Social Dynamics of Justice: How the Ex-Ante and Ex-Post Justice Interplay with Formal and Informal Elements of Management Control Systems

24 Pages Posted: 14 Dec 2014

See all articles by Josep M. Rosanas

Josep M. Rosanas

University of Navarra - IESE Business School

Natalia Cuguero-Escofet

University of Navarra, IESE Business School

Date Written: October 1, 2013

Abstract

Management control systems (MCSs) are used by organizations to try to make sure that their goals are accomplished. MCSs are used to set goals and objectives, to measure accomplishments and to reward or punish people according to results. In this chapter, we argue that the social dynamics associated with MCSs vary according to whether or not justice is embedded in the way the systems are designed and used. We build on the model proposed by Cugueró-Escofet and Rosanas (2013), which shows that both formal and informal justice help to fuel the social dynamics of the design and use of MCSs in order to strive for better alignment between individuals and organizations. Afterward, we propose two contributions made by this model. The first one involves showing that separating ex-post and ex-ante justice, and separating ex-ante justice into formal and informal justice, can add to our current understanding of the social dynamics of justice. The second involves looking into the possible effects that different states of interest alignment can have in terms of creating short-term and long term-term fairness. We close by showing the possible conclusions that can be derived from our analysis, which are important in terms of research and to the practice of organizational justice. We include possible proposals for future empirical validation of the model and also possible cautions when using ex-post fairness perceptions as a tool to look into the ex-ante formal and informal justice of MCSs.

Keywords: organizatinal justice, fairness, transfer pricing, goal congruence, management control systems

JEL Classification: M14, M15, M41

Suggested Citation

Rosanas, Josep M. and Cuguero-Escofet, Natalia, Social Dynamics of Justice: How the Ex-Ante and Ex-Post Justice Interplay with Formal and Informal Elements of Management Control Systems (October 1, 2013). IESE Business School Working Paper No. WP-1073-E, Available at SSRN: https://ssrn.com/abstract=2537623 or http://dx.doi.org/10.2139/ssrn.2537623

Josep M. Rosanas

University of Navarra - IESE Business School ( email )

Avenida Pearson 21
Barcelona, 08034
Spain
34 932534200 (Phone)
34 932534343 (Fax)

Natalia Cuguero-Escofet (Contact Author)

University of Navarra, IESE Business School

Avenida Pearson 21
Barcelona, 08034
Spain

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