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Research on biases in investment decision-making is indubitably important; however, studies in this context are relatively scarce. Unpacking bias has received attention in the psychological literature yet very little attention from management accounting research. This bias suggests that the perceived probability that an event will occur generally increases when the event's description is unpacked into a disjunction of subevents. The authors hypothesize that for a capital investment decision context, managers' judgement of the probability of a future event depends on whether the event is described as one packed event or is unpacked into several disjoint subevents. Additionally, the authors propose that altering the format of the description of an event's occurrence from percentage values to relative frequencies reduces unpacking bias.

To test the study’s hypotheses, the authors conducted two experiments based on a 3 × 2 mixed experimental design in which manager participants were asked to estimate the failure probabilities of technical systems in the context of an investment decision.

The authors provide evidence that unpacking bias occurs in an investment scenario, which can be characterized as a high-stakes decision context. Changing the format in which probabilities are presented from percentage values to relative frequencies significantly reduces the bias.

Additional instructions did not further reduce unpacking bias.

For investment decisions under uncertainty, performance indicators in management templates should be presented in relative frequencies to improve managerial decision-making. The fact that the authors could not show an additional effect of instructions in management accounting reports indicates that it is challenging for management accountants to reduce the biased decision-making of managers by “teaching” them through the provision of instructions.

The authors contribute to accounting research by illustrating unpacking bias and by deriving a debiasing mechanism in a capital investment decision context.

There is emerging evidence in the accounting literature that investors react negatively to corporate greenwashing. But does that hold for all investors, or do different types of investors react differently? This paper aims to study retail investors’ responses to media reports on corporate greenwashing and how these responses depend upon the investors’ social value orientation. The authors argue that media reporting on corporate greenwashing negatively affects the rationale for allocating funds to firms engaging in greenwashing. The authors also expect this reaction to be stronger for prosocial investors compared to proself investors.

The authors conduct an online experiment with 229 participants representing retail investors in the German-speaking countries.

The results show that retail investors who received media reports on deceptive disclosure invest more funds in the company that does not engage in greenwashing (and less in the firm that engages in greenwashing) than investors who did not receive these reports. The authors’ results provide novel evidence that this effect primarily holds for investors with a prosocial value orientation. Finally, the authors’ data show that lower trust in the firm that engages in greenwashing partially mediates the effect of media reports on investor choices.

The authors provide unique evidence how different types of investors react to media reports on greenwashing. The authors find that moral motives, rather than risk-return considerations, drive investor responses to greenwashing. Overall, these findings support the important function of the media as an intermediary in stock market participation and highlight the pivotal role of individual traits in investors’ responses to greenwashing.

Job markets in the transport and logistics industry are characterized by a scarcity of well-educated junior talent. Employer attractiveness is becoming more important in order to win the most talented junior staff. The purpose of this paper is to investigate how corporate social performance (CSP) profiles of logistics companies influence their attractiveness for job seekers.

In a computerized laboratory experiment, the authors provided 95 students in their final year with job offer data that include general and CSP information about the company, and the job seeker’s potential salary. The authors manipulated how the CSP information was presented and monitored the information accessed during job seekers’ decision-making processes. The authors investigated how information presentation affected choices.

The vast majority of talent acquires CSP information in the pre-decision phase of the judgment, compares this information across companies, and trades off this information with the conditions of employment. The authors find that the ease of comparability of corporate social responsibility (CSR) information, expressed by meaningful indicators of CSP, increased preference for high CSP.

The study enriches existing studies of voluntary disclosure, which argue that voluntary disclosing sustainability-related information can be a tool of impression management.

Companies with a compelling CSP should push for a broadly accepted methodology to benchmark CSP within industry-specific sectors, such as logistics services.

Potential employees demand that companies should consider their social impact on individuals and society as a whole. To remain attractive for employees companies in transport and logistics industry have to cope with a broader scope of expectations.

The authors provide the first analysis on the relevance of CSP information for employer attractiveness in the transport and logistics industry. This research provides insights into the relevance of CSP criteria, information provision, and comparability processes from the perspective of young job seekers.

Many companies use competition for either monetary or non-monetary rewards to induce employee effort. Pitting employees against each other in a competition could come at a thus far insufficiently considered cost of leading to lower employee cooperation. The authors examine how competition for monetary rewards in the form of tournament incentives or non-monetary rewards in the form of standing in uncompensated public rankings affects employee cooperation with former competitors in a subsequent task where the extent of the cooperation does not affect the welfare or social standing of the person deciding to cooperate. The authors hypothesize that competition in the first task negatively affects cooperation in the second task. The authors further predict that competition leads to psychological pressure, which mediates differences in cooperation. The results support the authors’ hypotheses. In addition, the authors find that the decrease in cooperation results from the behavior of low performers, whereas cooperation by high performers is not affected. The findings are important because they show that inducing effort in one dimension leads to an unintended cost in the form of lower cooperation in another dimension. This cost occurs for both types of competition – competition for monetary payoffs and for non-monetary rewards. Ultimately, the size of this cost depends on the marginal benefit from any cooperation of low performers.

This paper aims to examine how balanced scorecard (BSC) users change their judgement processes according to qualitative changes in the BSC. Prior experimental studies have found that decision-makers do not fully adapt their judgements according to changes in financial reports, known as functional fixation. Although previous research has examined functional fixation in several management accounting-related disciplines, the research has not been completely successful in developing a deeper understanding of the cognitive processes that are responsible for the occurrence of this judgemental bias.

To fill this gap, a combination of structural modelling and a process tracing method that monitors participants’ information acquisition to better understand the underlying cognitive processes that affect BSC users’ judgements is used.

Overall, the results indicate that functional fixation is present both from an input–output (structural modelling) and a process tracing perspective. Stable general individual differences, particularly in terms of intuitive versus deliberative preferences in decision-making, influence the probability of functionally fixated behaviour. Additionally, previous findings concerning the over-reliance on financial information in the BSC setting is replicated. Using process data, it was found that BSC users rely more on financial measures than on non-financial measures in the pre-decisional phase of exercising their judgement.

This paper contribute to management accounting research on the BSC by investigating two cognitive biases (functional fixation and overreliance on financial measures) from an input–output and a process tracing perspective.

Managers are confronted with increasing information overload and growing pressure for effective and efficient decision making. The visualisation of data represents a way to overcome this dilemma and to improve management decision quality. The purpose of this paper is to transfer insights from visualisation research to the managerial accounting context and clarify the impact of visualisation on management accounting reports and decision making. The authors deduce implications for behavioural management accounting research, teaching, and business practice from previous findings and the results.

The authors conducted an experiment with students and experienced managers. Participants had to evaluate eight different business units based on four accounts (sales, EBIT, FPY, and delivery reliability). The information the authors provided to the participants was either presented as tables only, or in tables and graphs.

The empirical results show that supplementary graphs improve decision quality, especially within the manager sample but do not affect decision confidence in a performance evaluation task. The authors furthermore find that managers perform poorly when only provided with tables, and they achieve the overall best score when provided with both tables and graphs, whereas students perform similarly in both conditions. The authors additionally show that proficiency affects not only decision quality but also decision confidence.

The results differ from predictions based solely on the cognitive fit model, as the authors found differences in decision quality to be stronger within the group of managers. The cognitive fit model proposes that decision making performance will improve when the problem representation and the decision making task match. Applying the model to a management context, it is obviously insufficient to explain the differences the authors obtained in the experiment. The authors observed that proficiency plays a role in such performance evaluation tasks.

Based on the results, management accountants should analyse the task that needs to be solved with the reported data. By analysing the type of task, accountants can derive the information processing strategy that will most likely be used by executives for problem solving and determine the suitable visualisation format based on the cognitive fit model. Moderate or complex monitoring tasks will presumably be accessed with perceptual information processing. Data should thus be visualised with graphs.

The authors provide empirical evidence that supplementary graphs in management reports improve decision quality but not decision confidence. The authors furthermore illustrate the limits of the explaining power of the cognitive fit model in a management report context. In an extension of cognitive fit theory, the authors argue that proficiency plays a crucial role in performance evaluation tasks. The authors propose a process for visualisation of management reports based on their findings and previous findings.

In management accounting research, the capabilities of Partial Least Squares Structural Equation Modelling (PLS-SEM) have only partially been utilized. These yet unexploited capabilities of PLS-SEM are a useful tool in the often explorative state of research in management accounting. After reviewing eleven top-ranked management accounting journals through the end of 2013, 37 articles in which PLS-SEM is used are identified. These articles are analysed based on multiple relevant criteria to determine the progress in this research area, including the reasons for using PLS-SEM, the characteristics of the data and the models, and model evaluation and reporting. A special focus is placed on the degree of importance of these analysed criteria for the future development of management accounting research. To ensure continued theoretical development in management accounting, this article also offers recommendations to avoid common pitfalls and provides guidance for the advanced use of PLS-SEM in management accounting research.

Because of the importance of accounting information to a manager’s decision-making process, his/her working relationship with his/her supporting management accountant is used as a paradigm of a superior-subordinate working relationship. This paper aims to analyze the drivers of trust in this relationship.

Based on responses from 446 managers, the authors tested a structural equation model for various trust drivers.

The authors found that when management accounting generally has a powerful role in a company, it positively affects the manager’s perceptions of his subordinate’s trustworthiness. Although the absolute level of trust remains stable over time, the influences of the bases of the trust change significantly. Over the long run, perceived trustworthiness fully mediates other trust factors, such as the manager’s trust disposition and the organizational setting, which highlights the importance of the individual trust relationship even for strong and functional superior–subordinate relationships.

Consistent with other studies, the results contain the classic limitations of survey studies. This study investigates the drivers of trust and provides insights into the trust relationship between managers and management accountants. Future studies should verify these findings for other important work relationships.

Trust research has typically focused only indirectly on the relevance of the trust that a superior has in his supporting subordinate. The authors show how these trust drivers intertwine and how their influences shift over time.

On the invitation of the Editor I am publishing in the JOURNAL OF DOCUMENTATION a selection of lists of music publishers' numbers, with an indication of the date of issue of their publications so numbered.