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Knowledge transfer in project reviews: the effect of self‐justification bias and moral hazard

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  • Mandy M. Cheng
  • Axel K‐D Schulz
  • Peter Booth

Abstract

In this study, we examine two factors that impact managers’ willingness to share private information during the project review stage of capital budgeting. Drawing on the cognitive dissonance theory and the agency theory, we find that both high perceived personal responsibility and the use of project reviews for performance evaluation result in a greater tendency for managers to withhold negative private information. However, we do not find an interaction between these two factors. Our study makes a contribution to both the academic literature investigating factors affecting project reviews and the practitioner literature looking at design and implementation of effective project reviews.

Suggested Citation

  • Mandy M. Cheng & Axel K‐D Schulz & Peter Booth, 2009. "Knowledge transfer in project reviews: the effect of self‐justification bias and moral hazard," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 49(1), pages 75-93, March.
    • Handle: RePEc:bla:acctfi:v:49:y:2009:i:1:p:75-93
    DOI: 10.1111/j.1467-629X.2008.00271.x
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    References listed on IDEAS

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    1. Booth, Peter & Schulz, Axel K. -D., 2004. "The impact of an ethical environment on managers' project evaluation judgments under agency problem conditions," Accounting, Organizations and Society, Elsevier, vol. 29(5-6), pages 473-488.
    2. Sprinkle, Geoffrey B., 2003. "Perspectives on experimental research in managerial accounting," Accounting, Organizations and Society, Elsevier, vol. 28(2-3), pages 287-318.
    3. Harrell, Adrian & Harrison, Paul, 1994. "An incentive to shirk, privately held information, and managers' project evaluation decisions," Accounting, Organizations and Society, Elsevier, vol. 19(7), pages 569-577, October.
    4. Rutledge, Robert W. & Karim, Khondkar E., 1999. "The influence of self-interest and ethical considerations on managers' evaluation judgments," Accounting, Organizations and Society, Elsevier, vol. 24(2), pages 173-184, April.
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    1. Benjamin Matthies & André Coners, 2017. "Document Selection for Knowledge Discovery in Texts: Framework Development and Demonstration," Journal of Information & Knowledge Management (JIKM), World Scientific Publishing Co. Pte. Ltd., vol. 16(04), pages 1-24, December.

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