Management Accounting Section Midyear Meeting

Cherry Picking for Self-Enhancement—Comparison between Manager’s KPI Request from Self-Reporting Systems and Management Accountants and the Effect on Decision Quality

• In Event: Performance Measurement II

Abstract

The use of self-service reporting systems (dashboards) increases as firms undergo digital transformation and adopt new enterprise resource planning systems. Dashboards provide managers with features that allow them to individualize and draft their own reports and select important key performance indicators (KPIs). Traditionally, managers request KPIs from management accountants. Today, managers can independently request their desired KPIs by means of dashboards and draft their own reports. The purpose of dashboards is to improve decision-making processes and to ease the workload of management accountants so that they can focus on their role as business partners. In this study, we investigate whether managers’ initial KPI selection for a standard report is different when they request KPIs from a self-reporting software versus a management accountant. We also investigate how KPI selection affects decision quality. Managers’ KPI selection may be biased for self-serving reasons (e.g., maintaining self-esteem) because they want to be perceived as good decision makers when interacting with management accountants. We also investigate the effect of the salience of decision consequences for others on KPI requests and decision quality. Based on motivated reasoning (Kunda 1990), we predict and find that managers request fewer KPIs that reflect a negative future development (threat KPIs) from management accountants than from a self-reporting system. When managers request fewer KPIs that reflect a negative development, the quality of their decisions is reduced. Consistent with existing literature on this topic, we find that maintaining self-esteem is the main driver of this effect. A high salience of decision consequences for others mitigates this effect. Implications for theory and practice are discussed.

Authors

• Sascha Matanovic, Giessen University

• Arnt Woehrmann, University of Giessen