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Debiasing as a powerful management accounting tool? Evidence from German firms

Debiasing as a powerful management accounting tool? Evidence from German firms The purpose of this paper is to investigate if and how firms approach debiasing and what determines its success. In particular, this study examines if debiasing is effective in reducing cognitive decision biases. This paper also investigates organizational characteristics that determine the effectiveness of debiasing.Design/methodology/approachThis study uses survey data from German firms to answer the research questions. Target respondents are individuals in a senior management accounting function.FindingsIn line with the hypotheses, this paper finds that debiasing can reduce cognitive biases. Moreover, this study finds that psychological safety not only directly influences the occurrence of cognitive biases but is also an important factor that determines the effectiveness of debiasing.Research limitations/implicationsThis paper provides evidence that debiasing can serve as a powerful management accounting tool and discusses debiasing in the context of recent management accounting literature. This study also adds to the stream of research that investigates the role of psychological safety in organizations by highlighting its importance for successful debiasing.Practical implicationsThis paper informs firms that use or intend to use debiasing about crucial determinants to consider when debating its implementation, i.e. psychological safety. This study also identifies risk management as a potential interface for the implementation of systematic debiasing.Originality/valueWhile previous research primarily addresses specific cognitive biases and debiasing mechanisms using lab experiments, this is – to the best of the knowledge – the first study investigating cognitive biases and debiasing on a broad conceptual level using survey data. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Accounting & Organizational Change Emerald Publishing

Debiasing as a powerful management accounting tool? Evidence from German firms

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References (82)

Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
1832-5912
DOI
10.1108/jaoc-12-2019-0122
Publisher site
See Article on Publisher Site

Abstract

The purpose of this paper is to investigate if and how firms approach debiasing and what determines its success. In particular, this study examines if debiasing is effective in reducing cognitive decision biases. This paper also investigates organizational characteristics that determine the effectiveness of debiasing.Design/methodology/approachThis study uses survey data from German firms to answer the research questions. Target respondents are individuals in a senior management accounting function.FindingsIn line with the hypotheses, this paper finds that debiasing can reduce cognitive biases. Moreover, this study finds that psychological safety not only directly influences the occurrence of cognitive biases but is also an important factor that determines the effectiveness of debiasing.Research limitations/implicationsThis paper provides evidence that debiasing can serve as a powerful management accounting tool and discusses debiasing in the context of recent management accounting literature. This study also adds to the stream of research that investigates the role of psychological safety in organizations by highlighting its importance for successful debiasing.Practical implicationsThis paper informs firms that use or intend to use debiasing about crucial determinants to consider when debating its implementation, i.e. psychological safety. This study also identifies risk management as a potential interface for the implementation of systematic debiasing.Originality/valueWhile previous research primarily addresses specific cognitive biases and debiasing mechanisms using lab experiments, this is – to the best of the knowledge – the first study investigating cognitive biases and debiasing on a broad conceptual level using survey data.

Journal

Journal of Accounting & Organizational Change – Emerald Publishing

Published: Aug 17, 2021

Keywords: Management accounting; Psychological safety; Cognitive biases; Debiasing; Unbiasing; M41; M14; D91

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