The effects of the incentive systems and organizational culture on strategy surrogation / Kazeem Olalekan Akinyele.

Akinyele, Kazeem Olalekan (2019) The effects of the incentive systems and organizational culture on strategy surrogation / Kazeem Olalekan Akinyele. Asia-Pacific Management Accounting Journal (APMAJ), 14 (1). pp. 219-245. ISSN 2550-1631

Abstract

The purpose of this study was to investigate the impact of an important aspect of an organizational context, specifically organizational culture, and different types of compensation schemes on strategy surrogation. Strategy surrogation occurs when managers focus on the measures in the strategic performance measurement systems (SPMS) on which they are compensated and completely or partially lose focus on the overall strategic objectives of the organization. This study utilized a 2x2 between-participants experimental design that manipulates organizational culture (control-dominant vs. flexibility-dominant) and the type of compensation scheme (fixed pay vs. pay-for-performance). The study was conducted online with 80 participants from the Amazon Mechanical Turk (MTurk) as proxies for managers. The results show that employees operating under a control-dominant culture do not surrogate more than employees operating under a flexibility-dominant culture. Additionally, the type of organizational culture does not moderate the relationship between incentive systems and strategy surrogation. However, employees operating under a pay-for-performance compensation scheme significantly surrogate more than employees operating under a fixed pay compensation scheme. The study contributes to the incentives and organizational culture literature as well as strategy surrogation research by examining institutional factors that may inhibit or exacerbate surrogation. Additionally, the study contributes to the judgment and decision-making literature by highlighting employees’ decision-making outcomes under different compensation schemes.

Metadata

Item Type: Article
Creators:
CreatorsID Num. / Email
Akinyele, Kazeem Olalekanakinyelk@uwosh.edu
Subjects: H Social Sciences > HD Industries. Land use. Labor > Management. Industrial Management > Organization
H Social Sciences > HD Industries. Land use. Labor > Management. Industrial Management > Organizational behavior. Corporate culture
Divisions: Universiti Teknologi MARA, Shah Alam > Accounting Research Institute (ARI)
Journal or Publication Title: Asia-Pacific Management Accounting Journal (APMAJ)
Journal: UiTM Journal > Asia-Pacific Management Accounting Journal (APMAJ)
ISSN: 2550-1631
Volume: 14
Number: 1
Page Range: pp. 219-245
Item ID: 29372
Uncontrolled Keywords: Organizational culture, Incentive systems, Strategy surrogation
URI: http://ir.uitm.edu.my/id/eprint/29372

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