Prior research establishes that boards of directors can encourage risk-averse managers to take risky actions by providing stock options and severance pay. We demonstrate that the ability of these incentives to encourage risk-taking hinges on the level of uncertainty facing the manager, and that...

We examine the performance of 84 firms that adopt value-based management (VBM) systems during the period 1984-1997. The typical firm significantly improves matched-firm-adjusted residual income after adopting VBM. This improvement persists for the five post-adoption years studied. After...

We examine the effect of stock options on managerial incentives to invest. Our chief innovation is a model wherein firm value and executive decisions are endogenous. Numerical solutions to our model show that managerial incentives to invest are multi-dimensional and highly sensitive to option...

This paper studies the capital budgeting process in a setting where a manager is privately informed about the profitability of an investment project and enjoys non-pecuniary benefits of control (quot;empire benefitsquot;). I characterize the optimal required rate of return and show that a...

A case study of the implementation of the balanced scorecard in a large local government authority is reported. Based on interview data, the factors that were perceived by senior managers to be important to the success or failure of the implementation are analysed. It is determined that...

This paper applies Pettigrew's 'context, content, process' model to evaluate, using a case study approach, the use of management control systems (MCS) for FDI decisions. The organisational control mix included both formal, financially quantifiable information and explicit references to the...

The controllability principle, which stipulates that managers should only be evaluated based on elements that they can control, has been widely studied in the management control literature, both from theoretical and empirical perspectives. It is based on the idea that managers are better...

This paper reports the results of a series of case studies conducted to explore the impact of the Sarbanes-Oxley Act of 2002 on the performance of small and medium-sized enterprises (SMEs). This issue is critical as the SEC and the PCAOB continue to defend the requirement that SMEs adhere to the...

This paper reports the results of a series of case studies conducted to explore the impact of the Sarbanes-Oxley Act of 2002 on the performance of small and medium-sized enterprises (SMEs). This issue is critical as the SEC and the PCAOB continue to defend the requirement that SMEs adhere to the...

In this paper, we investigate the role of financial incentives and social incentives in multi-task settings where the agent makes an effort level choice and an effort allocation choice. We focus on a setting where these choices are not independent and an active trade-off between effort level and...