EEG investigations on the management control problem
published: Sept. 7, 2015, recorded: May 2015, views: 1233
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Developments in neuroscience can illuminate problems in management accounting and control. In a first project we build on research on the mirroring properties of the sensorimotor cortex to explain controller behaviour. Typically controllers are accountable to lower-level managers in their role of providing support for local decision making, but also have a fiduciary responsibility to ensure sound financial reporting to higher management. Lower-level managers have an incentive to pressure controllers to misreport. It is important to know what determines a controller’s propensity to compromise on integrity under social pressure. We look at the suppression of EEG mu waves in the sensorimotor cortex while observing emotional facial expressions, and find it explains a substantial part of variation in controllers’ responses to professional dilemmas. Our second project deals with insight in problem solving. The ability to find creative solutions is a key competence for modern organisations, but may be inhibited by the management control system. In particular, we suggest accountability inhibits insight in problem solving. One of the defining characteristics of insight is unawareness on the part of the solver of how the solution was found. This makes it a difficult approach to account for. For problems which also allow for alternative, more analytic solving strategies we expect a processing shift away from insight and towards analytic approaches. Three experimental studies, combining behavioural, EEG, and eye-tracking evidence, support this theory: imposing accountability can inhibit creative problem solving in the organisation.
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