How can management control system fairness reduce managers' unethical behaviours?

European Management Journal

Volumn 31, Issue 3, 2013, Pages 209-222

  Langevin, Pascal ^a   Mendoza, Carla ^b  

^a EMLYON BUSINESS SCHOOL   (France)

^b ESCP EUROPE   (France)

Author keywords

Data manipulation; Ethics; Fairness; Justice; Management control systems; Organisational commitment; Slack; Trust

Indexed keywords

EID: 84875517990     PISSN: 02632373     EISSN: None     Source Type: Journal    
DOI: 10.1016/j.emj.2012.12.001     Document Type: Article

References (133)

1. Adams J.S. Towards an understanding of inequity. Journal of Abnormal and Social Psychology 1963, 67:422-436.
2. Adams J.S. Inequity in social exchange. Advances in experimental social psychology 1965, Vol. 2:267-299. Academic Press, New-York.
3. Alexander S., Ruderman M. The role of procedural and distributive justice in organizational behavior. Social Justice Research 1987, 1:177-198.
4. Ambrose M.L., Arnaud A. Are procedural justice and distributive justice conceptually distinct?. Handbook of organizational justice 2005, 59-84. Erlbaum Associates, Mahwah, NJ. J. Greenberg, J.A. Colquitt (Eds.).
5. Anthony R.N., Govindarajan V. Management control systems 2007, McGraw-Hill, New-York, NY. 12th ed.
6. Ardichvili A., Jondle D., Kowske B., Cornachione E., Li J., Thakadipuram T. Ethical cultures in large business organizations in Brazil, Russia, India, and China. Journal of Business Ethics 2012, 105:415-428.
7. Argyris C. The impact of budgets on people 1952, The Controllership Foundations, Cornell University.
8. Atkinson A.A., Balakrishnan R., Booth P., Cote J.M., Groot T., Malmi T., Roberts H., Enrico Uliana, Wu A. New directions in management accounting research. Journal of Management Accounting Research 1997, 9:79-108.
9. Barrett-Howard E., Tyler T.R. Procedural justice as a criterion in allocation decisions. Journal of Personality and Social Psychology 1986, 50:296-304.
10. Barry B., Shapiro D.L. When will grievants desire voice? A test of situational, motivational, and attributional explanations (1997-2002). International Journal of Conflict Management 2000, 11:106-134.
11. Barsky A. Understanding the ethical cost of organizational goal-setting: A review and theory development. Journal of Business Ethics 2008, 81:63-81.
12. Berry A.J., Broadbent J., Otley D. Management control: Theories, issues and performance 2005, Palgrave Macmillan, Basingstoke. 2nd ed.
13. Beugré C.D. A cultural perspective of organizational justice 2007, IAP, Charlotte.
14. Bies R.J. Are procedural justice and interactional justice conceptually distinct?. Handbook of organizational justice 2005, 85-112. Erlbaum Associates, Mahwah, NJ. J. Greenberg, J.A. Colquitt (Eds.).
15. Bies R.J., Moag J.S. Interactional justice. Communication criteria of fairness. Research on Negociation in Organizations 1986, 1:43-55.
16. Bitner L.N., Dolan R. Does smoothing earnings add value?. Management Accounting: Official Magazine of Institute of Management Accountants 1998, 80:44-47.
17. Blader S.L., Tyler T.R. What constitutes fairness in work settings? A four-component model of procedural justice. Human Resource Management Review 2003, 13:107-126.
18. Brockner J. Making sense of procedural fairness: How high procedural fairness can reduce or heighten the influence of outcome favorability. Academy of Management Review 2002, 27:58-76.
19. Brockner J., Wiesenfeld B.M. An integrative framework for explaining reactions to decisions: Interactive effects of outcomes. Psychological Bulletin 1996, 120:189-208.
20. Brownell P. The role of accounting data in performance evaluation, budgetary participation, and organizational effectiveness. Journal of Accounting Research 1982, 20:12-27.
21. Brownell P., McInnes M. Budgetary participation, motivation, and managerial performance. The Accounting Review 1986, 61:587-600.
22. Burkert M., Fischer F.M., Schäffer U. Application of the controllability principle and managerial performance. The role of role perceptions. Management Accounting Research 2011, 22:143-159.
23. Burney L.L., Henle C.A., Widener S.K. A path model examining the relations among strategic performance measurement system characteristics, organizational justice, and extra- and in-role performance. Accounting, Organizations and Society 2009, 34:305-321.
24. Bushman R.M., Indjejikian R.J., Smith A. Aggregate performance measures in business unit manager compensation: The role of intrafirm interdependencies. Journal of Accounting Research 1995, 33:101-128.
25. Chenhall R.H., Langfield-Smith K. Multiple perspectives of performance measures. European Management Journal 2007, 25:266-282.
26. Choudhury N. Responsibility accounting and controllability. Accounting & Business Research 1986, 16:189-198.
27. Cohen-Charash Y., Spector P.E. The role of justice in organizations: A meta-analysis. Organizational Behavior and Human Decision Processes 2001, 86:278-321.
28. Colquitt J.A., Conlon D.E., Wesson M.J. Justice at the millennium: A meta-analytic review of 25 years of organizational justice research. Journal of Applied Psychology [H.W.Wilson - SSA] 2001, 86:425-445.
29. Colquitt J.A., Greenberg J., Scott B.A. Organizational justice. Where do we stand?. Handbook of organizational justice 2005, 589-619. Erlbaum Associates, Mahwa, NJ. J. Greenberg, J.A. Colquitt (Eds.).
30. Colquitt J.A., Jackson C.L. Justice in teams: The context sensitivity of justice rules across individual and team contexts. Journal of Applied Social Psychology 2006, 36:868-899.
31. Colquitt J.A., Scott B.A., LePine J.A. Trust, trustworthiness, and trust propensity: A meta-analytic test of their unique relationships with risk taking and job performance. Journal of Applied Psychology 2007, 92:909-927.
32. Cropanzano R., Ambrose M.L. Procedural and distributive justice are more similar than you think: A monistic perspective and a research agenda. Advances in organizational justice 2001, 119-151. Stanford University Press, Stanford, CA. J. Greenberg, R. Cropanzano (Eds.).
33. Cropanzano R., Bowen D.E., Gilliland S.W. The management of organizational justice. The Academy of Management Perspectives 2007, 21:34-48.
34. Cropanzano R., Howes J.C., Grandey A.A., Toth P. The relationship of organizational politics and support to work behaviors, attitudes, and stress. Journal of Organizational Behavior 1997, 18:159-180.
35. Cropanzano R., Prehar C.A., Chen P.Y. Using social exchange theory to distinguish procedural from interactional justice. Group & Organization Management 2002, 27:324-351.
36. Cropanzano R., Rupp D.E. Social exchange theory and organizational theory. Justice, morality, and social responsibility 2008, 63-99. Information Age Publishing, Charlotte, NC. S.W. Gilliland, D.D. Steiner, D.P. Skarlicki (Eds.).
37. Cropanzano R., Stein J.H. Organizational justice and behavioral ethics: Promises and prospects. Business Ethics Quarterly 2009, 19:193-233.
38. DeFond M.L., Park C.W. Smoothing income in anticipation of future earnings. Journal of Accounting & Economics 1997, 23:115-139.
39. Dent J.F. Tension in the design of formal control systems: A field study in a computer company. Accounting and management: Field study perspectives 1987, 119-145. Harvard Business School Press, Boston, MA. W.J. Bruns, R.S. Kaplan (Eds.).
40. Deutsch M. Equity, equality, and need: What determines which value will be used as the basis for distributive justice?. Journal of Social Issues 1975, 31:137-149.
41. Drury C., El-Shishini H. Divisional performance measurement: An examination of the potential explanatory factors 2005, CIMA, London, UK.
42. Dunk A.S. The Effect of budget emphasis and information asymmetry on the relation between budgetary participation and slack. Accounting Review 1993, 68:400-410.
43. Erdogan B. Antecedents and consequences of justice perceptions in performance appraisals. Human Resource Management Review 2002, 12:555-578.
44. Fisher J. Use of nonfinancial performance measures. Journal of Cost Management 1992, 6:31-38.
45. Folger R., Bies R.J. Managerial responsibilities and procedural justice. Employee Responsibilities & Rights Journal 1989, 2:79-90.
46. Folger R., Greenberg J. Procedural justice. An interpretive analysis of personnel systems. Research in personnel and human resources management 1985, Vol. 3:141-183. JAI Press, Greenwich, CT.
47. Folger R., Konovsky M.A. Effects of procedural and distributive justice on reactions to pay raise decisions. Academy of Management Journal 1989, 32:115-130.
48. Fortin M. Perspectives on organizational justice. Concept clarification, social context integration, time and links with morality. International Journal of Management Reviews 2008, 10:93-126.
49. French W. The personnel management process: Human resources administration 1964, Houghton Mifflin, New-York.
50. Giraud F., Langevin P., Mendoza C. Justice as a rationale for the controllability principle: A study of managers' opinions. Management Accounting Research 2008, 19:32-44.
51. Greenberg J. Determinants of perceived fairness of performance evaluations. Journal of Applied Psychology 1986, 71:340-342.
52. Greenberg J. Organizational justice. Yesterday, today, and tomorrow. Journal of Management 1990, 16:399-432.
53. Greenberg J. The social side of fairness: Interpersonal and informational classes of organizational justice. Justice in the workplace. Approaching fairness in human resource management 1993, 79-103. Lawrence Erlbaum Associates, Hillsdale, NJ. R. Cropanzano (Ed.).
54. Greenberg J. Promote procedural justice to enhance acceptance of work outcomes. A handbook of principles of organizational behavior 2000, 181-195. Backwell, Oxford, England. E.A. Locke (Ed.).
55. Greenberg J. Setting the justice agenda: Seven unanswered questions about " What, Why, and How" Journal of Vocational Behavior 2001, 58:210-219.
56. Greenberg J., Folger R. Procedural justice, participation, and the fair process effect in groups and organizations. Basic group processes 1983, 235-256. Springer-Verlag, New York. P.B. Paulus (Ed.).
57. Hartmann F., Slapničar S. How formal performance evaluation affects trust between superior and subordinate managers. Accounting, Organizations and Society 2009, 34:722-737.
58. Hayes R.H., Abernathy W.J. Managing our way to economic decline. Harvard Business Review 1980, 58:67-77.
59. Homans G.C. Social behavior: Its elementary forms 1961, Routledge and Kegan Paul, London.
60. Ilgen D.R., Fisher C.D., Taylor M.S. Consequences of individual feedback on behavior in organizations. Journal of Applied Psychology 1979, 64:349-371.
61. Jones T.M. Ethical decision making by individuals in organizations: An academy of management. The Academy of Management Review 1991, 16:366-395.
62. Kanfer R., Sawyer J., Earley P.C., Lind E.A. Fairness and participation in evaluation procedures: Effects on task attitudes and performance. Social Justice Research 1987, 1:235-249.
63. Kaplan R.S., Norton D.P. The balanced scorecard: Translating strategy into action 1996, Harvard Business School Press, Boston, Massachusetts.
64. Kenis I. Effects of Budgetary Goal Characteristics on Managerial Attitudes and Performance. Accounting Review 1979, 54:707-721.
65. Kim W.C., Mauborgne R.A. Procedural justice, attitudes, and subsidiary top management compliance with multinationals' corporate strategic decisions. Academy of Management Journal 1993, 36:502-526.
66. Konovsky M.A., Pugh S.D. Citizenship behavior and social exchange. Academy of Management Journal 1994, 37:656-669.
67. Landy F.J., Barnes J.L., Murphy K.R. Correlates of perceived fairness and accuracy of performance evaluation. Journal of Applied Psychology 1978, 63:751-754.
68. Lau C.M., Moser A. Behavioral effects of nonfinancial performance measures: The role of procedural fairness. Behavioral Research in Accounting 2008, 20:55-71.
69. Lau C.M., Sholihin M. Financial and nonfinancial performance measures: How do they affect job satisfaction?. The British Accounting Review 2005, 37:389-413.
70. Lau C.M., Tan S.L.C. The importance of procedural fairness in budgeting. Advances in Accounting 2005, 21:333-356.
71. Lau C.M., Tan S.L.C. The effects of procedural fairness and interpersonal trust on job tension in budgeting. Management Accounting Research 2006, 17:171-186.
72. Laverty K.J. Economic " Short-Termism" : The debate, the unresolved issues, and the implications for management practice and research. Academy of Management Review 1996, 21:825-860.
73. Leventhal G.S. What should be done with equity theory? New approaches to the study of fairness in social relationships. Social exchange: Advances in theory and research 1980, 27-55. Plenum Press, New-York. K. Gergen, J. Greenberg, R. Willis (Eds.).
74. Libby T. The influence of voice and explanation on performance in a participative budgeting setting. Accounting, Organizations and Society 1999, 24:125-137.
75. Libby T., Lindsay R.M. Beyond budgeting or budgeting reconsidered? A survey of North-American budgeting practice. Management Accounting Research 2010, 21:56-75.
76. Lind E.A. Fairness heuristic theory: Justice judgments as pivotal cognitions in organizational relations. Advances in organizational behavior 2001, 56-88. Stanford University Press, Stanford, CA. J. Greenberg, R. Cropanzano (Eds.).
77. Lind E.A., Friedland N., Dickenberger M. Reactions to procedural models for adjudicative conflict resolution. Journal of Conflict Resolution 1978, 22:318-341.
78. Lind E.A., Tyler T. The social psychology of procedural justice 1988, Plenum Press, New-York, NY.
79. Lindquist T.M. Fairness as an antecedent to participative budgeting: Examining the effects of distributive justice, procedural justice and referent cognitions on satisfaction and performance. Journal of Management Accounting Research 1995, 7:122-147.
80. Little H.T., Magner N.R., Welker R.B. The fairness of formal budgetary procedures and their enactment: Relationships with managers' behavior. Group & Organization Management 2002, 27:209-225.
81. Lowe E.A., Shaw R.W. An analysis of managerial biasing: Evidence from a company's budgeting process. Journal of Management Studies 1968, 5:304-315.
82. Lukka K. Budgetary biasing in organizations: Theoretical framework and empirical evidence. Accounting, Organizations and Society 1988, 13:281-301.
83. Maiga A.S., Jacobs F.A. Budget participation's influence on budget slack: The role of fairness perceptions, trust and goal commitment. Journal of Applied Management Accounting 2007, 5:39-58.
84. Magner N., Welker R.B., Campbell T.L. The interactive effect of budgetary participation and budget favorability on attitudes toward budgetary decision makers: A research note. Accounting, Organizations and Society 1995, 20:611-618.
85. Magner N.R., Johnson G.G., Little H.T., Staley A.B., Welker R.B. The case for fair budgetary procedures. Managerial Auditing Journal 2006, 21:408-419.
86. Magner N.R., Welker R.B., Johnson G.G. Testing a model of voice, control, procedural justice, and organizational commitment with latent variable structural equation analysis. International Journal of Conflict Management 1992, 3:223-236.
87. March J.G. Decisions and organizations 1988, Blackwell, Cambridge, MA.
88. Masterson S.S., Lewis K., Goldman B.M., Taylor M.S. Integrating justice and social exchange: The differing effects of fair procedures and treatment on work relationships. Academy of Management Journal 2000, 43:738-748.
89. McFarlin D.B., Sweeney P.D. Distributive and procedural justice as predictors of satisfaction with personal and organizational outcomes. Academy of Management Journal 1992, 35:626-637.
90. McNally G.M. Responsibility accounting and organisational control. Journal of Business Finance & Accounting 1980, 7:165-181.
91. Merchant K.A. Budgeting and the propensity to create budgetary slack. Accounting, Organizations and Society 1985, 10:201-210.
92. Merchant K.A. Rewarding results: Motivating profit center managers 1989, Harvard Business School Press, Boston, MA.
93. Merchant K.A. The effects of financial controls on data manipulation and management myopia. Accounting, Organizations & Society 1990, 15:297-313.
94. Merchant K.A., Bruns W.J. Measurements to cure management myopia. Business horizons 1986, 29:56-64.
95. Merchant K.A., Manzoni J.-F.o. The achievability of budget targets in profit centers: A field study. The Accounting Review 1989, 64:539-558.
96. Merchant K.A., Rockness J. The ethics of managing earnings: An empirical investigation. Journal of Accounting and Public Policy 1994, 13:79-94.
97. Merchant K.A., Van der Stede W.A. Ethical issues related to " results-oriented" management control systems. Research on Accounting Ethics 2000, 6:153-169.
98. Merchant K.A., Van der Stede W.A. Management control systems 2007, Vol. 2. Pearson Education Ltd., Harlow, UK.
99. Merchant K.A., Van der Stede W.A., Lin T.W., Yu Z. Performance measurement and incentive compensation: An empirical analysis and comparison of chinese and western firms' practices. European Accounting Review 2011, 20:639-667.
100. Milani K. The relationship of participation in budget-setting to industrial supervisor performance and attitudes: A field study. The Accounting Review 1975, 50:274-284.
101. Moon P., Fitzgerald L. Delivering the goods at TNT: The role of the performance measurement system. Management Accounting Research 1996, 7:431-457.
102. Mowday R.T., Steers R.M., Porter L.W. The measurement of organizational commitment. Journal of Vocational Behavior 1979, 14:224-247.
103. Nouri H. Using organizational commitment and job involvement to predict budgetary slack a research note. Accounting, Organizations & Society 1994, 19:289-295.
104. Nouri H., Parker R.J. The effect of organizational commitment on the relation between budgetary participation and budgetary slack. Behavioral Research in Accounting 1996, 8:74-90.
105. Onsi M. Factor analysis of behavioral variables affecting budgetary slack. The Accounting Review 1973, 48:535-548.
106. Otley D. Performance management: A framework for management control systems research. Management Accounting Research 1999, 10:363-382.
107. Otley D.T. Issues in accountability and control: Some observations from a study of colliery accountability in the British coal corporation. Management Accounting Research 1990, 1:101-123.
108. Price J.L., Mueller C.W. Handbook of organizational measurement 1986, Pitman, Marshfield, MA.
109. Roberson Q.M., Stewart M.M. Understanding the motivational effects of procedural and informational justice in feedback processes. British Journal of Psychology 2006, 97:281-298.
110. Rousseau D.M., Sitkin S.B., Burt R.S., Camerer C. Not so different after all: A cross-discipline view of trust. Academy of Management Review 1998, 23:393-404.
111. Salancik G.R. Commitment and the control of organizational behavior and belief. New directions in organizational behavior 1977, 1-54. St. Clair Press, Chicago. B.M. Staw, G.R. Salancik (Eds.).
112. Schiff M., Lewin A.Y. The impact of people on budgets. Accounting Review 1970, 45:259-268.
113. Staley A.B., Magner N. Budgetary fairness, supervisory trust, and the propensity to create budgetary slack: Testing a social exchange model in a government budgeting context. Advances in Accounting Behavioral Research 2007, 10:159-182.
114. Steelman L.A., Levy P.E., Snell A.F. The feedback environment scale: Construct definition, measurement, and validation. Educational & Psychological Measurement 2004, 64:143-164.
115. Stevens D.E. The effects of reputation and ethics on budgetary slack. Journal of Management Accounting Research 2002, 14:153-171.
116. Tang T.L.-P., Sarfield-Baldwin L. Distributive and procedural justice as related to satisfaction and commitent. SAM Advanced Management Journal (07497075) 1996, 61:25-31.
117. Taylor M.S., Tracy K.B., Renard M.K., Harrison J.K., Carroll S.J. Due process in performance appraisal: A quasi-experiment in procedural justice. Administrative Science Quarterly 1995, 40:495-523.
118. Thibaut J., Walker L. Procedural justice. A psychological analysis 1975, Erlbaum, Hillsdale, NJ.
119. Törnblom K.Y., Vermunt R. An integrative perspective on social justice. Distributive and procedural fairness evaluations of positive and negative outcome allocations. Social Justice Research 1999, 12:39-64.
120. Tyler T., Degoey P., Smith H. Understanding why the justice of group procedures matters: A test of the psychological dynamics of the group-value model. Journal of Personality & Social Psychology 1996, 70:913-930.
121. Tyler T.R. Conditions leading to value-expressive effects in judgments of procedural justice. A test of four methods. Journal of Personality and Social Psychology 1987, 52:333-344.
122. Tyler T.R. The psychology of procedural justice. A test of the group-value model. Journal of Personality and Social Psychology 1989, 57:830-838.
123. Tyler T.R., Blader S.L. Cooperation in groups: procedural justice, social identity, and behavioral engagement 2000, Psychology Press, Philadelphia, PA.
124. Tyler T.R., Lind E.A. A relational model of authority in groups. Advances in Experimental Social Psychology 1992, 115-191. Academic Press, Vol. 25. M.P. Zanna (Ed.).
125. Tyler T.R., Rasinski K.A., Spodick N. The influence of voice on satisfaction with leaders: Exploring the meaning of process control. Journal of Personality and Social Psychology 1985, 48:72-81.
126. Ugras Y.J. Factors affecting allocation of noncontrollable costs for performance evaluation use: A survey. Advances in Management Accounting 1994, 3:255-278.
127. Umapathy S. Current budgeting practices in US industry 1987, Quorum, New-York, NY.
128. Van der Stede W.A. The relationship between two consequences of budgetary controls: Budgetary slack creation and managerial short-term orientation. Accounting, Organizations & Society 2000, 25:609-622.
129. Vancil, R. F., & Buddrus, L. E. (1979). Decentralization: Managerial Ambiguity by Design: Dow Jones-Irwin.
130. Viswesvaran C., Ones D.S. Examining the construct of organizational justice. A meta-analytic evaluation of relations with work attitudes and behaviors. Journal of Business Ethics 2002, 38:193-203.
131. Wentzel K. Do perceptions of fairness mitigate managers' use of budgetary slack during asymmetric information conditions?. Advances in Management Accounting 2004, 13:223-244.
132. Whitener E.M., Brodt S.E., Korsgaard M.A., Werner J.M. Managers as initiators of trust: An exchange relationship framework for understanding managerial trustworthy behavior. Academy of management. The Academy of Management Review 1998, 23:513-530.
133. Young S.M. Participative budgeting: The effects of risk aversion and asymmetric information on budgetary slack. Journal of Accounting Research 1985, 23:829-842.