Critique on the “Manager Effects” Research and Implications for Management Accounting Research

Abernethy, Margaret A.; Wallis, Mark

doi:10.2308/jmar-52030

Cited by 43 publications

(36 citation statements)

References 217 publications

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“…Substantial evidence supports the idea that managers matter to the performance of the firm (Abernethy and Wallis 2018;Adams et al 2014;Bertrand and Schoar 2003;Graham et al 2013). What successful managers do to improve performance is less well understood (Bandiera et al 2011).…”

Section: Prior Literature and Hypothesis Developmentmentioning

confidence: 98%

Expertise and Discretionary Bonus Decisions

2020

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We examine the association between managers' expertise and their discretionary bonus decisions in a hospital setting. We hypothesize that high-expertise managers make decisions that encourage cooperation among their subordinates. However, low-expertise managers cannot do so because their lower levels of knowledge, experience, and domain expertise prevent them from having sufficient personal influence to persuade other professionals to cooperate. We find that high-expertise managers make two types of bonus decisions: (1) keep a smaller share of the bonus pool than what they are entitled to retain and (2) allocate the remainder to subordinates more evenly after adjusting for the underlying heterogeneity in their productivity. We also find evidence that high-expertise managers whose bonus decisions reflect their support for cooperation have higher department performance than all other managers.

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Section: Prior Literature and Hypothesis Developmentmentioning

confidence: 98%

Expertise and Discretionary Bonus Decisions

2020

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“…The entrepreneurial orientation of the owner/manager in start-ups and SMEs influences the type of decisions that are made in the company (Abernethy et al, 2010;Pl€ ockinger et al, 2016;Abernethy and Wallis, 2019). Particularly regarding the implementation of accounting systems (Davila and Foster, 2005;Ng et al, 2013;Pl€ ockinger et al, 2016).…”

Section: Company Sizementioning

confidence: 99%

“…Hand in hand with education, age is one of the personal characteristics of owners/managers that impact the design and use of accounting systems (Pl€ ockinger et al, 2016;Abernethy and Wallis, 2019). Research based on the upper echelon theory and the manager effects have found that younger, less tenured CFOs are more prone to use accounting tools (Pavlatos, 2012).…”

Section: Company Sizementioning

confidence: 99%

Determinants of the use of accounting systems in microenterprises: evidence from Chile

Ruiz

Collazzo

2021

JAEE

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PurposeThe purpose of this research is to contribute to knowledge-building on microenterprises in emerging economies, by assessing the determinants that drive their use of accounting systems.Design/methodology/approachA probabilistic model was developed to determine the likelihood that a micro-firm would adopt an accounting registry system as a function of a series of contingencies and personal characteristics of their owners/managers. Data from the Microentrepreneurship Survey (EME), from the National Institute of Statistics of Chile for 2017 was used.FindingsThe findings suggest that access to external funds, the size and the use of technology strongly influence micro-firms' adoption of accounting systems.Research limitations/implicationsDespite the richness and scope of the data, direct measurements of entrepreneurial orientation and environmental uncertainty, both central variables of the contingency theory, were missing. Hence, duly justified proxies were applied. It is also likely that there would be other variables that also influence the probability of using accounting tools.Practical implicationsThe study contributes to a better understanding of microenterprises, and the factors that determine the use of accounting systems. The results highlight that public policies aimed at fostering microenterprises should facilitate access to technology and external funds. Consistent with previous studies, the authors’ findings highlight the importance of training owner/managers on issues related to their business.Originality/valueThis paper contributes to theory by arguably being the first study to confirm that contingency theory does explain the adoption of accounting systems in microenterprises in emerging countries.

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“…() measure. While Demerjian et al's measure has been used repeatedly in the “manager effects” literature, it has several limitations (see Abernethy and Wallis ). It is difficult to use this measure as an individual level variable because by construction it captures “management efficiency” that includes other senior management within the firm .…”

Section: Research Design and Data Descriptionmentioning

confidence: 99%

“…There is a debate in the “manager effects” literature as to whether it is a “manager effect” or a firm effect. However, it has been difficult to separate out the different effects (see Abernethy and Wallis for a review of the literature). Similarly, some have cast doubt on the importance of social capital on firm value as the empirical models typically used in prior research have not been able to separate the impact of CEO social capital on firm value from the effects of firm‐level characteristics (Tian et al ).…”

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confidence: 99%

The Relation between Strategy, CEO Selection, and Firm Performance

Abernethy

Kuang

Qin

2019

Contemporary Accting Res

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We examine whether a firm's strategic priorities influence its selection of a new CEO and what conditions enable such an appointment to add value to the firm. More specifically, this study investigates the value‐adding effect when prospector firms (i.e., those pursuing a prospector‐type strategy) select a CEO with high social capital. We argue that uncertainty, driven by a firm's strategy, will determine the decision to select a CEO with high social capital; such CEOs can use their networks to mitigate the uncertainty and thus can be valuable to the firm. However, prior research indicates that CEOs with high social capital can engage in behavior detrimental to firm value. To mitigate the potential for this to occur, we assess whether corporate governance can play a role in prospector firms who appoint CEOs with high social capital. Drawing on archival data of CEO successions over a 14‐year period, we find that prospector firms have greater incentives to appoint CEOs with high social capital. We also find that prospector firms who appoint a CEO with high social capital improve their performance. Furthermore, the value‐adding effect of this selection choice is stronger in prospector firms with good corporate governance.

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Critique on the “Manager Effects” Research and Implications for Management Accounting Research

Cited by 43 publications

References 217 publications

Expertise and Discretionary Bonus Decisions

Expertise and Discretionary Bonus Decisions

Determinants of the use of accounting systems in microenterprises: evidence from Chile

The Relation between Strategy, CEO Selection, and Firm Performance

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