The Behavioral Effects of Remote Work on Budget Reporting under Managers’ Approval Authority in Hierarchical Organizations

• In Event: Social Interactions Across Firm Hierarchies

Abstract

We experimentally investigate the behavioral effects of the remoteness of hierarchical work settings (owners, managers, and employees) on employees’ and managers’ budget reporting behavior when managers hold the authority to approve or reject employees’ reports. The remoteness of work settings influences perceived psychological distance from the reporting task, which affects the abstractness/concreteness of individuals’ construal level and, in turn, their decision making. When contemplating budget reports under managers’ approval authority, employees are more likely to focus on moral values if the distance from the reporting task is far (remote settings) than if the distance is near (non-remote settings). Similarly, when exercising approval authority, managers may have higher levels of empathy toward owners in remote settings than in non-remote settings. Consistent with our theory, experimental results show that employees report more truthfully when approval authority is present than when it is absent, but only in remote work settings. Managers report more truthfully when they hold approval authority than when they do not hold the authority, again only in remote work settings. We discuss the implications of our findings for research and practice.

Authors

• Heba Yousef M. Abdel-Rahim, University of Toledo

• Jason Kuang, Georgia Institute of Technology

• Jeremy Lill, University of Kansas