The Effects of Comprehensive Information Reporting Systems and Economic Incentives on Managers' Time-Planning Decisions

Abstract

Recent innovations in management control systems, such as the Balanced Scorecard, are supposed to influence managers to redirect their attention among multiple objectives and areas. Extending prior studies that have examined behavior in only a single area, this study experimentally examines how comprehensive control systems influence managers as they allocate their time among multiple areas of responsibility. The results show that managers do not plan increases in their working week in response to increased monitoring or to performance-based incentives, but rather they shift their time from areas that are not monitored or rewarded to areas that are. The results support Kaplan and Norton's assertion that the Balanced Scorecard can be used to influence the way managers allocate their attention between organizational objectives.