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  • Two Former Illini Doctoral Students Win Honors at 2012 ABO Section Meeting


    10/8/2012

    Justin Leiby (U Florida), won the Outstanding Dissertation Award at the 2012 Accounting Behavior and Organizations (ABO) Section Meeting on Friday, October 6th.  His dissertation committee included Dolores Albarracin (U of Illinois-Psychology), Jasmijn Bol (Director of Research, Tulane), Kathryn Kadous (Emory), Mark Peecher (Chair, U of Illinois), and Brad Pomeroy (U of Illinois).

    Brian White (U Texas–Austin) won the Outstanding Manuscript Award at the 2012 Accounting Behavior and Organizations (ABO) Section Meeting on Friday, October 6th.  Brian began this research project with co-author and former Illinois accountancy faculty member Anne Farrell while completing his doctoral program here at Illinois. 

    ABSTRACTS:

    How Do Consultants Persuade Managers to Adopt Management Control Systems?
    Justin Leiby (U of Florida)

    Management control systems (MCS) are often marketed by consultants who advise managers on the benefits and costs of MCS adoption.  Despite the reliance of managers on consultants for advice about the costs and benefits of MCS adoption—and the substantial performance and control effects of consultants’ advice—research on the adoption and implementation of MCS has ignored the role of the consultant.  This study is the first to examine the consultant’s role in MCS adoption.  Using both field and experimental methods, I predict and find that consultants’ likelihood to advise a manager to adopt an MCS is a joint effect of the manager's competence and the diffusion of the MCS among the manager’s competitors, because these factors trigger persuasion tactics that consultants use to alleviate managers' uncertainty about MCS adoption.  I find that, as the diffusion of an MCS increases, consultants are more likely to advise an MCS to an average manager, but less likely to advise the same MCS to an exceptional manager.  These effects obtain even though firm characteristics and pre-advice strategic risk are held constant. In supplemental analyses, I provide evidence that consultants selectively share different persuasive information with managers, depending on managers’ competence. I also provide evidence that consultants believe that their advice will benefit the manager’s firm on financial and non-financial key performance indicators (KPIs).

    Do Performance-Based Incentives Induce System 2 Processing in Affective Decision-Making Contexts?  fMRI and Behavioral Evidence
    Anne M. Farrell (Miami U), Joshua O. Goh (National Taiwan U) and Brian J. White (U Texas-Austin)

    Prior research finds that managers’ affective reactions to decision contexts may lead to choices that are not in the best economic interests of firm owners. However, these results are generally based on settings in which pay is based on a fixed wage. We predict that performance-based incentive contracts can lead to more economically-desirable choices by managers than fixed wage contracts, and we expect this occurs for reasons beyond only goal-alignment. Relying on theories of dual systems of cognitive processing and knowledge accessibility, we predict that performance-based contracts induce managers to process information more analytically (i.e., to engage in more “System 2” processing), thus reducing the impact of affective reactions on choice. Using a functional magnetic resonance imaging (fMRI) experiment, we assess cognitive processing in the brain and manager choice in the presence and absence of affective reactions to decision contexts, and provide evidence on the impact of a performance-based contract on such processing and choice.

    UIUC College of Business Department of Accountancy