Management Accounting Section Midyear Meeting

Do social missions reduce data-driven decision-making?

• In Event: New Technologies for Management Control

Abstract

Organizations are increasingly emphasizing social missions beyond profits. In this study, we develop theory to suggest that this rising emphasis on social missions can make it more difficult for organizations to develop a data-driven culture by exacerbating employee algorithm aversion. We argue that emphasizing a social rather than a profit-oriented mission will motivate employees to make choices that help others rather than choices that help themselves. In turn, this altruistic motivation will increase employees’ algorithm aversion by making them more averse to the cold, maximization associated with algorithms. We further propose that pay-for-performance will mitigate the negative effect of social mission on algorithm use by crowding out the motivation to help others. To test this theory, we conduct two experiments, one with a hypothetical decision and one with a decision that has real monetary consequences. As expected, emphasizing the social rather than profit mission reduces participants’ reliance on advice from an algorithm relative to their reliance on advice from a human, but this effect is mitigated by pay-for-performance. These findings contribute to our understanding of how social and financial incentives affect employee behavior and suggest that they jointly contribute to algorithm aversion.

Authors

• Razvan S. Ghita, University of Southern Denmark

• Jacob Theodore Zureich, Tilburg University