The Interplay Between Forward-Looking Measures and Target Setting

Jan Bouwens () and Peter Kroos ()
Additional contact information
Jan Bouwens: Amsterdam Business School, University of Amsterdam, 1001 NL Amsterdam, The Netherlands
Peter Kroos: Amsterdam Business School, University of Amsterdam, 1001 NL Amsterdam, The Netherlands

Management Science, 2017, vol. 63, issue 9, 2868-2884

Abstract: We examine whether financial targets are based on both forward-looking and financial information, rather than on financial information only. We collect sales and performance appraisal data of store managers in a retail chain. The firm issues directives focused on the provision of excellent customer service and assesses store managers’ compliance with these directives subjectively. We demonstrate that, controlling for current sales, compliance with directives scores predicts future sales performance. We find that, next to objective sales information, this forward-looking information is impounded in the next year’s sales target. Finally, we find some evidence that suggests that incorporating forward-looking information improves the accuracy of sales targets.

Keywords: accounting; economics; behavior; information; goals; motivation/incentives (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
https://doi.org/10.1287/mnsc.2016.2481 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:63:y:2017:i:9:p:2868-2884

Access Statistics for this article

More articles in Management Science from INFORMS Contact information at EDIRC.
Bibliographic data for series maintained by Chris Asher ().