What Do You Recommend? The Effects of Communication on Misreporting in Autonomous Teams

51 Pages Posted: 11 Feb 2022 Last revised: 26 Dec 2023

See all articles by Anna Ressi

Anna Ressi

WHU - Otto Beisheim School of Management

Daniel Schaupp

WHU - Otto Beisheim School of Management

Victor van Pelt

WHU - Otto Beisheim School of Management

Date Written: December 4, 2023

Abstract

Many firms have started giving teams greater freedom in determining how they organize and report their work. This study examines how communication drives (dis)honest reporting in such autonomous teams. Through a series of three experiments, we analyze how team members use communication to influence each other and steer their team’s reporting decisions. Our first two experiments show evidence of an asymmetric effect of communication on honesty: while the communication of initially dishonest team members infect initially honest team members, the latter fail to discipline the former, resulting in a dishonesty shift. In the third experiment, we investigate whether and how the social distance between the firm’s owners and team members might influence the magnitude of the dishonesty shift. Our results indicate that when social distance is reduced, the dishonesty shift vanishes. Jointly, our findings are consistent with social norm theory, which predicts that communication can increase team misreporting depending on the salience of different situational cues. Our study offers various contributions to the accounting ethics and participative budgeting literature. It reveals the process of how communication can increase the collective dishonesty in teams and ways how firms can attenuate it.

Keywords: Misreporting, teams, communication, honesty, budgetary slack

JEL Classification: C92, D91, M41, M51

Suggested Citation

Ressi, Anna and Schaupp, Daniel and van Pelt, Victor, What Do You Recommend? The Effects of Communication on Misreporting in Autonomous Teams (December 4, 2023). Available at SSRN: https://ssrn.com/abstract=3937303 or http://dx.doi.org/10.2139/ssrn.3937303

Anna Ressi

WHU - Otto Beisheim School of Management ( email )

Burgplatz 2
Vallendar, 56179
Germany

Daniel Schaupp

WHU - Otto Beisheim School of Management ( email )

Burgplatz 2
Vallendar, 56179
Germany

Victor Van Pelt (Contact Author)

WHU - Otto Beisheim School of Management ( email )

Burgplatz 2
Vallendar, 56179
Germany

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