Management Accounting Section Midyear Meeting

Identified Motivation and the Asymmetric Effects of Informal Control Systems on Subordinate Behavior

• In Event: Control Systems (Experimental)

Abstract

Due to the limits of formal management control systems (MCS) for tasks with unobservable/non-contractible inputs, firms often preferentially recruit subordinates who exhibit identified motivation (strong perceptions of importance) towards the firm’s mission. While prior literature examines the “crowding out” of identified motivation by formal MCS, less is known about how informal controls asymmetrically affect subordinates both with and without identified motivation. Given the difficulty in preferentially selecting subordinates with identified motivation relative to those without, I seek evidence of an informal control regime that can best utilize subordinates of all motivation levels. Using the frameworks of Self-Determination Theory and Stewardship Theory, I experimentally test subordinates’ goal congruence and subsequent cooperation with the superior under different types of “nonformal communications” (non-binding management guidance). Results confirm that informal controls do not crowd-out identified motivation and improve alignment of amotivated subordinates’ actions to firm objectives.

Author

• Jonathan Kugel, Georgia Institute of Technology