Management Accounting Section Midyear Meeting

Role of Team Identity and Transactive Memory in Team Effectiveness

• In Event: Experiments

Abstract

Effective design of strategic performance measurement systems (PMS) such as the balanced scorecard (BSC) is critical for a firm’s long-term competitive advantage. Design of such PMS often occurs in multi-functional teams. We examine how team affective processes such as team identity can influence team cognition and thereby lead to more effective BSC design, even in the setting of well-established teams. We use the theory of transactive memory system (TMS) and social identity theory. A TMS refers to a shared team memory system that collectively encodes, stores, and retrieves knowledge. We posit that while team identity will influence BSC design outcomes, such teams will also develop a TMS, which in turn will mediate the relation between team identity and design outcomes. Experimental results from a sample of 104 middle-level managers working in 18 established teams indicates that stronger team identity leads to higher BSC design effectiveness. This result is partially mediated by the influence of team cognitive processes such as TMS. We unpack the three constituent dimensions of TMS – namely credibility, specialization, and coordination – and examine the impact of each dimension on the team identity and design effectiveness relationship. While team credibility and specialization positively mediate the relation between team identity and PMS design effectiveness, higher coordination has a negative influence on PMS design effectiveness. Our research contributes to an understanding of the micro-foundations of the factors driving effective PMS design.

Authors

• Aishwarrya Deore, Michigan State University

• Ranjani Krishnan, Michigan State University

• Xue Yang, Michigan State University