Knowledge that Transforms

We conduct two experiments to investigate how investors react to attributions accompanying management guidance. In our first experiment, we find that investors provide lower earnings estimates when management attributes negative guidance news to external factors than internal factors. When the guidance news is positive, the locus (internal versus external) of the attributions has no effect on investors' earnings estimates. In our second experiment, we separate out the effect of the attribution's outcome controllability (controllable versus uncontrollable) from that of attribution locus in a negative guidance news setting. We find that investors provide higher earnings estimates for internal and outcome controllable attributions than for internal and outcome uncontrollable attributions attributions. Outcome controllability does not matter when attributions are external. Our study extends prior research by showing how the valence of management guidance and the characteristics of guidance attributions jointly influence investors' earnings judgments.

Organizations that rely heavily on employee creativity face a dilemma: the particular nature of creative production calls for a substantial use of formal control, yet such control can undermine employee creativity. We examine this dilemma by analyzing how an organization's reliance on creativity influences its choice of control practices. More specifically, we argue that an organization's high reliance on employee creativity generates two types of cost, which will be reflected in the control choices made by its top management. First, a high reliance on employee creativity brings with it particular risks of dysfunctional employee behavior such as an overly narrow focus on the individual task or the opportunistic use of task-specific expertise. Second, it generates costs when it induces organizations to abstain from the use of (otherwise effective) controls because such controls increase the risk of undermining employee creativity. We identify two characteristics of the work setting – the importance of employees' intrinsic task motivation and the lack of task-specific cause–effect knowledge on part of managers – which help us to better understand the sources of the cost of creativity. Using survey data from 457 companies, we provide evidence that the importance managers attach to their employees' intrinsic task motivation is associated with a higher emphasis on assessments of non-task related performance, while a perceived lack of task-specific cause–effect knowledge on the managers' side is associated with more use of predefined targets for performance evaluation. Both work characteristics contribute to explaining higher emphasis on employee selection processes and increased delegation in work settings that heavily rely on employee creativity.

One aim of this paper is to present a new version of the relationship between accounting and decision making going beyond the important but now classical answer, ammunition, learning and rationalisation machines. Another aim is to add to literature about the relationship between accounting and managerial work. This involves a temporal perspective. Decisions are endings which stop a process of decision making, but they are also promises which crate new beginnings. The paper discusses the decision as a promise; while the decision produces a prediction, a promise produces a hope. The decision has contemplated all information, and the promise knows that the future is uncertain. Therefore, the promissory economy is not primarily concerned with solidifying a decision; it is more concerned with the extra investments and adjustments that continually have to be developed. The contribution of the paper is to show that to promise is to change commitments when the situation requires this. Therefore promises require forgetfulness and forgiveness: forgetfulness because learning is possible and forgiveness because others are impacted. The role of accounting under this condition is to enable promising. The study of decision making and promises moves from causality to effectuation and from solutions to generation of alternatives.

This paper illuminates how a journal and its editor can initiate and foster a stream of high quality and influential research in a novel area. It does this by analysing Accounting, Organizations and Society's (AOS's) and Anthony Hopwood's nurturing of research into key aspects of accounting for social sustainability for several decades before this research area became established. Our discussion unveils how the initiation of unique research areas may initially involve the publication of risky papers driven primarily by passion. Through the steering of a journal editor, subsequent work can proceed to combine this passion with academic rigour and produce research insights that can benefit society by positively influencing policy and practice. It is this attention to rigour that we argue needs to be central to future research in accounting for social sustainability (and accounting for sustainability more broadly) if it is to continue producing purposeful knowledge. We offer several substantive directions for future research aimed at producing such knowledge.