Supplier Development Responsibility and NPD Project Outcomes: The Roles of Monetary Quantification of Differences and Supporting‐Detail Gathering

Firms increasingly rely on suppliers to perform tasks in new product development (NPD). Research has only recently begun to focus on the processes to manage this supplier development responsibility, and has hardly investigated how firms collect and analyze information regarding the cost and performance of alternative supplier offerings. Our study addresses this gap, through a field survey among 144 paired samples of project leaders and cost analysts involved in the same NPD projects. On the basis of literature and qualitative research, we conceptualize a substantive model. We first use a substantive validity assessment to vet the measures for the proposed constructs. We then test the substantive model with structural equation modeling using a multiple‐sample analysis. The results strongly show that monetary quantification of differences and detail gathering play significant roles in successfully leveraging supplier development responsibility. The findings support the hypothesis that the extent of development responsibility that suppliers have leads the development team to a more focused monetary quantification of the differences in alternative supplier offerings. Monetary quantification of differences has a significant, positive effect on the extent of supporting‐detail gathering and on the development speed of the project, whereas supporting‐detail gathering has a significant, positive effect on the product advantage of the new product as well as development speed. These findings are robust across the two functional perspectives. Our study complements the literature on interfirm control and monitoring by demonstrating the effects of selective and focused output controls.     

Why do employees take more initiatives to improve their performance after co-developing performance measures? A field study

Performance measurements may stimulate employee initiatives to improve operational performance, especially when employees themselves participate in the development of their own departmental performance measures. Using the theory of planned behavior, we examine why this occurs in a beverage manufacturing company where we helped bottling line maintenance technicians develop measures about the results of their own work. Our analyses are based on qualitative data gathered at 156 meetings, 34 semi-structured interviews, quantitative performance data from the company's information systems, and quantitative questionnaire data. We found that the participatory development process increased employees’ attitude, perceived social pressure and perceived capability to take initiative. Moreover, the departmental performance improved when the jointly developed performance measures were put to use.     

Does the financial analysts' usage of non-financial information influence the analysts' forecast accuracy? Some evidence from the Belgian sell-side financial analyst

This paper examines whether the use of non-financial information by sell-side financial analysts influences the accuracy of analysts’ forecasts. The research findings, based on a survey of Belgian financial analysts, suggest that financial analysts who use more forward-looking information and more internal-structure information offer more accurate forecasts. Furthermore, the listed Belgian firms examined in this study have improved their non-financial information reporting over time. However, neither the frequency nor the quantity of non-financial information mentioned by financial analysts in their reports appears to have increased over time.     

Identification of critical operational performance measures— a research note on a benchmarking study in the transportation and distribution sector

In this paper the results presented are of an empirical benchmarking study investigating which operational performance measures in the transportation and distribution sector are the most important for financial performance. In the existing literature, the selection of operational performance measures is mostly derived from strategy, using interviews and discussions with management. The main contribution of this paper is to show how an application of benchmarking can identify the relative importance of different operational performance measures and to set standards for those measures.$g0     

A geographic analysis of constituents’ formal participation in the process of international accounting standard setting: Do we have a level playing field?

As a private organization, input legitimacy, being achieved when inputs received reflect the opinions of all stakeholders involved, is a key issue for the IASB’s acceptance as global standard setter. To study this input legitimacy, this paper examines the evolution of constituent participation in international accounting standard setting in terms of geographic diversity over the period 1995–2007 and examines whether biases (due to differences in institutional regimes) or unequal access (due to differences in participation costs) are present in this process. Based on an analysis of 7442 comment letters we observe an increase in participation over time. However, we also find distortions in the geographic representation of constituents, due to differences in the institutional regimes of countries and due to differences in participation costs, proxied by the level of familiarity with the accounting values embedded in IFRS, with the system of private standard setting, and with the English language. These geographic biases in constituent participation might induce criticism in relation to the input legitimacy of the international accounting standard setting process.     

Managing budget emphasis through the explicit design of conditional budgetary slack

Budgetary slack plays an important role in the functioning of budgets in organizations. While theory has found negative as well as positive elements associated with its presence, the empirical literature has interpreted it as being dysfunctional to organizations. In this paper, we present empirical evidence on how a company purposefully budgeted additional financial resources with a motivation intention (Lukka. Budgetary biasing in organizations: Theoretical framework and empirical evidence. Accounting, Organizations and Society 13 (1998) 281–302) to facilitate the managers’ task in achieving the goals of the company. Using quantitative and qualitative data from four logistic sites of a disk drive manufacturer for 24 months, we examine how the company accepted more slack as the demand on business processes increased and goals other than budget targets––in particular, service quality––became harder to achieve. By allowing this practice, headquarters made it clear to local managers that product quality and service were at least as important as meeting budget objectives. We also find that not only was budgetary slack purposefully built during the budgeting process but also in the budgeting system itself through the underlying cost accounting assumptions. The results of this paper provide empirical evidence on the positive aspects of budgetary slack and on the role of cost accounting models used in the budgeting system to facilitate managerial work.     

Why Managers Use Cost Allocations: A Research Note

Using an experimental design, this paper investigates empirically the conditions under which managers use cost allocations for decision-making purposes. The paper focuses on decision-risk in the context of short-term decision-making when most capacity costs are unavoidable. Decision-risk is determined in this paper by a combination of two factors: uncertainty and irreversibility. Cost allocations can serve as a reference point for a decision maker to deal with decision-risk. Three hypotheses are formulated: (1) the combination of both uncertainty and decision irreversibility induces the use of cost allocations. However, (2) certainty or (3) decision reversibility alone are not expected to induce the use of cost allocations. The hypotheses were tested in an experiment, in which senior managers participated. The experimental results supported the hypotheses.     

Methodological Issues in the Design of Online Surveys for Measuring Unethical Work Behavior: Recommendations on the Basis of a Split-Ballot Experiment

In recent years, there has been an increasing interest in unethical work behavior. Several types of survey instruments to collect information about unethical work behavior are available. Nevertheless, to date little attention has been paid to design issues of those surveys. There are, however, several important problems that may influence reliability and validity of questionnaire data on the topic, such as social desirability bias. This paper addresses two important issues in the design of online surveys on unethical work behavior: the response scale for questions regarding the frequency of certain types of unethical work behavior and the location of the background questions in an online survey. We present the results of an analysis of a double split-ballot experiment in a large sample (n = 3,386) on governmental integrity. We found that, when comparing response scales that have labels for all categories with response scales that only have anchors at the end, the latter provided answers with higher validity. The study did not provide support for the conventional practice of asking background questions at the end.     

Developing performance-measurement systems as enabling formalization: A longitudinal field study of a logistics department

This paper reports on a developmental approach to performance-measurement systems (PMS). In particular, we look at characteristics of a development process that result in the PMS being perceived by employees as enabling of their work, rather than as primarily a control device for use by senior management. We will refer to such a PMS as “enabling PMS”. The theoretical part of the study builds on ideas of enabling versus coercive formalization [Adler, P. S., & Borys, B. (1996). Two types of bureaucracy: Enabling and coercive. Administrative Science Quarterly 41 (March), 61–89]; on notions of organizational learning (e.g., [Zollo, M., & Winter, S. G. (2002). Deliberate learning and the evolution of dynamic capabilities. Organization Science 13(3), 339–351]); and on awareness of the incompleteness of performance measures (e.g., [Chapman, C. S. (1997). Reflections on a contingent view of accounting. Accounting, Organizations and Society 22, 189–205; Lillis, A. M. (2002). Managing multiple dimensions of manufacturing performance—An exploratory study. Accounting, Organizations and Society 27, 497–529]). The empirical context entails a mixed-method, 3-year longitudinal study of the logistics department of a medium-sized company in the beverage manufacturing industry. Qualitative data were gathered through interviews, participation in meetings, action research, and review of company documents. We also analyzed two waves of quantitative survey data, gathered from a panel of 42 employees. We find that a development process that is experience-based contributes to the enabling nature of the PMS, as it builds on existing skills, local practices, and know-how on performance measurement to enrich the PMS step-by-step over time. Also, experimentation with specific performance measures was found to enhance the enabling nature of the PMS: testing, reviewing, and refinement of conceptualizations, definitions, data, and presentations of new performance measures. Professionalism was significantly related to positive attitude toward performance measures in our survey data. The results also illustrate that transparency of the PMS itself is key to enabling PMS.