cheat, they cheated but the magnitude of cheating is
much lower than what economic theory predicts. People try to find a balance between
‘benefiting financially from dishonesty’ and ‘benefiting from maintaining a positive self-
concept’ by developing an acceptable level of dishonesty. The amount of dishonesty
that people allow without losing their honest self-concept varies by categorization
malleability and the salience of moral standards.
Campbell Old system employee and new system employee
(2012) RQ: Are firms really using employee selection as a control mechanism?
Employee No hypotheses. The gap is about differences in preferences between the manager and
selection as the employee. By selecting employees that believe in the organizational values you
a control reduce the ‘preference difference’.
mechanism
Employee selection as an important control mechanism when measuring and
contracting on output measures is difficult. It is difficult to measure output in the
decentralized organisation (Federal Credit Union in the US) because objectives are
stated in relatively intangible terms and financial outcomes occur over long time
horizons. Employees selected through channels that are more likely to sort on
preference alignment with organizational objectives are more likely to execute the firm
strategy effectively. Potential disadvantage: friends that are selecting friends can also
lead to a culture in which a critical voice is not allowed anymore.
, Meeting 3
Leroy et al. RQ: How does leader behavioral integrity for safety help solve follower’s double bind
(2012): between adhering to safety protocols and speaking up about mistakes against
Behavioral protocols?
integrity for H1: Leader behavioral integrity for safety positively relates to team priority of safety.
safety, priority H2: Leader behavioral integrity for safety positively relates to team psychological
of safety, safety.
psychological H3: Team priority of safety negatively relates to reported treatment errors.
safety, and H4: Team psychological safety positively relates to reported treatment errors.
patient safety: H5: Team priority of safety is more negatively related to reported treatment errors for
a team-level higher levels of team psychological safety.
study H6: Team priority of safety and team psychological safety mediate the effect of leader
behavioral integrity for safety on reported treatment errors
H7: Team psychological safety moderates the effect of leader behavioral integrity for
safety on reported treatment errors through team priority of safety, resulting in lower
reported treatment errors when team psychological safety is low, but less so when it
is high.
(4 Belgian hospitals)
A first implication is that leader behavioral integrity for safety may be important for
creating a climate of safety in the organization. Our results suggest that helping these
managers maintain their behavioral integrity for safety may create a safer work
environment. In this way, leader behavioral integrity not only reflects leader reliability
but also promotes a high-reliability organization.
Second, these results suggest that organizations should consider team psychological
safety in addition to safety compliance when evaluating work unit safety.
Our findings suggest that by staying true to the safety values they espouse, leaders
can start to solve the managerial dilemma of providing clear safety directives while
encouraging employees to report errors. This is important, as the results of our study
indicate that the combination of both a high priority of safety and a psychologically
safe working environment predict the number of reported treatment errors in
hospitals.
Tost et al. RQ: What is the impact of the subjective experience of power on leadership dynamics
(2013): When and team performance? Does the psychological effect of power on formal leaders spill
power makes over to affect team performance?
others H1: Formal leaders with a high subjective sense of power spend more time talking in
speechless: team meetings than formal leaders with a neutral subjective sense of power.
the negative H2: Teams whose formal leader experiences a high subjective sense of power report
impact of lower levels of communication openness (i.e., authority openness and open
leader power communication) than teams whose formal leader experiences a neutral subjective
on team sense of power.
performance H3: Teams whose formal leader experiences a high subjective sense of power exhibit
worse performance than teams whose formal leader experiences a neutral subjective
sense of power.
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