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Journal of Management Control

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04.02.2020 | Original Paper

A strategy map’s effect on the feedback that middle managers pass along to upper management

verfasst von: Brian D. Knox

Erschienen in: Journal of Management Control | Ausgabe 4/2020

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Abstract

Feedback from lower-level employees helps upper management know when a strategy revision is necessary. Middle managers have significant control over upper management’s access to lower-level employee feedback because they decide whether to pass along that feedback when they receive it. A strategy map may help mitigate bias in these middle managers’ feedback reporting decisions. In my experiment, participants act as middle managers who receive one of two types of lower-level employee feedback: positive feedback or negative feedback. Without a strategy map, participants over-report positive feedback, under-report negative feedback, and exhibit motivated reasoning toward negative feedback. With a strategy map, participants over-report positive feedback less, under-report negative feedback at the same rate, and their motivated reasoning against negative feedback no longer affects their reporting willingness. Thus, a strategy map could help de-bias some of the feedback middle managers pass along to upper management.

Vorheriger Artikel A long-term bibliometric analysis of journals influencing management accounting and control research

Nächster Artikel Debiasing escalation of commitment: the effectiveness of decision aids to enhance de-escalation

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Strategy maps are part of the balanced scorecard, a framework that organizes strategic goals and performance measurements into three non-financial categories and one financial category (Kaplan and Norton 2000).

This is sometimes called double-loop feedback, i.e. feedback about both the implementation of the strategy and the validity of the strategy’s underlying assumptions. Firms that do not examine their strategy’s underlying assumptions can drift off course considerably even while faithfully implementing the firm’s strategy (see Campbell et al. 2015).

As explained in Sect. 3, I ask this question twice: in a relatively informal setting and then again in a relatively formal setting.

For much of this paper, I focus on ingratiation behavior in response to subjective performance measures because such measures amplify and formalize the value of ingratiation. Even so, I acknowledge that subjective performance measures are not the only reason middle managers might try to ingratiate themselves to upper management. Middle managers likely also value a wide variety of informal favors from upper management, including recommendations for future positions, help with building their professional network, and self-image maintenance or validation.

Demographic measures generally do not differ between conditions, with p values > 0.24 two-tailed for all but one variable: gender. Gender does not differ significantly between strategy map conditions (p > 0.18, two-tailed) but does vary significantly between feedback conditions (p = 0.04, two-tailed). As a supplemental test, I add an indicator variable for gender (to control for potential gender differences) to my main statistical test of H1 and to my mediation analysis related to H1 (as reported later in Sect. 4). These H1-related results are unchanged in direction and significance, and the gender indicator variable itself is non-significant. As such, it is unlikely that gender differences drive my results.

To avoid the risk of a participant being exposed to both between-subject strategy map conditions, I segregate my six experimental sessions by strategy map manipulation (i.e. participants in an experimental session are either all in the strategy map condition or all in the non-causal list condition). This is necessary because of the highly visual nature of the strategy map manipulation and the risk that a participant might even momentarily glance at another participant’s screen and then be able to guess the manipulation. I also space participants far enough apart in the computer lab and supervise them closely enough to materially eliminate the risk that participants are exposed to both between-subject feedback type conditions (this manipulation is in-text and takes much longer to be exposed to).

Price et al. (2017) suggest that within-subject studies are the default for psychology studies because of their greater control and statistical power (see also Maxwell et al. 2017, 741).

Participants assume the role of a newly hired manager, and I provide them with a new strategy from the CEO. This way participants do not need to assume what prior beliefs they might have had earlier in the scenario, which otherwise could create confounding motivated reasoning-related behavior (see Cheng and Humphreys 2012 and Tayler 2010).

I do not vary the order of the reporting setting. All participants answer the reporting willingness question in the informal reporting setting first and in the formal reporting setting second. This, again, is to maintain realism in a high-context experimental setting (see Haynes and Kachelmeier 1998). Counterbalancing the order of my within-subject conditions would create an excessively artificial setting. It would be exceptionally rare for a middle manager in practice not to have an opportunity to informally pass along feedback at some point before a formal strategy review meeting, especially given the instantaneous nature of modern global communication. An experimental setting where the formal reporting setting precedes any opportunity for informal reporting could lead participants to react in unusual ways that are unrelated to the underlying psychological constructs of interest.

There are abundant examples of this from experimental accounting research. For example, Cardinaels (2016) pools results across periods and “the reporting period is treated as a within-subject effect” (56). Similar indicator variables also account for within-subject variation in Kuang and Moser’s (2009) analysis (see their footnote 10).

When I re-run my main tests for H1 through H3 (see Sects. 4’s Tables 2 Panel A, 3 Panel A, and 4) with an added interaction term between reporting setting and the hypothesized predictor, I find no significant reporting setting interactions (p > 0.19 one-tailed for all such interaction terms).

I only ask participants these questions as they relate to their reporting willingness in the formal setting. I do this to reduce noise that might arise from trying to differentiate their thoughts between two very similar reporting willingness questions (especially since participants would not know I plan to ask them to recall these thoughts later). I expect the general direction of ingratiation intention for reporting willingness in the formal setting to be mostly comparable to what the direction would be for reporting willingness in the informal setting, although the magnitude might be greater because of the increased impression management stakes in the formal setting.

These questions include upper management and peers, as inspired by one of the questions that Webb et al. (2010) use to measure impression management intentions. It also fits with the setting in which I ask the questions. The public nature of a formal strategy evaluation meeting means one can impress secondary targets, such as peer middle managers. Peers’ impressions can be important. Peers can play an indirect role in subjective performance measures (by sharing their impressions with upper management), they can help one’s objective performance (through cooperation and teamwork), and they might be promoted to the upper management team in the future. I have no reason to expect the direction of ingratiation intentions to be substantially different based on the target: participants likely want to impress the CEO and peer middle managers in much the same way.

Even though no hypothesis test includes responses to my stage five question about participants’ willingness to give a negative performance review to the branch manager providing the feedback, it is worthwhile to briefly describe results from this question in this footnote. The question asks participants’ agreement that “If [they] reviewed the performance of the branch manager that reported the trend, [they] would rate it negatively.” I phrase the question this way because I assume participants will naturally gravitate toward leniency (see Bol 2008, 12). I ask participants’ level of agreement on a scale from 1 (strongly disagree) to 5 (strongly agree). Mean (standard deviation) response is 1.85 (1.03).

I do not ask a manipulation check question related to the strategy map manipulation.

These two-sample t-tests use 61 participant-level observations rather than 122 reporting willingness-level observations.

I use one-tailed tests for all directional expectations (two-tailed tests otherwise). This is common practice in experimental accounting research (e.g., Kelly et al. 2017, 172). One-tailed significance testing “makes sense when we have good reason to expect the sample mean will differ from the hypothetical population mean in a particular direction” (Price et al. 2017, Chapter 13.2 emphasis added).

I choose regression over ANOVA because some predictors are continuous rather than categorical (see supplemental tests of H1, H2, and H3). Cobb (1998) recommends regression over ANOVA in cases where predictors are continuous. Keeping statistical tests consistent across hypotheses makes the overall results more readable. So, I use regression for hypothesis tests that have only categorical predictors as well.

Baron and Kenny’s (1986) procedure has been criticized over the years (see Zhao et al. 2010). First, it has been criticized for being too low-powered and ignoring indirect effects. This is less of a concern in this case, given that I find significant effects using their procedure. Second, Baron and Kenny’s last step simply labels the mediation “partial” or “complete” based on the significance of the direct effect in the final regression. Critics consider this labelling simplistic. They focus more on the significance of the indirect path in its own right, without worrying about how “complete” the mediation is. To test the indirect pathway’s significance, i.e. feedback type to ingratiation intention to reporting willingness, I perform a Sobel test, which returns a significant result (z = − 2.22, p = 0.01 one-tailed).

The effect of feedback type on ingratiation intention is stronger for one of the questions that make up ingratiation intention than the other. Feedback type has a significant negative effect on participants’ responses about their hope “to impress” (t = − 3.24, p < 0.01 one-tailed) and a non-significant positive effect on participants’ responses about their hope “not to upset” (t = 1.45, p = 0.08 one-tailed).

The effect of strategy map on ingratiation intention does not appear to be specific to either of the questions that make up ingratiation intention. Strategy map has a non-significant negative effect on participants’ responses about their hope “to impress” (t = − 1.32, p = 0.10 one-tailed) and a non-significant positive effect on participants’ responses about their hope “not to upset” (t = 1.18, p = 0.12 one-tailed).

To test the indirect pathway’s significance, i.e. strategy map to ingratiation intention to reporting willingness, I perform a Sobel test, which returns a significant result (z = − 2.03, p = 0.02 one-tailed).

H2 and H3 could also be conceptualized together as predicting a main effect for feedback type and an interaction term for strategy map in a single regression. However, when I test the two hypotheses together like this, the interaction term is not significant (p = 0.21 one-tailed). This could be due to the lack of a significant H3 effect.

Through a two-sample t-test among participants in the negative feedback condition, I find that the moderator, strategy map, is not significantly correlated with perceived strategy ineffectiveness (p = 0.45 two-tailed). The two variables are also uncorrelated across the entire sample of participants (p = 0.25 two-tailed).

Through a two-sample t-test among participants in the negative feedback condition, I find that the moderator, strategy map, is not significantly correlated with reporting time (p = 0.49 two-tailed). The two variables are also uncorrelated across the entire sample of participants (p = 0.59 two-tailed).

I find no evidence that a strategy map affects the tendency to give a negative performance review to the branch manager providing negative feedback (p = 0.33, one-tailed). My supplemental tests of motivated reasoning and H3 (see Table 5) are still supported if I add ingratiation intention as a predictor of reporting willingness. Only one hypothesis-testing coefficient differs in direction or significance: when I add ingratiation intention, the coefficient for perceived strategy ineffectiveness moves just outside of standard significance levels (z = − 1.61, p = 0.054 one-tailed). Simple effects regressions are unchanged in direction and significance when I add ingratiation intention.

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Titel: A strategy map’s effect on the feedback that middle managers pass along to upper management
verfasst von: Brian D. Knox
Publikationsdatum: 04.02.2020
Verlag: Springer Berlin Heidelberg
Erschienen in: Journal of Management Control / Ausgabe 4/2020
Print ISSN: 2191-4761
Elektronische ISSN: 2191-477X
DOI: https://doi.org/10.1007/s00187-020-00293-1

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