Antecedents and Consequences of Standard-Based Control Systems

Posted: 21 Oct 1996

See all articles by Michael D. Shields

Michael D. Shields

Michigan State University - Department of Accounting & Information Systems

F. Johnny Deng

California State University, Sacramento - College of Business Administration

Yutaka Kato

Kobe University

Date Written: September 1996

Abstract

This paper develops the tests a standard-based control system model which consists of three interrelated controls-participative standard setting, standard-based incentives, and standard tightness-as well as selected antecedents (task variety, task analyzability, information asymmetry) and consequences (job stress and job performance). Drawing primarily on the agency-theory and person-environment fit literatures, six hypotheses are developed. One hypothesis was not tested due to poor measurement reliability. The remaining five hypotheses were tested using structural equation modeling on data collected from a sample of 385 Japanese automobile design engineers. The tests supported four of these hypotheses. The tests indicated that superior-subordinate information asymmetry is positively associated with the use of participative standard setting which, in turn, is positively associated with performance standard slack (=standard-based incentives minus standard tightness). Increases in performance standard slack are associated with decreases in job stress which, in turn, is negatively associated with job performance.

JEL Classification: D23, D82, M40, M46

Suggested Citation

Shields, Michael D. and Deng, F. Johnny and Kato, Yutaka, Antecedents and Consequences of Standard-Based Control Systems (September 1996). Available at SSRN: https://ssrn.com/abstract=2777

Michael D. Shields (Contact Author)

Michigan State University - Department of Accounting & Information Systems ( email )

270 North Business Complex
East Lansing, MI 48824-1034
United States

F. Johnny Deng

California State University, Sacramento - College of Business Administration ( email )

School of Business Administration
Sacramento, CA 95819-6081

Yutaka Kato

Kobe University ( email )

2-1, Rokkodai-cho, Nada-ku
Kobe, 657-8501, 657-8501
Japan

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