Cadena de salida del GPS

In seeking to understand the behavioural side-effects of organisations’ attempts to influence achievement of the “what”, pioneering works such as those by Argyris (1952), Lowe and Shaw (1968), Buckley and McKenna (1972), Hopwood (1972) and Otley (1978) criticised the “classic” MC approach for generating behavioural side-effects, and emphasised the human element of MC.

Argyris (1952, 1953) identified several ways in which pressure to achieve budgets may cause tensions in employees (e.g. “I want to achieve my target and contribute to the organisation’s mission, but I can’t achieve my budget if I follow the organisation’s policies”). This type of cognitive tension may result in stress, interpersonal conflict and distrust which, in turn, may cause dysfunctional behaviour such as gaming of performance indicators, reduced effort and poor communications.5 _{The pressure of MCS may also lead to hostility between staff and} line managers, which is counter-productive to fulfilling organisational goals. Argyris’ studies showed a need to complement the technical knowledge of budgeting with knowledge of human behaviour. His work also suggests not only that dysfunctional behaviour is a natural human tendency, causing a need to use controls, but also that using MCS may cause dysfunctional behaviour.

Hofstede (1967) illustrated that the difficulty of budget goals has a non-linear effect on motivation to achieve them: maximal motivation occurs when the difficulty is neither very easy nor very difficult. According to Hofstede (1967), the need for achievement, created by MC attempting to influence the “what”, seems to be a powerful motivation; however, increased motivation may easily be accompanied by pressure, which may disrupt teamwork and lead to undesirable effects like scapegoating and fighting the system. Pressure to achieve the “what” may be accompanied by lower job satisfaction, and may often lead to game-like bargaining between senior management and employees.

Lowe and Shaw (1968) discussed the tendency of managers to manipulate budgetary targets in order to guide workers’ behaviour. During this period, a behavioural perspective on managerial performance evaluation also emerged. Hopwood (1972, 1974) studied the impact of diverse uses of accounting information seeking to influence employees’ behaviour and drive organisational performance. He argued that, when budget measures are used to evaluate performance,

5 _{The term “dysfunctional” is typically used to explain actions in which a subordinate attempt} to manipulate elements of a MCS for his/her own benefit (Jaworski and Young 1992).

subordinates are likely to experience conflictual tension because they are unsure how their behaviour will affect these measures. This conflict may cause stress, demotivation, dissatisfaction with the budgeting process, and dysfunctional behaviours such as gaming (Birnberg et al., 1992). Gaming performance indicators occur when a subordinate select an alternative course action expecting the most favourable personal outcome, regardless of the action that may be most beneficial to the organisation (Lawler and Rhode, 1976). This may happen when a manager attempts to maximise his/her performance on an indicator, even though he/she knows that the indicator is not aligned with the organisation’s objectives (Kerr, 1975). For example, when a promoter is evaluated based on volume of sales, then he/she may increase sales that may lead to lower profitability or that may affect customers’ long-term relation (Jaworski and Young 1992). Another form of gaming may be the creation of budgetary slacks (Jaworski and Young 1992). In this case, a manager hopes that the budget under which his/her performance will be evaluated will be easier to attain. Managers may also build budgetary slacks to protect themselves from environmental uncertainties (Cyert and March, 1963).

Other scholars have similarly argued that MCS focusing mainly on motivating the attainment of the “what” may cause dysfunctional behaviour, such as short-termism (Laverty, 1996; Merchant, 1990), gaming (Jaworski and Young, 1992; Soobaroyen, 2007), conflictual working relationships and decreases in innovation and learning (Argyris, 1977; Emmanuel et al., 1990; Hope and Fraser, 2003a). Hopper and Powell (1985) claim that awareness of these behavioural dysfunctions simply prompted refined measurements and the inclusion of more sophisticated economic and mathematical approaches to transfer pricing and divisional performance measurement, or advice that troublemakers be given more accountancy education (Hopper and Powell, 1985, p.435). Hope and Fraser (2003b, p.2) make a drastic suggestion that budgeting “should be abolished”. They argue that budgets and a “command and control” culture both encourage centralised, hierarchical organisations that prevent agile adjustments to market conditions. They also suggest that budgeting demotivates people and may even encourage unethical behaviour and increase reputational risk (Hope and Fraser, 2003a). Marginson and Ogden (2005, p.436) suggest that, since the work of Argyris (1952, 1953) and as in the title of his (1953) paper, the perspective adopted in the budgeting literature has been “human problems with budgets”.

In parallel, other scholars started to challenge the assumptions about human behaviour behind classic MCS. McGregor (1957) attempted to describe

assumptions about human nature underlying managers’ thoughts and theories on management. He described the conventional view of management beliefs as “Theory X”, in which subordinates are understood as being indulgent, lacking ambition and self-centred. Thus, in the absence of managerial intervention, they will be passive or even resistant to organisational needs. He referred to an alternative view, “Theory Y”, as a set of beliefs that consider people to be hardworking, capable of assuming responsibility and, more importantly, best able to fulfil their own goals by directing their own efforts toward organisational objectives.

To address the limitations of Theory X and critiques of the dysfunctional behaviour caused by MCS, Argyris (1971) proposed a path to drive management and organisational development from Theory X to Theory Y, allowing people to contribute to more active development of individual and organisational well-being. Argyris (1985) later recognised that organisations tend to have Theory X-type assumptions, but that many of these are caused by non-productive habits and defensive routines.6 _{Argyris attempted to identify these non-productive forces so} that managers could eliminate them and thereby increase the human potential to contribute.

Later, Argyris (1990) invited managers to challenge their assumptions, learn to look beyond the symptoms of the problem and analyse the underlying dynamics. Argyris called this “double loop learning”, in which one should: never stop asking “why?” Double loop learning began when managers started challenging underlying organisation policies and objectives. Double-loop learning involves targets’ and rules’ modification. The first loop uses the goals or the organisational rules, the second loop allows their modification. In double loop learning, assumptions underlying current views are questioned and hypotheses about behaviour tested publicly. For Argyris, it is important to be concrete rather than abstract about solutions to problems. Argyris encourages to work on improving communications that will reduce the number of assumptions people make in interpreting directions and actions, and to work at enabling people to really understand each other.