Assessing the Performance of Business Unit Managers
AbstractABSTRACT Using a sample of 140 managers, we investigate the use of various performance metrics in determining the periodic assessment, bonus decisions, and career paths of business unit managers. We show that the weight on accounting return measures is associated with the authority of these managers, and we document that both disaggregated measures (expenses and revenues), and nonfinancial measures play a greater role as interdependencies between business units increase. The results suggest separate and distinct roles for different types of performance measures. Accounting return measures are used to create the proper incentives for managers with greater authority, while disaggregated and nonfinancial measures are employed in response to interdependencies. Copyright University of Chicago on behalf of the Institute of Professional Accounting, 2007.
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Bibliographic InfoArticle provided by Wiley Blackwell in its journal Journal of Accounting Research.
Volume (Year): 45 (2007)
Issue (Month): 4 (09)
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0021-8456
Other versions of this item:
- Bouwens, J.F.M.G. & Lent, L.A.G.M. van, 2006. "Assessing the Performance of Business Unit Managers," Discussion Paper 2006-92, Tilburg University, Center for Economic Research.
- Bouwens, J.F.M.G. & Lent, L.A.G.M. van, 2007. "Assessing the performance of business unit managers," Open Access publications from Tilburg University urn:nbn:nl:ui:12-210600, Tilburg University.
- M41 - Business Administration and Business Economics; Marketing; Accounting - - Accounting - - - Accounting
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