Surveys indicate that the majority of companies in the UK have adopted divisionalised organisational structure. The manner in which divisions are controlled and evaluated is therefore of considerable importance. However, much of the research relating to divisional performance measurement is...

Changing management accounting systems requires more than appropriate implementation. It is argued that structural characteristics of an organization, centralization in particular, should also be taken into account when deciding on a change. Centralization implies higher costs of communication...

The corporate governance issue has received significant attention recently at both the academic and the regulatory levels. However, there is still no generally accepted definition of the term, consensus about what it means or common system of ensuring good practice. For the emerging economies of...

Manufacturers have recently begun outsourcing product assembly and completion tasks to their suppliers. Such outsourcing solves several contracting problems, but generates new incentive frictions between manufacturers and their suppliers. In this paper, we analyze a manufacturer's decision to...

Vertical integration is often proposed as a way to resolve hold-up problems in connection with specific investments. However, decision-makers are generally compensated based on divisional (not firm-wide) profit. Hence, hold-up problems are bound to resurface in integrated firms. This paper...

We study the determinants of organizational slack in large decentralized firms and focus in particular on how management accounting systems (represented by business unit controllers) affect slack. We rely on an adverse selection model to derive several predictions and to motivate our tests....

This paper intends to contribute to the (bounded rationality) foundations of trust, showing how the concept of trust is related to the basic hypothesis on the behavior of the two people involved. First, I briefly review some definitions of trust found in the literature, and attempt to establish...

Cross-functional teams operate in dynamic environments in which it is difficult to properly align incentives. As a result the free rider problem can emerge. This paper presents two experiments in which dominant incentives to free ride were held constant. The first experiment examines the...

This study empirically examines two basic questions. First, where and why do firms make greater or lesser use of subjectivity in the performance evaluations that lead to annual bonuses? Second, what are the effects of greater or lesser use of subjectivity on employee pay satisfaction? We examine...