European Management Journal (2013) 31, 209– 222

Adam Smith
Business School

journal homepage: www.elsevier.com/locate/emj

How can management control system fairness reduce

managersÕ unethical behaviours?
a,* b
Pascal Langevin , Carla Mendoza

a
EMLYON Business School, 23 Avenue Guy de Collongue, 69134 Ecully cedex, France
b
ESCP Europe, 79 Avenue de la République, 75543 Paris Cedex 11, France

KEYWORDS Summary Empirical research has shown that as management control systems (MCS) put
Management control heavy pressure on managers to achieve their objectives, they may induce two types of
systems; unethical behaviour: creation of budgetary slack and data manipulation. Recently, studies
Ethics; have introduced Organisational Justice theory into the area of management accounting
Fairness; research and shown the positive effects of organisational justice on managersÕ attitudes
Justice; and behaviours. However, few studies have systematically analysed how MCS fairness
Slack; reduces unethical behaviours and which characteristics of MCS could increase managersÕ
Data manipulation; perception that they are treated fairly.
Organisational commit- The purpose of the paper is to contribute to this research. It formulates testable
ment; hypotheses on how some specific dimensions of MCS can enhance perceived fairness,
Trust which in turn helps to reduce the creation of slack and data manipulation through
increased Organisational Commitment and Trust in supervisor.
ª 2012 Elsevier Ltd. All rights reserved.

Introduction organisations in developing and maintaining viable patterns

Management control systems (MCS) are widely used in com-
panies. They include all the mechanisms (strategic planning;
budgeting; resource allocation; performance measurement,
evaluation and reward; responsibility centre allocation; and
transfer pricing) managers use to ensure that the behaviours
and decisions of their subordinates are consistent with
the organizationÕs objectives and strategies (Anthony &
Govindarajan, 2007; Merchant & Van der Stede, 2007). More
specifically, ‘‘MCS provide information that is intended to
be useful to managers in performing their jobs and to assist
* Corresponding author. Tel.: +33 478 337 987; fax: +33 478 337
928.
E-mail address: langevin@em-lyon.com (P. Langevin).
of behaviour’’ (Otley, 1999, p. 364). Firstly, MCS help man-
agers to make the right decisions by aligning their objec-
tives with the companyÕs global objectives, and by
informing them of their performance so that they can take
corrective action if necessary. Secondly, MCS are used to
motivate managers: at the beginning of the year, they
enable managers to negotiate their objectives and the re-
sources necessary for their achievement; at the end of the
year, managersÕ performance is assessed by comparing their
results with the objectives. Organizations often link manag-
ersÕ material rewards, such as bonuses, to how well their
unit achieves budgeted performance results (Van der Stede,
2000). The ability to meet budgetary objectives is thus a
critical factor in managersÕ performance evaluation. In addi-
tion, managers whose units achieve their budgeted goals

0263-2373/$ - see front matter ª 2012 Elsevier Ltd. All rights reserved.
http://dx.doi.org/10.1016/j.emj.2012.12.001
210
may more likely see themselves as ‘‘winners’’ which is a
source of psychological rewards such as self-esteem
(Merchant & Manzoni, 1989).
However, instead of motivating managers and encourag-
ing them to contribute to the achievement of company
objectives, MCS may also induce unethical behaviours. In
particular, creation of budgetary slack (e.g., Dunk, 1993;
Merchant, 1985; Onsi, 1973; Schiff & Lewin, 1970; Young,
1985), and data manipulation (Bitner & Dolan, 1998; DeFond
& Park, 1997; Merchant, 1989; Merchant, 1990; Merchant &
Rockness, 1994; Umapathy, 1987) are two unethical behav-
iours largely observed in organisations.
Slack is generally defined as ‘‘resources and effort to-
wards activities that cannot be justified easily in terms of
their immediate contribution to organisational objectives’’
(March, 1988, p. 4). A common type of slack occurs when
managers ‘‘negotiate highly achievable targets, that is, tar-
gets that are deliberately lower than their best-guess fore-
cast about the future’’ (Merchant & Van der Stede, 2007, p.
183). When created during the management control pro-
cess, slack is commonly called budgetary slack (Lukka,
1988; Onsi, 1973; Schiff & Lewin, 1970). MCS provide man-
agers with opportunities for understating revenues and/or
overstating costs. Such misrepresentation of managersÕ true
performance capabilities will frequently be to their advan-
tage since it provides more readily achievable performance
targets and increases their chances to obtain monetary
(e.g., bonuses) and non-monetary (e.g., favourable evalua-
tions, praise) rewards (Merchant, 1985; Merchant & Van der
Stede, 2007).
The second type of unethical behaviour that researchers
have examined is data manipulation. Management control
systems include performance measurement mechanisms,
which organisations use, during the year, to verify that re-
sults are in line with objectives and, at year-end, to evalu-
ate managersÕ performance. During these performance
measurement steps, managers can try to look good by
manipulating the performance indicators (Merchant & Van
der Stede, 2007, p. 185). Data manipulation comes in two
basic forms: falsification and data management. Falsifica-
tion involves reporting erroneous data, whereas data man-
agement, also labelled earnings management, can be
defined as ‘‘any action on the part of the management
which affects reported income and which provides no true
economic advantage to the organisation and may, in fact,
in the long-term, be detrimental’’ (Merchant & Rockness,
1994, p. 79).
Management accounting research provides considerable
evidence that these behaviours exist in organisations (Libby
& Lindsay, 2010; Merchant, 1985; Merchant, 1990; Onsi,
1973). This is a problem because these behaviours distort
the planning and performance measurement processes,
motivate decisions that are contrary to the organizationÕs
interest, and generate useless costs in the forms of unwar-
ranted rewards. An important issue, yet not much addressed
in the literature, is how to design MCS that avoid or, at least,
limit managersÕ propensity to adopt such behaviours. How-
ever, over the past decade, a few management control
researchers have started to use the insights provided by re-
search on organisational justice (Cohen-Charash & Spector,
2001; Colquitt, Conlon, & Wesson, 2001) to show that these
unethical behaviours can be reduced when MCS are perceived
P. Langevin, C. Mendoza
to be fair (Little, Magner, & Welker, 2002; Staley & Magner,
2007; Wentzel, 2004).
Therefore, our purpose is to combine the results pro-
duced by research in both management accounting and
organisational justice in order to build a general framework
(Figure 1) that identifies: (1) which MCSÕ characteristics in-
crease their perceived fairness, and (2) how MCS perceived
justice1 reduces managersÕ propensity to create slack and
manipulate data.
The contribution of such an endeavour is to help academ-
ics, as well as practitioners, better understand how to de-
sign and implement effective MCS.
The paper is organised as follows. In ‘‘Literature re-
view’’, we examine the literature to clarify what is known
to date concerning the relationships between MCS
components, MCS perceived justice and managersÕ propen-
sity to create budgetary slack or manipulate data. In
‘‘Designing fair MCS to reduce unethical behaviours: identi-
fying key variables’’, we build a set of propositions concern-
ing: (1) the most important MCS characteristics that are
likely to increase managersÕ perceived MCS justice and (2)
how justice operates, that is to say, the reasons why MCS
that are perceived as fair may reduce managersÕ propensity
to create slack or manipulate data. Finally, in ‘‘Conclusions
and future directions’’, we conclude with an exploration of
managerial implications and suggestions for future
research.
Literature review
The unethical behaviours of budgetary slack
creation and data manipulation
Since the seminal work of Argyris (1952), research has
shown that MCS, rather than motivating managers to act
in the interests of their company, may induce them to adopt
unethical behaviours. According to Jones (1991), an ethical
decision is defined as ‘‘a decision that is both legal and
acceptable to the larger community. Conversely, an uneth-
ical decision is either illegal or morally inacceptable to the
larger community’’ (Jones, 1991, p. 367). This definition has
been used in studies looking at ethical issues in the context
of MCS (e.g., Barsky, 2008; Stevens, 2002).
This paper focuses on two types of unethical behaviours:
budgetary slack creation and data manipulation.
There is evidence that budgetary slack exists in many
organisations (Libby & Lindsay, 2010; Lowe & Shaw, 1968;
Onsi, 1973; Schiff & Lewin, 1970).
Similarly, empirical studies have shown that data man-
agement is commonplace in organisations (Bitner & Dolan,
1998; Libby & Lindsay, 2010; Umapathy, 1987).
Budgetary slack creation and data manipulation cause
two types of problems. Firstly, they have dysfunctional con-
sequences on the organisation. Slack generates a waste of
resources. Although slack may give managers protection
from unforeseen negative economic changes, if the eco-
nomic environment eventually turns out favourable, the ex-
cess resources will still have been used. As for data
manipulation, it causes bias in the information system.
1
Following social scientists, we use justice and fairness terms
interchangeably (Cropanzano & Stein, 2009, p. 194).
How can management control system fairness reduce managersÕ unethical behaviours
Characteristics of the
Management control
System
Figure 1 General framework.
Consequently, performance indicators may not be reliable.
For instance, they may not detect certain problems and this
will delay corrective actions and may result in a loss of com-
pany competitiveness in the medium or long term.
Secondly, budgetary slack as well as data manipulation
represent unethical behaviours and, as such, raise integrity,
objectivity and honesty issues. When managers create bud-
getary slack, they present a distorted picture of business
possibilities to their superiors by failing to disclose all the
information they have. In doing so, they increase the likeli-
hood of meeting their objectives and of earning non-
deserved performance-dependent rewards (Dunk, 1993;
Merchant, 1985; Merchant & Van der Stede, 2000; Onsi,
1973). By lying on the level of performance they say they
can achieve, managers deceive the organisation and in-
fringe the values of integrity and objectivity.
Similarly, many forms of data manipulation can be
viewed as unethical. Those engaging in data manipulation
can obtain personal advantages through their misrepresen-
tations, such as higher bonuses and undeserved promotions,
at the expense of the others (Merchant & Van der Stede,
2007). Data manipulation also raises objectivity, honesty
and integrity issues.
Research has demonstrated that managersÕ propensity to
adopt such behaviours is related to the level of perceived
pressure to meet annual objectives. For instance, Onsi
(1973) found a positive relationship between managersÕ
needs to create budgetary slack and an authoritarian top
management budgetary control system that places heavy
emphasis on achieving budget targets. Merchant (1985) con-
firmed that managersÕ ‘‘propensities to create budgetary
slack do appear to increase if a tight budget requires the
managers to make frequent tactical responses so as not to
incur budget overruns’’ (Merchant, 1985, p. 207). High pres-
sure to meet objectives seems also to encourage data
manipulation. Several studies have documented how control
systems that emphasise the achievement of objectives
motivate decisions that maximise short-run profit at the ex-
pense of long-term effectiveness and competitive strength
(Hayes & Abernathy, 1980; Laverty, 1996; Merchant, 1990;
Merchant & Bruns, 1986).
A number of the early behavioural management account-
ing studies started to identify how MCS should be designed
and implemented so as to reduce unethical behaviours
(Brownell & McInnes, 1986; Dunk, 1993; Merchant, 1985;
Merchant, 1990). More recently, some researchers have
started to highlight how perceived fairness may be a key
mediating variable. MCS perceived as fair may induce posi-
tive attitudes and therefore decrease managersÕ propensity
to engage in slack creation or data manipulation.
211
Budgetary
slack
creation
Perceived
Justice
Data
manipulation
The following sections examine the concept of perceived
organisational justice and its effects on attitudes and
behaviours.
Organisational justice: presentation
Since French coined the term ‘‘Organisational Justice’’ in
French (1964), organisational justice has become one of
the most popular areas in organisational behaviour
(Colquitt, Greenberg, & Scott, 2005). It is concerned with
peopleÕs fairness perceptions in their employment relation-
ship. The social science approach of organisational justice is
based on peopleÕs perceptions, such that an act is just be-
cause someone perceives it to be just (Fortin, 2008). A com-
mon definition of fairness is ‘‘the extent to which norms of
propriety or entitlement are fulfilled’’ (Lind & Tyler, 1988,
p. 3). Research on organisational justice highlights the key
role it plays in encouraging positive attitudes and behav-
iours towards the organisation.
Organisational justice encompasses three dimensions: dis-
tributive, procedural and interactional justice. Distributive
justice stipulates that managers are concerned with the fair-
ness of resource distribution, such as pay, rewards, promo-
tions, etc. (Adams, 1963; Deutsch, 1975; Homans, 1961;
Leventhal, 1980). The dominant approach for analysing issues
of distributive justice is AdamsÕs equity theory. According to
this theory, people determine whether they have been trea-
ted fairly at work by examining their own payoff ratio of out-
comes (e.g., size of a raise) to inputs (e.g., level of
performance) and comparing that ratio with the correspond-
ing outcome input ratio obtained by others such as their co-
workers (Adams, 1963; Adams, 1965). Procedural fairness is
defined as ‘‘an individualÕs perception of the fairness of pro-
cedural components of the social system that regulate the
allocation process. The concept focuses on the individualÕs
cognitive map of events that precede the distribution of re-
wards, and the evaluation of those events’’ (Leventhal,
1980, p. 35). Norms that employees apply in assessing proce-
dural fairness require, for example, that formal organisa-
tional procedures provide them with an opportunity to
voice their opinions (Thibaut & Walker, 1975) and to appeal
against unfavourable decisions (Greenberg, 1986), or that
procedures are applied consistently (Barrett-Howard & Tyler,
1986). Leventhal (1980) identified six criteria of perceived
procedural fairness. Typically, procedures are perceived to
be fair when they are consistent across people and over time,
free of bias, accurate (relying on good information), contain
mechanisms for correcting wrong decisions, adhere to preva-
lent conceptions of morality and are representative (i.e. take
into account opinions of all groups affected). The third
212
dimension is interactional justice. Bies and Moag (1986) ex-
plained that interpersonal treatment is conceptually distinct
from the structuring of procedures, and introduced the con-
cept of interactional justice. ‘‘By interactional justice we
mean that people are sensitive to the quality of interpersonal
treatment they receive during the enactment of organisa-
tional procedures’’ (Bies & Moag, 1986, p. 44). Interactional
justice has been further broken down into informational jus-
tice and interpersonal justice (Greenberg, 1993). Informa-
tional justice focuses on the justifications truthfully
provided to people. Interpersonal justice deals with treating
people with respect and dignity.
Research offers two perspectives to explain why people
value procedural (and, later, interactional) justice. Accord-
ing to the instrumental view of justice, people do not attend
exclusively to their short-term outcomes. They are
concerned with procedural fairness because it increases
the predictability and favourability of their long-term out-
comes (Greenberg, 1990; Lind & Tyler, 1988). The instru-
mental model focuses on material outcomes (e.g., pay,
budgetary resource distributions). According to the rela-
tional model, or group-value model, individuals care about
procedural fairness because receiving fair treatment indi-
cates status and worth within the group. The relational
model focuses on psychological outcomes (e.g., self-esteem
stemming from high status in and respect from the organisa-
tion) (Lind & Tyler, 1988; Tyler & Blader, 2000; Tyler & Lind,
1992).
Research has also shown that interactions exist between
the three forms of organisational justice (Ambrose & Ar-
naud, 2005; Bies, 2005; Brockner & Wiesenfeld, 1996; Cro-
panzano & Ambrose, 2001). For instance, research
indicates that even when managers are unsatisfied with
their objectives, they may have less negative reactions if
they believe that the procedures used to set these objec-
tives are fair (Magner, Welker, & Campbell, 1995). Though
this interaction can be described in different ways, the
key point is that the ill effect of injustice can be partially
mitigated if at least one component of justice is maintained
(Cropanzano, Bowen, & Gilliland, 2007).
One important debate in the justice literature concerns
the construct discrimination question (Colquitt et al.,
2001). On the one hand, some studies have revealed extre-
mely high correlations between the different justice dimen-
sions, suggesting that they might not be distinct in the
minds of many people. On the other hand, studies that have
examined the justice constructs separately have shown that
they have different correlates (Cohen-Charash & Spector,
2001; Colquitt et al., 2001).
Some researchers have questioned the benefits of focus-
ing exclusively on specific types of justice, suggesting a shift
toward examining overall justice judgments (Ambrose &
Arnaud, 2005; Cropanzano & Ambrose, 2001; Lind, 2001).
For example, Greenberg (2001) argued that when individu-
als form impressions of justice, they are making a holistic
judgment. Lind (2001) considered that the different types
of justice individuals experience very likely combine to form
their overall fairness judgment. Törnblom and Vermunt
(1999) contended that individuals consider fairness as a
Gestalt, that the components of fairness are meaningful
only in relation to the overall fairness of the situation.
The debate is not over. According to Colquitt et al.
P. Langevin, C. Mendoza
(2005), ‘‘The best approach may be to examine specific
dimensions and overall justice in combination’’ (p. 594).
The effects of unfairness on behaviours
Empirical research has repeatedly demonstrated that em-
ployee perceptions of fairness have a vital impact on their
attitudes and behaviours. Perceived injustice can have
many negative effects. It can provoke retaliation, lower
performance, and decrease morale (Cohen-Charash &
Spector, 2001; Colquitt et al., 2001; Viswesvaran & Ones,
2002). Indeed, one of the reasons managers may be tempted
to create slack or manipulate data is precisely because they
fear unfair treatment. Both the instrumental and relational
models of justice help understand why perceived unfairness
in the MCS might trigger unethical behaviour. The instru-
mental model indicates that if managers perceive the MCS
as unfair, they do not expect to receive valued material out-
comes. Therefore, they might engage in budgetary slack
creation and data manipulation as alternative ways to en-
sure these outcomes. The relational/group engagement
model indicates that an unfair MCS will convey to managers
that they are not valued by the organisation, which would
undermine their sense of identity with the organisation,
and thereby reduce their cooperative behaviours, with bud-
getary slack creation and data manipulation being uncoop-
erative behaviours. Creating budgetary slack and/or
manipulating data help managers offset perceived unfair-
ness and increase their performance and the chances to ob-
tain expected rewards and/or group recognition, possibly at
the detriment of the organizationÕs interests.
Therefore, the design and implementation of fair MCS
should contribute to reduce unethical behaviours and it is
important to examine which and how MCS determinants
can be perceived as fair and can contribute to reduce uneth-
ical behaviours.
Designing fair MCS to reduce unethical
behaviours: identifying key variables
Exploring the effects of fair MCS on unethical
behaviours
Although it seems critical to better understand how MCS can
help reduce unethical behaviours through enhanced per-
ceived fairness, very few studies have systematically inves-
tigated this issue. Little et al. (2002) conducted a first
survey of 149 managers having budget responsibilities and
employed in 96 different companies. Their results suggest
that managersÕ propensity to create budgetary slack is re-
duced when they view both the formal budgetary proce-
dures and the supervisory enactment of these procedures
as fair. Two years later, Wentzel (2004) did a survey at a
large urban hospital that was in the midst of a five-year
restructuring program involving a reduction of resources.
Respondents were area managers holding budgeting respon-
sibilities. Her results suggest that budgetary slack in effi-
ciency targets is lower when managers perceive both the
budgeting procedures and resource allocations to be fair.
Staley and Magner (2007) used questionnaire data from
1358 U.S. federal government unit heads to show that
How can management control system fairness reduce managersÕ unethical behaviours
procedural and interactional budgetary fairness reduce
managersÕ propensity to create budgetary slack by enhanc-
ing their trust in their immediate supervisor.
To our knowledge, no study has tried to identify how to
reduce the second unethical behaviour, that is to say data
manipulation. However, the results of the aforementioned
studies strongly suggest that perceived MCS justice signifi-
cantly affects managersÕ intended behaviours and in partic-
ular can reduce their propensity to manipulate data.
Further research is thus needed to improve our knowl-
edge of how fair MCS can reduce unethical behaviours. More
specifically, two aspects need to be more deeply explored.
Firstly, we need to identify more precisely which dimen-
sions of MCS are best able to increase their perceived
justice. Research has started to highlight a few characteris-
tics that have been shown to affect perceived fairness pos-
itively: participation in target-setting (Lau & Tan, 2005; Lau
& Tan, 2006; Libby, 1999; Lindquist, 1995; Magner et al.,
1995), level of formality and quality of feedback (Hartmann
& Slapničar, 2009) and use of multiple non-financial mea-
sures (Burney, Henle, & Widener, 2009; Lau & Moser,
2008; Lau & Sholihin, 2005). However, so far, research has
produced fragmented results. Studies have explored only
one component of the MCS at a time. In addition, when
researchers focus on participation in target setting for in-
stance, they only consider one stage of the management
control process: the establishment of objectives. Similarly,
when they consider the use of non-financial measures to
evaluate managersÕ performance, researchers are again
focusing on one specific stage of the management control
process, that is to say year-end performance evaluation.
Nevertheless, MCS take place throughout the year. Conse-
quently, it is important to find out the key MCS characteris-
tics that foster perceived fairness by considering the whole
process starting from objective setting, going through
results analysis during the year and ending up with perfor-
mance evaluation when results are issued. There has been
no undertaking so far to establish a model bringing together
key MCS characteristics, which increase the perception of
fairness for the managers involved.
Secondly, the process through which MCS fairness oper-
ates deserves further investigation: we need to understand
how MCS that are perceived to be fair reduce managersÕ pro-
pensity to create budgetary slack and manipulate data. Sta-
ley and MagnerÕs study (Staley & Magner, 2007) suggests that
the mechanism through which MCS justice operates is trust in
oneÕs supervisor: when managers consider that the MCS is
fair, they will develop trust in their supervisors and, there-
fore, will be less inclined to build budgetary slack. Trust is
probably not the only attitude involved. Indeed, organisa-
tional justice literature has shown that fairness encourages
a whole range of positive attitudes towards the company,
the job, peers and supervisors. Among those attitudes
encouraged by organisational justice, we need to identify
which ones help to reduce unethical behaviours.
Adopting this two-step approach, we now combine re-
sults from both MCS and organisational justice literatures
to establish a number of propositions regarding how some
specific dimensions of MCS can enhance perception of fair-
ness (‘‘Determinants of MCS that enhance perceived Jus-
tice’’) and how fair MCS reduce budgetary slack and data
manipulation through organisational commitment (‘‘Fair
213
MCS, organisational commitment and the reduction of
unethical behaviours’’) and trust (‘‘MCS justice, trust and
the reduction of unethical behaviours’’).
Determinants of MCS that enhance perceived
Justice
MCS undoubtedly have a major impact on managersÕ percep-
tion of justice (or injustice). Firstly, MCS are at the core of
distributive justice issues since they affect the material out-
comes that managers receive. This is so because MCS are
used to determine managersÕ objectives and resource allo-
cations, and this, in turn, affects managersÕ opportunities
to obtain rewards. Secondly, MCS also contain procedural
justice aspects since they rely on procedures that define
how objectives are set, performance measured, and year-
end rewards granted. Managers certainly pay attention to
the fairness of those procedures. Lastly, MCS can affect
interactional justice. Managers interact with their superiors
when negotiating their budget targets, analyzing intermedi-
ate results, assessing year-end performance and discussing
their rewards with their superiors and they may be sensitive
to how they are treated during these interactions.
On combining both organisational justice literature and
management accounting literature, we have identified four
characteristics of the MCS that seem to be critical. The first
one is the opportunity given to managers to participate in
the setting of their objectives; the second is the application
of the controllability principle when defining managersÕ
objectives or evaluating their performance; the third is
quality of feedback; and the fourth is the use of multiple
performance measures. These characteristics are affected
both by the design of the MCS as well as by how supervisors
implement them. All of them represent key dimensions of
MCS: they characterise how objectives are set, results are
measured and performance is evaluated. In addition, re-
search has recently started to explore the positive effects
of each of these features on perceived justice.
Participation in target-setting
The MCS literature traditionally defines participation as a
managerÕs ability to exert some influence in the target-
setting process. Influence suggests that employees are
afforded a degree of control over the outcomes of a deci-
sion-making process (Brownell, 1982). However, the justice
literature adopts a broader concept since it suggests that
positive effects of participation on perceived fairness just
require that the manager believes his/her views have been
given consideration, not that s/he actually influences the
objectives set. This approach is thus less restrictive than
the usual definition used in the management control
literature.
Based on previous research, we contend that participa-
tion is significantly related to perceived procedural justice
and also affects perceived distributive justice.
Firstly, participation is a critical component of proce-
dural justice (Folger & Greenberg, 1985; Greenberg &
Folger, 1983). It is the expression of ‘‘voice’’ in a
management control context. Budgetary participation is
likely to increase procedural justice as it contributes to
Leventhal et al. Õs (1980) rules of accuracy, correctability,
214
representativeness and ethicality. (1) It serves as a means of
communication between subordinates and their superiors,
enabling subordinates to exchange and seek information
from their superiors. This information-sharing role of partic-
ipation may improve accuracy of the data used in the deci-
sion-making process. (2) Participation enables subordinates
to express their grievances and to correct any inappropriate
prior beliefs held by their superiors: this is consistent with
the correctability rule. (3) It enables subordinates to ex-
press their concerns and values, which favours representa-
tiveness. (4) Participation satisfies the criterion of
ethicality since it is consistent with the moral value that
individuals should have the opportunity to engage in setting
goals.
According to the relational model of organisational jus-
tice, voice is important in and of itself, regardless of
whether it actually influences the outcome (Lind & Tyler,
1988; Tyler, 1987; Tyler, Degoey, & Smith, 1996). This mod-
el assumes that people value being members of groups, such
as organisations. The opportunity to voice is a way for them
to affirm their status with the groupÕs decision-maker and an
affirmed status acknowledges that they are valued members
of the group.
Empirically, there is considerable support for the posi-
tive association between participation and procedural fair-
ness (Kanfer, Sawyer, Earley, & Lind, 1987; Lind,
Friedland, & Dickenberger, 1978; Tyler, Rasinski, & Spodick,
1985).
This discussion leads to our first proposition.
Proposition 1a. Participation in target setting increases
MCS perceived procedural justice.
Secondly, participation also increases perceived dis-
tributive justice. According to the instrumental model
of organisational justice, people seek involvement in
processes because they are concerned with their own
outcomes (Lind & Tyler, 1988; Tyler, 1989). People are
motivated by self-interest and they consider that the
opportunity to voice opinion will further those interests
because they believe that their views will be taken into
consideration (Barry & Shapiro, 2000; Greenberg, 2000).
During the management control process, participation
provides managers with opportunities to influence their
objectives as well as the amount of resources that will be
allocated to them. Perceptions of distributive fairness
therefore should increase as opportunities to procure more
favourable targets increase. In addition, participation gives
them the opportunity to influence the targets, which will
then be used as a reference for their assessment. Participa-
tion can thus increase managersÕ chances of obtaining fairer
rewards since they will depend on targets that they have
helped to set. Thus:
Proposition 1b. Participation in target setting increases
MCS perceived distributive justice.
Application of the controllability principle
A second dimension that has the potential to increase the
perceived fairness of the MCS is the application of the con-
trollability principle according to which managers should
P. Langevin, C. Mendoza
only be assessed based on what they can control (Atkinson
et al., 1997; Choudhury, 1986; McNally, 1980).
The controllability principle can be applied both when
setting managersÕ objectives and when evaluating their per-
formance. At the target-setting stage, it involves selecting
performance measures that include only items managers
can control or on which they may exert some influence. At
the evaluation phase, it consists in removing the effects
of uncontrollables from the performance measured. Empir-
ical studies into the application of the controllability princi-
ple have noted a wide variety of practices and indicate that
it is not always strictly applied (Bushman, Indjejikian, &
Smith, 1995; Dent, 1987; Drury & El-Shishini, 2005; Giraud,
Langevin, & Mendoza, 2008; Merchant, 1989; Moon &
Fitzgerald, 1996; Otley, 1990; Ugras, 1994; Vancil, 1979).
Strictly applying the controllability principle appears to be
difficult, because no profit centre manager ever has
complete control over all the items included in the determi-
nation of the results for which s/he is to be held account-
able (Vancil, 1979). However, setting objectives based on
items managers can at least influence is a means of increas-
ing perceived fairness.
More specifically, we contend that the application of the
controllability principle is significantly related to perceived
distributive justice and that it also improves perceived pro-
cedural justice.
If the controllability principle is not applied, and if
uncontrollable events negatively affect managersÕ results,
there is a risk that the benefits they receive do not compen-
sate for the effort they made. Conversely, implementing
the controllability principle will protect managers from
uncertainty and increase their perception of distributive
justice by strengthening the relationship between their ef-
fort (inputs) and their rewards (outcomes). Indeed, the per-
ceived ratio between outcomes to inputs is a key dimension
of distributive justice (Adams, 1965).
This leads to Proposition 2a:
Proposition 2a. The application of the controllability
principle increases MCS perceived distributive justice.
We also argue that applying the controllability principle is
consistent with most of Leventhal et al.Õs (Leventhal, 1980)
rules for procedural fairness. Firstly, by removing uncontrol-
lable factors from managersÕ objectives and evaluation, the
controllability principle increases the conviction that mea-
sured performance will be related to managersÕ efforts and
not to unforeseeable events, thus following the accuracy
rule. Secondly, implementation of the controllability princi-
ple increases the consistency of performance evaluation
procedures. Indeed, uncontrollable factors impact differ-
ently on managers. Some may be negatively affected by fac-
tors they do not control; others may not be, or even benefit
from unforeseen circumstances. Applying the controllability
principle introduces more consistency to managersÕ assess-
ment. In addition, uncontrollable factors may affect a given
managerÕs performance differently from one period to an-
other. Thus, their neutralisation also increases the consis-
tency of performance evaluation over time. Thirdly,
implementation of the controllability principle requires
identification and neutralisation of uncontrollable factors
that might have affected managersÕ results. When conducted
How can management control system fairness reduce managersÕ unethical behaviours
through discussion, this gives managers the opportunity to
appeal if they consider that some uncontrollable elements
have not been sufficiently accounted for. Fourthly, applying
the controllability principle contributes to the ethicality
criteria since it is supposedly more ethical not to penalise
managers when their results are negatively affected by
uncontrollable events (Merchant & Van der Stede, 2000).
Accuracy, consistency, possibility to appeal, and ethicality
are four of the six Leventhal et al.Õs (Leventhal, 1980) condi-
tions for procedural justice. Therefore, we conclude that
applying the controllability principle should positively influ-
ence procedural justice.
Proposition 2b. The application of the controllability
principle increases MCS perceived procedural justice.
Quality of feedback
When applied to the management control process, feedback
is of two types. The first type of feedback is when superiors
provide managers with clear, timely and adequate explana-
tions of the reasons for their decisions at the target-setting
stage (Magner, Johnson, Little, Staley, & Welker, 2006, p.
411).The second type of feedback is ‘‘information received
by an individual about his or her past behaviour. It provides
some information about correctness, accuracy, or adequacy
of response.’’ (Ilgen, Fisher, & Taylor, 1979, p. 351). Specif-
ically, performance feedback is information provided to
subordinates as to their performance level, at different
moments during the year, including year-end (Steelman,
Levy, & Snell, 2004).
A high-quality performance feedback is significantly
related to perceived procedural justice (Cohen-Charash &
Spector, 2001; Taylor, Tracy, Renard, Harrison, & Carroll,
1995). Consistency and accuracy, two of LeventhalÕs
(Leventhal, 1980) conditions for fair procedures, are key
traits of performance feedback quality (Hartmann &
Slapničar, 2009; Landy, Barnes, & Murphy, 1978). Research
has shown that accurate feedback is perceived to be
procedurally fair (Roberson & Stewart, 2006). Hartmann
and Slapničar (2009) found that higher perceived quality
of feedback results in higher trust, both directly, and
through higher perceptions of procedural justice. We can
thus propose the following:
Proposition 3a. Quality of feedback increases MCS per-
ceived procedural justice.
Quality of feedback also affects interactional justice.
Providing feedback favours openness and fosters communi-
cation between managers and their superiors (Colquitt &
Jackson, 2006; Erdogan, 2002). Therefore, it contributes
to promoting informational justice, which is one of the
two components of interactional justice. Roberson and
Stewart (2006) showed that accurate feedback not only is
considered procedurally fair, but also fosters informational
justice. In addition, superiors who spend time discussing re-
sults during the year and at year-end with their collabora-
tors may be perceived as being more respectful. Quality
of feedback may indicate that recipients are valued and re-
spected members of the group. As such, it may increase
interpersonal justice, the second dimension of interactional
215
justice. Overall, quality of feedback should increase inter-
actional justice.
Proposition 3b. Quality of feedback increases MCS per-
ceived interactional justice.
Use of multiple and non-financial performance
measures
Traditional management control systems rely on financial
measures with objectives often expressed in terms of costs,
margins, net income, ROI, etc. (Chenhall & Langfield-Smith,
2007). Research indicates that subordinates perceive per-
formance evaluation as fair when multiple measures are
adopted instead of solely financial measures (Burney
et al., 2009; Lau & Moser, 2008). Performance evaluation
systems that take into account both financial and non-
financial indicators provide a more complete vision of the
managerÕs performance (Kaplan & Norton, 1996). For exam-
ple, they allow intangible assets to be valued and provide a
balance between measures of the performance that results
from past effort and leading measures that drive future
performance.
Firstly, multiple performance measures strongly affect
distributive justice by measuring more accurately the real
performance achieved. For example, if an employee exerts
efforts in managing a non-financial, yet important, dimen-
sion of organisational performance (e.g., quality), financial
indicators may not correctly reflect the actual contribution
of this employee who may thus be denied a deserved re-
ward. Correctly measuring inputs appears to be a necessary
condition to ensure that the outcome/input ratio is per-
ceived as fair.
Burney et al. (2009) found that multiple performance
indicators facilitate an employeeÕs comparison of inputs to
outcomes and that this comparison is associated with higher
perceptions of distributive justice.
Proposition 4a. The use of multiple and non-financial
measures increases MCS perceived distributive justice.
Secondly, the use of multiple and non-financial mea-
sures also contributes to MCS perceived procedural fair-
ness. They ensure that managersÕ multi-dimensional
efforts are more accurately reflected. Since information
accuracy is a fundamental criterion of procedural justice
(Leventhal, 1980), managers may perceive the use of such
multiple performance measures as procedurally fair. In
addition, as opposed to financial measures, such as bud-
get variances that may have several causes and may thus
be difficult to understand (Fisher, 1992), non-financial
measures are able to reflect each managerÕs personal sit-
uation better. They may also be easier to understand
since they pertain to operating aspects. For instance,
non-financial measures, such as set up time and customer
satisfaction rates, may be easier to understand than
aggregate financial measures such as efficiency variances
(Fisher, 1992). Thanks to this better understanding of ap-
praisal criteria, subordinates may be more able to discuss
this data and to submit alternative interpretations of their
performance (Lau & Moser, 2008). Thus, such understand-
ing of non-financial performance measures can provide
216
managers with a better sense of control over their perfor-
mance appraisals; this being an essential criterion of pro-
cedural justice (Leventhal, 1980).
Empirical findings support this view. For example, Burney
et al. (2009) showed that strategic performance measure-
ment systems based on multiple performance indicators
provide employees with relevant, and in particular accu-
rate, information and lead to increased procedural justice.
Lau and Moser (2008) indicated that the use of non-financial
measures is associated with improvement in employee
organisational commitment and job performance, with a
substantial part of these effects being indirect through
the enhancement of employee perceptions of procedural
fairness. This leads to proposition 4b.
Proposition 4b. The use of multiple and non-financial
measures increases MCS perceived procedural justice.
After identifying which dimensions of MCS are best able
to increase their perceived fairness, we need to understand
how MCS that are perceived to be fair reduce managersÕ
propensity to adopt unethical behaviours. Organisational
justice research has repeatedly shown the significant impact
of perceived justice on attitudinal and behavioural out-
comes, such as job satisfaction, goal commitment,
organisational commitment, job-related tension, trust,
organisational citizenship behaviours and performance
(Cohen-Charash & Spector, 2001; Colquitt et al., 2001;
Viswesvaran & Ones, 2002). Among the positive effects of
the perception of justice, two seem especially useful to
explain the relationship between MCS perceived fairness
and the reduction of unethical behaviours: organisational
commitment and trust in oneÕs supervisor.
Fair MCS, organisational commitment and the
reduction of unethical behaviours
Organisational commitment can be defined as the relative
strength of an individualÕs identification with and involve-
ment in a particular organisation. It can be characterised
by at least three related factors: (1) a strong belief in and
acceptance of the organizationÕs goals and values; (2) a will-
ingness to exert considerable effort on behalf of the organi-
sation; and (3) a strong desire to maintain membership in
the organisation. (Mowday, Steers, & Porter, 1979, p. 226).
According to the group engagement model, which is an
extension of the relational model of justice (Tyler & Blader,
2000), fairness communicates to employees that the group
values them, and makes them feel good about being part
of the group (Blader & Tyler, 2003, p. 111). Specifically,
the group engagement model argues that forms of proce-
dural and interactional justice originating with supervisors
and organisations drive identity judgments (e.g., pride in
group, felt respect from group, and identification with
group). Finally, identity judgments influence engagement.
The group engagement model helps to explain why per-
ceived MCS justice may lead to increased organisational
commitment.
Moreover, there is much empirical support indicating a
significant impact of organisational justice on organisational
commitment (Alexander & Ruderman, 1987; Folger & Bies,
1989; Kim & Mauborgne, 1993; Libby, 1999; Magner, Welker,
P. Langevin, C. Mendoza
& Johnson, 1992; Magner et al., 1995; McFarlin & Sweeney,
1992; Tang & Sarfield-Baldwin, 1996). Justice amplifies the
feeling of belonging to a company and makes the employee
more sensitive to its interests.
Although there has been some debate regarding which
justice dimensions best explain organisational commitment,
recent literature acknowledges that all three components
of perceived justice predict organisational commitment
(Ambrose & Arnaud, 2005; Cropanzano et al., 2007).
Since managers who are committed to their organisation
tend to identify with it and its goals and wish to maintain
membership (Mowday et al., 1979, p. 225), it can be as-
sumed that a manager with a strong organisational commit-
ment will be less inclined to make self-interested decisions
that are harmful to the company. Salancik (1977) showed
that organisational commitment encourages citizenship
behaviours, that is to say behaviours that exceed formal
and/or normative expectations. Nouri (1994) found that a
high level of manager commitment is strongly associated
with a decreased level of budgetary slack. Nouri and Parker
(1996) similarly found that managers who were highly com-
mitted did not exploit their high budgetary participation
privileges to create budgetary slack.
We may therefore hypothesise that the perceived justice
of MCS, by encouraging organisational commitment, will re-
duce the propensity of managers to create budgetary slack
and manipulate data to their advantage and against the
interests of their company.
Proposition 5a. MCS perceived justice reduces the pro-
pensity to create budgetary slack through increased organ-
isational commitment.
Proposition 5b. MCS perceived justice reduces the propen-
sity to manipulate data through increased organisational
commitment.
MCS justice, trust and the reduction of unethical
behaviours
Another positive effect of perceived organisational justice
is that it fosters trust in supervisor. ‘‘Trust is a psychological
state comprising the intention to accept vulnerability based
on positive expectations of the intentions or the behaviour
of another’’ (Rousseau, Sitkin, Burt, & Camerer, 1998, p.
385). Concepts from social exchange theory help to under-
stand why trust in superiors should reduce budgetary slack
and data manipulation. According to social exchange theory
(Brockner, 2002; Cropanzano, Howes, Grandey, & Toth,
1997; Cropanzano, Prehar, & Chen, 2002; Cropanzano &
Rupp, 2008; Masterson, Lewis, Goldman, & Taylor, 2000),
organisations are forums of transactions and individuals
form perceptions as to the fairness of those transactions.
The experience of justice generates an obligation on the
part of employees to reciprocate and thus fosters the devel-
opment and maintenance of a relationship of social ex-
change, with the expectation that such a relationship will
lead to the exchange of benefits between the parties. More-
over, when managers trust their supervisors, they have po-
sitive expectations that their supervisors will provide them
with valued material and psychological outcomes over the
How can management control system fairness reduce managersÕ unethical behaviours
long run and therefore feel less need to create budgetary
slack or manipulate data. Empirically, organisational justice
has been demonstrated to enhance trust in management
(Alexander & Ruderman, 1987; Cropanzano et al., 2002;
Folger & Konovsky, 1989; Konovsky & Pugh, 1994). Research
has shown that all dimensions of justice (distributive, proce-
dural, and interactional) are correlated with trust (Ambrose
& Arnaud, 2005; Cropanzano et al., 2007).
In addition, Colquitt et al.Õs meta-analysis (Colquitt,
Scott, & LePine, 2007) revealed that individuals who are
willing to trust others tend to perform more citizenship
behaviours and commit less unethical behaviour. A few
MCS studies have also demonstrated that trust mediates
the relationship between MCS perceived fairness and the
propensity to create budgetary slack. For instance, Maiga
and Jacobs (2007) show that both procedural fairness and
trust in supervisor have a significant impact on budget goal
commitment, which, in turn, negatively influences manag-
ersÕ propensity to create budgetary slack. Similarly, Staley
and Magner (2007) found that MCS interactional fairness
and procedural fairness have an indirect and negative effect
on the propensity to create budgetary slack by way of
enhancing trust in supervisor.
One of the reasons that cause managers to create bud-
getary slack and manipulate data is the fear of being un-
fairly treated by their company, and in particular, by the
superiors who assess their performance. We can therefore
hypothesise that when managers trust their superiors, they
are less inclined to develop these behaviours, since ‘‘trust
reflects an expectation or belief that the other party will
act benevolently’’ (Whitener, Brodt, Korsgaard, & Werner,
1998, p. 513). This leads to propositions 6a and 6b:
Proposition 6a. MCS perceived justice reduces the pro-
pensity to create budgetary slack through increased trust in
supervisor.
Proposition 6b. MCS perceived justice reduces the propen-
sity to manipulate data through increased trust in
supervisor.
Thus, we suggest that two attitudinal outcomes help to
understand why MCS justice reduces managersÕ unethical
behaviours: organisational commitment and trust in supervi-
sor. Perceived justice of MCS acts on two levels: firstly, it
affects the relationship between the employee and his com-
pany as a whole (organisational commitment); secondly, it
influences his relationships with his superiors (trust in super-
visor). Organisational commitment and trust in supervisors
will in turn reduce employeesÕ propensity to adopt unethical
behaviours.
However, this conclusion needs to be nuanced. We can
also consider that organisational commitment might induce
unethical behaviours on behalf of the general interest of the
company. For instance, managers who are highly committed
to their organisation may be tempted to hide mistakes made
by the latter for example, the manufacture and sale of
defective products or actions that damage the environment.
Similarly, excessive trust in oneÕs superior may remove an
individualÕs capacity for judgment and induce unethical
behaviour in order to follow his/her bossÕs directives. This
could be, for example, data manipulation to give a good
217
image of his/her supervisorÕs division performance. There-
fore, organisational commitment and trust in a supervisor
do not completely exclude all propensities towards unethi-
cal behaviour. However, it seems reasonable to posit that
a highly committed manager who trusts his supervisor will
be relatively less inclined to adopt unethical behaviours
for personal advantage, which is the main issue addressed
in this paper.
In summary, we have examined how four characteristics
of MCS may influence specific dimensions of perceived fair-
ness, which, in turn, will influence managersÕ organisational
commitment and trust in their supervisor and will eventually
reduce managersÕ propensities to create budgetary slack or
to manipulate data. Figure. 2 represents this general
framework.
Conclusion and future directions
Building on management accounting literature and on
organisational justice literature, this paper has tried to de-
velop a framework showing how fair management control
systems can reduce managersÕ unethical behaviours. Per-
ceived fairness is central to this framework.
The contribution of this theoretical framework is two-
fold. Firstly, it shows that four features play a key role in
enhancing MCS fairness: participation in target-setting;
application of the controllability principle; quality of feed-
back; and use of multiple performance measures. Although
some of these dimensions have already been examined in
management accounting studies, no attempt has been made
to date to link these characteristics and examine their inter-
related effects on managersÕ perception of MCS fairness. In
addition, the majority of these studies have focused on one
single dimension of organisational justice at a time. In par-
ticular, much attention has been devoted to procedural jus-
tice. However, research has shown that the different types
of justice interact to affect managersÕ general perception of
fairness (Ambrose & Arnaud, 2005; Cropanzano & Ambrose,
2001). Our framework is in line with this multidimensional
approach of organisational justice and identifies the key
variables of a MCS best able to increase one or several
dimensions of MCS perceived justice.
Secondly, the framework identifies two key conse-
quences of MCS perceived justice that explain how the lat-
ter can help to reduce unethical behaviours: organisational
commitment and trust in oneÕs supervisor. The purpose of
MCS is to motivate managers to achieve their objectives.
However, when too much emphasis is put on goal achieve-
ment, managers may be tempted to create budgetary slack
and manipulate data. What our framework shows is that
attention paid to MCS fairness will affect managersÕ atti-
tudes both towards their company as a whole and towards
their supervisors. Being committed to their company and
trusting their superiors are two attitudes that reduce man-
agersÕ propensity to adopt unethical behaviours detrimental
to the organizationÕs interests.
In terms of managerial implications, our framework pro-
vides organisations with guidelines on how to improve MCS
perceived fairness and, more particularly, indicates that
there are two aspects to pay attention to: the MCS design
and the way it is implemented. Firstly, organisations must
218
MCS characteristics
Perceived justice
Participation
in
Distributive
target-setting
justice
Application of
the controllability
principle
Procedural
justice
Use of multiple
performance
measures
Interactional
justice
Quality of
feedback
Figure 2 MCSÕs effects on unethical behaviours through perceived justice, organisational commitment, and trust.
design their MCS carefully. For example, the objectives set
for each manager should take into account elements that s/
he can really influence (controllability principle); proce-
dures should be defined to organise discussions between
managers and their supervisors at the target-setting stage;
similarly, there should be a formalised feedback throughout
the year and the performance evaluation system should not
include financial indicators exclusively.
Secondly, managersÕ perception of justice will also de-
pend on how the MCS is actually implemented. Defining pro-
cedures for discussions between a manager and his
supervisor during the target-setting stage is not enough;
the supervisor has to truly play the game and engage in hon-
est and open communication. Similarly, when partial results
are issued during the year, discussions between the manag-
ers and their supervisors need to take place in order to ana-
lyse the situation jointly and define corrective action if
necessary. Finally, at year-end evaluation, supervisors
should carefully consider how uncontrollable factors might
have affected managersÕ results so as to neutralise them,
specifically when they have negatively affected a managerÕs
performance. Keeping a fair MCS alive is not only a question
of defining rules and procedures: managers must fully
appreciate the importance of fairness and be willing to in-
volve themselves, knowing that fairness is a key dimension
of their role.
Although our theoretical framework contributes to bet-
ter understand how MCS can limit unethical behaviours,
additional work remains to be done, which opens new per-
spectives for research.
Firstly, the model needs to be tested. Although some of
the relationships have already been empirically examined,
some others have never been investigated. Measurement
instruments exist for most variables but some need to be
adapted to a management control context. For example,
items have been developed to measure participation in bud-
get goals (Milani, 1975; Kenis, 1979), quality of feedback
(Kenis, 1979; Steelman et al., 2004) or the use of non-
financial measures (Lau & Moser, 2008). Recently, Burkert,
Fischer, and Schäffer (2011) have designed an instrument
to measure the application of the controllability principle.
Instruments developed to measure distributive justice
P. Langevin, C. Mendoza
Attitudes and Behaviors
Budgetary
Organisational
slack
commitment
creation
Trust in Data
supervisor Manipulation
(Magner et al., 1992), procedural justice (Price and Muller,
1986; Colquitt et al., 2001; McFarlin & Sweeney, 1992) and
interactional justice (Bies & Moag, 1986) can be modified
slightly to be applied to a management control situation.
For instance, Hartmann and Slapničar (2009) have adapted
McFarlin and SweeneyÕs instrument (McFarlin & Sweeney,
1992) to measure perceived procedural justice in determin-
ing targets and evaluating performance. Measuring slack
creation or data manipulation is more difficult, since people
may not want to show or say that they adopt unethical
behaviours. However, some instruments have been used in
prior studies. For instance, Merchant (1990) designed an
anonymous questionnaire in which managers were asked
how frequently they manipulated performance measures,
such as shifting funds between accounts to avoid budget
overruns or deferring a needed expenditure.
In terms of research methodology, cross-sectional sur-
veys can of course be used. However, longitudinal studies
could also be relevant to take into account the possible de-
lays with which perceptions appear and evolve. Experimen-
tal studies, although usually difficult to implement in
managerial contexts, would also offer the possibility to bet-
ter control for contingencies. Finally, qualitative studies
based on interviews or case studies should not be disre-
garded as they can help better understand how perceptions
and attitudes take form.
Secondly, other dimensions can be explored in order to
refine the framework. A more systematic analysis of the
antecedents as well as the consequences of MCS fairness
is needed. For example, one can examine the impact on
perceived fairness of other MCS components that have been
shown, in past research, to influence attitudes and behav-
iours (e.g., goal clarity, goal achievability, subjectivity).
The same can be said regarding the consequences of MCS
fairness: how does it affect other behavioural dimensions
(e.g., motivation, job-related tension, citizenship) and
eventually performance?
One should also consider contingent or moderating ef-
fects. For example, studies have shown that national cul-
ture influences the way individuals react to MCS (e.g.,
Merchant, Van der Stede, Lin, & Yu, 2011) or form their per-
ceptions of fairness (Beugré, 2007) or of ethics (Ardichvili
How can management control system fairness reduce managersÕ unethical behaviours
et al., 2012). Thus, one can assume that national culture
may moderate some of the relationships described in our
model. As an example, one could test how uncertainty
avoidance influences the effect of the controllability
principle on unethical behaviours: an individual with a high
degree of uncertainty avoidance may find the non-
application of the controllability principle more unfair and
try to protect him/herself by creating more budgetary slack
than a person who is less risk-averse. Many other moderat-
ing variables could certainly be examined.
Another direction to explore is the dynamics between
variables over time. As the management control process
takes place over a period (usually a year) and is repeated
over time, the effects of MCS characteristics on managersÕ
attitudes at some point may affect justice perceptions
and behaviours subsequently. For example, managers who
perceive their performance evaluation to be fair at the
end of a year may be less inclined to build budgetary slack
when negotiating their objectives for the following year.
Thus, it would be interesting to explore whether and how
MCS fairness strengthens (or weakens) over time.
Research in the management control and behavioural
accounting areas have a lot to learn from organisational jus-
tice literature. Although most of the impacts of MCS fea-
tures on unethical behaviours were known, organisational
justice theory provides a better understanding of the mech-
anisms through which MCS may increase or decrease manag-
ersÕ propensity to adopt those behaviours.
Similarly, researchers as well as managers can benefit
from a better knowledge of ethics literature (Cropanzano &
Stein, 2009). There is a debate about what constitutes
(un)ethical behaviours and how to ensure more ethics in
organisations. Much is still to be done in the management
accounting field on these issues (Merchant & Van der Stede,
2000). As Berry et al., underlined (2005, p. 300), ‘‘Ethical per-
spectives on organisation seem to be markedly absent from
the majority of mainstream management control texts’’.
Finally, researchers in ethics and in organisational justice
should take an interest in the MCS. These are widespread
practices in many organisations, where outcomes, proce-
dures as well as interactions between people can be stud-
ied, and where high stakes can easily motivate unethical
behaviours.
Acknowledgement
The authors thank Hervé Laroche, Thierry Nadisic, Fred Sei-
del, the editor and associate editor and three anonymous
reviewers whose valuable suggestions contribute to improve
this paper. The authors also thank for their helpful com-
ments participants at the first International Workshop on
Organisational Justice and Behavioral Ethics, Lyon 2009;
the European Accounting Association 33rd Annual Congress,
Istanbul, 2010; and the MACORG workshop, Lyon 2009,
where earlier versions of this paper were presented.
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PASCAL LANGEVIN is professor of Manage-
ment Accounting & Control Systems at
EMLYON business School in France. He also
served as the managing director of a small
industrial firm and as the financial director
of an outplacement company.
His primary research interests are in per-
formance measurement and evaluation sys-
tems and their effects on decision-makersÕ
motivation, and performance.
CARLA MENDOZA is Professor in the Man-
agement Control Department at ESCP Eur-
ope Paris Campus.
After graduating from HEC, she worked for
Bossard Consultants, a Consultancy firm
specialized in Strategy and Organization.
She holds a Ph.D. from HEC and a DHDR from
University of Sophia Antipolis.
Her research includes the links between ABC
and ABM, strategic tableaux de bord and
balanced scorecards, the implementation of the Controllability
Principle and the effects of Management control systems on
behaviours.