Determinants of divisional performance evaluation practices

I investigate factors affecting firms' uses of three types of performance metrics to evaluate division mangers: division accounting metrics, firm accounting metrics and firm stock price. Survey data reveal that division accounting metric use increases with the divisions' industry's pr...

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Bibliographic Details
Published inJournal of accounting & economics Vol. 24; no. 3; pp. 243 - 273
Main Author Scott Keating, A.
Format Journal Article
LanguageEnglish
Published Amsterdam Elsevier B.V 31.12.1997
Elsevier
Elsevier Sequoia S.A
SeriesJournal of Accounting and Economics
Subjects
Accounting
Accounting procedures
Contracting
Contracts
Correlation
Data analysis
Divisional performance measurement
Earnings
Evaluation
Growth rates
Managers
Organization
Organizational behavior
Organizational design
Research methods
Studies
United States > US
D23
Organizational design
M4
Contracting
Divisional performance measurement
L22
M12
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Summary:I investigate factors affecting firms' uses of three types of performance metrics to evaluate division mangers: division accounting metrics, firm accounting metrics and firm stock price. Survey data reveal that division accounting metric use increases with the divisions' industry's price–earnings correlation and decreases with divisional growth opportunities; firm accounting metric use increases with the manager's impact on other divisions and decreases with growth opportunities and other managers' impact on that division; and firm stock price use increases with relative division size and the correlation between firm stock returns and market-wide returns.
Bibliography:ObjectType-Article-2
SourceType-Scholarly Journals-1
ObjectType-Feature-1
content type line 23
ISSN:0165-4101
1879-1980
DOI:10.1016/S0165-4101(98)00008-1