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AN EXPERIMENTAL INVESTIGATION OF THE INTERACTIONS AMONG COMBINATIONSOF FORMAL MECHANISMS AND SOCIAL NORMSBART DIERYNCKKU LeuvenFILIP ROODHOOFTVlerick Leuven Gent Management SchoolThe authors are grateful for the helpful comments of Eddy Cardinaels, Margaret Christ, Henri Dekker, Stijn Masschelein,Kristy Towry, Alexandra Van den Abbeele, Sofie Vandenbogaerde, Wim Van der Stede, Luk Warlop, Sally Widener, MarcWouters, participants at the EAA Doctoral Colloquium 2008, the ENROAC Summer School 2008, the New Directions Conferencein Management Accounting 2008, the EAA Annual Conference 2009, the AAA Annual Meeting 2009, and the Conference onPerformance Measurement and Management Control 2009.Bart Dierynck - Accounting, Finance and Insurance, Katholieke Universiteit Leuven. Naamsestraat 69, B-3000 Leuven,Belgium. E-mail: bart.dierynck@econ.kuleuven.be. Bart Dierynck gratefully acknowledges financial support from the ResearchFoundation Flanders (FWO) and from the Limperg Institute.Filip Roodhooft - Accounting, Finance and Insurance, Katholieke Universiteit Leuven and Accounting & Finance, Vlerick LeuvenGent Management School. Naamsestraat 69, B-3000 Leuven, Belgium. E-mail: filip.roodhooft@econ.kuleuven.beContact:Filip RoodhooftVlerick Leuven Gent Management SchoolPhone: ++32 16 24 88 36Fax: ++32 16 24 88 00E-mail: Filip.Roodhooft@vlerick.com2
ABSTRACTEmployees often make decisions that involve a trade-off between improving the performance of theown business unit or department and improving overall firm performance. Previous research hasshown that such decisions are shaped by formal mechanisms such as incentive and informationsystems as well as by the descriptive social norms of the firm. This study explicitly recognizes thatemployees are subject to multiple formal mechanisms and investigates a specific aspect of acombination of formal mechanisms, namely the extent to which each formal mechanism motivatesemployees to act in the firm’s best interest. Relying on theory from social psychology, wehypothesize that (1) combinations in which not all formal mechanisms motivate employees to act inthe firm’s best interest (i.e. misaligned combinations) lead to a lower degree of employee decisionsthat are in line with the firm’s best interest than when all formal mechanisms motivate employees toact in the firm’s best interest (i.e. aligned combinations) and (2) descriptive social norms will driveemployee decisions in case of misaligned combinations but not in case of aligned combinations. Theresults of our experiment are consistent with these hypotheses. Our results contribute to the streamof research that investigates interactions between formal mechanisms and social norms by explicitlytaking into account that firms implement multiple formal mechanisms and by investigating the roleof a typical characteristic of a combination of formal mechanismsKeywords: formal mechanisms, social norms, alignment, firm performance3
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Page 11 and 12: Our theoretical reasoning assumes t
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Page 23 and 24: REFERENCESAnand, G., P.T. Ward, and
Page 25 and 26: Ivens, B.J., C. Pardo, and A. Tunis
Page 27 and 28: Wouters, M., J.C. Anderson, and F.
Page 29 and 30: TABLE 2: Quintile Distribution of t
Page 31 and 32: TABLE 4:Hypothesis 2: Degree of Fir
Page 33 and 34: FIGURE 1:Expected EffectsFigure 1 s
Page 35 and 36: FIGURE 3:Hypothesis 2: Degree of Fi
Page 37: APPENDIX 1Panel A: Information syst

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