Professional Forum Paying People to Lie: the Truth about the Budgeting Process

By Michael C. Jensen. 2003

413 citations recorded by the source corpus.

Subfields: Accounting, Management Information Systems, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/445bfef7ae18ea35af5a605ade4b6be1611cbae6

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Accounting

In Management Information Systems

In Strategy and Management

Citations in the corpus

Beyond budgeting or budgeting reconsidered? A survey of North-American budgeting practice (2010, background): “Further, this inevitably leads to budgetary gaming by subordinates to increase the probability of receiving positive performance evaluations and associated pay increases (see also Welch, 2005)—a process Jensen (2003) refers to as “paying people to lie.””
Goals Gone Wild: The Systematic Side Effects of Overprescribing Goal Setting (2009, background): “…of organizational goal setting implies, ethical infractions are not simply a byproduct of a few “bad apple” employees, but a systematic result of setting specific, challenging goals; similarly, Jensen (2003) contends that lying and cheating are byproducts of connecting rewards to goal achievement.”
Sorting and Incentive Effects of Pay for Performance: An Experimental Investigation (2007, background): “…employee and firm performance has long been a focus of attention in management, economics, organizational studies, and sociology (e.g., Gomez-Mejia & Welbourne, 1988; Jensen, 2003; Lawler, 1971, 1990; Lazear, 1986, 1999, 2000; Rynes & Lawler, 1983; Rynes, Schwab, & Heneman, 1983; Zenger, 1992).”
The Effect of Information Systems on Honesty in Managerial Reporting: A Behavioral Perspective* (2006, neutral): “performance will meet or exceed budgeted performance, often resulting in a bonus or other pecuniary reward ( Jensen 2003 ).”
Conscience without cognition: The effects of subconscious priming on ethical behavior (2014, background): “Although several recent theoretical articles have lamented that goals seem to increase unethical behavior (Barsky, 2008; Jensen, 2003; Ordóñez, Schweitzer, Galinsky, & Bazerman, 2009), to our knowledge, no studies have actually attempted to reduce these negative effects.”
Reviewing and Theorizing the Unintended Consequences of Performance Management Systems (2018, positive): “Concepts such as ‘fiddling’ (Mannion and Braithwaite, 2012), ‘managing the numbers’ (Jensen, 2003; Li, 2015) or plain ‘dishonesty’ (Hannan et al., 2006) are common in this body of work.”
Perspectives on experimental research in managerial accounting (2003, background): “Incentives and opportunities to create budgetary slack exist in the organization, though, when firms use budget-based contracts and employees participate in the budgeting process (Baiman & Evans, 1983; Demski & Feltham, 1978; Jensen, 2001).”
The Agency Costs of Overvalued Equity and the Current State of Corporate Finance (2004, methodology): “The Agency Costs of Overvalued Equity and the Current State of Corporate Finance Michael C. Jensen Jesse Isidor Professor of Business Administration, Emeritus, Harvard Business School and Managing Director, Organizational Strategy Practice, The Monitor Group. e-mail: Mjensen@hbs.edu”
The Effect of Honesty and Superior Authority on Budget Proposals (2008, neutral): “In fact, practitioners and academics accuse the budgeting process of eing largely devoid of an ethical component e.g., Jensen 2003; Horngren et al. 2003 .”
THE PARADOX OF STRETCH GOALS: ORGANIZATIONS IN PURSUIT OF THE SEEMINGLY IMPOSSIBLE (2011, background): “Although goals can pose an especially dangerous temptation to breach ethics when associated with performance measurement or compensation systems by creating incentives to misrepresent performance (Jensen, 2003; Locke, 2004; Schweitzer et al., 2004), empirical work provides direct evidence that even ”
Contemporary Performance Measurement Systems: A Review of Their Consequences and a Framework for Research (2012, background): “Further research could also explore whether CPM systems have any effect on negative employee attitudes or dysfunctional behaviours, as it has been suggested in related areas of research (e.g., Chwastiak, 2006; Jensen, 2003; Ordóñez et al., 2009).”
How do the ownership structure and board of directors' features impact earnings management? The Spanish case (2020, neutral): “Therefore, a plausible action of managers to achieve their own interests is the choice of techniques to manage the earnings (Jensen, 2003; Smith, 1976).”