"The Missing Link between Corporate Performance Measurement Systems and Chief Executive Officer Incentive Plans" (con A. Dossi, L. Patelli), Journal of Accounting Auditing and Finance, Vol. 25(4), 2010; 531:558

Laura Zoni, Andrea Dossi, Lorenzo Patelli

Risultato della ricerca: Contributo in rivistaArticolo in rivistapeer review

Abstract

While offering a literature review regarding several aspects and pitfalls of performance measurement and compensation literature and practice, we dis- cuss the separation between corporate performance measurement systems (CPMSs) and incentive plans for chief executive officer (CEOIPs). Through performance measurement and compensation, organizations align competing interests and achieve management control. CPMS orient organizational actions toward organizational goals. CEOIP orient CEOs’ actions toward shareholders’ value. Despite the common nature (i.e., management control mechanisms) and, thus, purpose (i.e., influence on actions) of CPMS and CEOIP, both literature and practice neglect the link connecting the two mechanisms. In search for an explanation, we develop a framework that examines the link between CPMS and CEOIP under the three forms of gov- ernance proposed by transaction cost economics—namely, markets, hierar- chies, and hybrids. Whereas in markets and hierarchies the control problem can be solved with a focus on one mechanism (i.e., CEOIP and CPMS, respectively), hybrid governance structures require the integration of CPMS and CEOIP. By exploring areas of integration between CPMS and CEOIP, we generate questions for future research. We expect that the integration between CPMS and CEOIP could benefit the alignment of interests and lead to more effective management control within modern organizations.
Lingua originaleEnglish
pagine (da-a)531-558
Numero di pagine28
RivistaJOURNAL OF ACCOUNTING AUDITING & FINANCE
Volume2010
Stato di pubblicazionePubblicato - 2010

Keywords

  • Executive Compensation
  • Hybrid governance
  • Management Control,,
  • Performance Measurement
  • Transaction cost economics

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