Many corporations use slogans in both external and internal communications to articulate company goals and values. In my research, I explore how psychology enters into the corporate world. I was curious about how corporate slogans can convey organizational goals and affect employee motivation—specifically, their involvement and effort in accounting system improvement. For my dissertation research, I designed an experiment to examine these questions.
To outsiders, the field of accounting might seem black and white. But as a professor of accounting, I know that when a firm designs a management accounting system, this process incorporates all sorts of subjective decisions and value judgments. How are activities defined? Which measures are important to track? What factors should be monitored to predict whether costs will rise or fall? For companies to plan wisely, their management accounting systems must be designed thoughtfully, based on solid assumptions. What’s more, these systems must be revised periodically to reflect changes—such as the availability of natural resources, technological advances, the location of suppliers, or the distribution of customers—in one’s business and the world. If companies don’t update their accounting systems with the times, their projections will stray further and further from actual experience because faulty assumptions underlie the projections.
Thus, we know that well-designed accounting systems are crucial to helping companies reach the goals they articulate in their mission statements and sum up in their slogans. Yet, it isn’t always clear-cut whether it’s time to revise an accounting system, or, once the revisions have begun, when the work is complete. I wondered whether reminding employees involved in an accounting system revision project of company goals specific to the project, by including a slogan alongside feedback concerning their efforts, would motivate them to put more effort into the project. I found that, in some cases, the answer is yes…but it matters whether the employees are focused on the low-level goal of the project (a small, defined task) or the high-level goal of the project (such as manifesting the company’s guiding values), and whether their initial effort is met with success or failure.
For my study, I set up participants (upper-level undergraduate accounting and MBA students) in a lab and asked them to take on the role of a production manager for a manufacturing company. They received information outlining the company’s cost accounting system and its importance, and including the slogan “Better Accounting for Better Decisions” at the top right of the page. (To compare this to some real-world examples, EY uses “Building a better working world” and PwC uses “Building relationships, creating value.”)
This initial information also described the entry of a new competitor into the market, and suggested that revising the company’s accounting system could help determine whether the company would be able to stay profitable while matching the competitor’s lower price for a product both companies make. The production process was made up of three activities. Toward better tracking of manufacturing overhead for the first activity, participants were asked to choose one cost driver from a list that could be tracked using the current accounting system.
After participants made their selections, the experiment generated an accounting feedback report for each participant, indicating whether or not there was a strong correlation between the cost driver the participant chose and changes in manufacturing overhead costs for the first production activity. If the correlation was strong, this meant the participant had succeeded at identifying a useful way to revise the accounting system; if the correlation was weak or nonexistent, this meant the participant was unsuccessful. (These outcomes were chosen at random; whether a participant succeeded or failed had nothing to do with her abilities or which specific cost driver she chose to track.)
Half of the participants received feedback reports that included the slogan “Better Accounting for Better Decisions,” thus reminding them of the project’s high-level goal. The other half received feedback reports without the slogan, making these participants more likely to stay focused on the project’s low-level goal of choosing the most useful cost driver to track.
Finally, participants received information about a second request from management, this time asking for advice on revising cost drivers for the two other production activities. Participants could choose how much time and effort they put into making additional recommendations, and their options included making no further revisions at all. To better approximate real-world conditions, participants were informed that top management requested their assistance in the revision project and that regular responsibilities “continue to fill your entire work week.”
Even though subjects were not being paid or otherwise rewarded for the effort they put into this analysis, I found drastic differences in behavior and effort among the different groups. Participants who succeeded at first spent significantly more time continuing to work on the revision project if they were shown the slogan with the feedback report to prime the high-level goal. It seems that being reminded of overarching goals (even though the slogan was at the top right-hand corner of the page, and not part of the main instruction or feedback text) motivated them because they felt their efforts were contributing to something greater. On the other hand, the participants who were not shown the slogan with the feedback report, and thus were more likely to stay focused on the task at hand or the low-level goal, evidently felt that after their initial success, they had achieved enough and could focus on their other duties.
Meanwhile, among participants who failed at first, I found just the opposite. In this group, those who didn’t view the slogan with the feedback report expended significantly more additional effort on the project than those who were shown the slogan with the feedback report. This study—which won the 2013 Outstanding Emerging Scholar Award from the Accounting, Behavior and Organizations section of the American Accounting Association—should serve as food for thought for employers: invoking lofty ideals and goals can be effective in motivating employees to increase involvement in organizational projects—but for those who have recently experienced failure stemming from their involvement (which is not uncommon in projects amidst uncertainty), invoking these high-level goals may do the opposite, and managers may need to look for other ways to restore morale after such setbacks.