Accountability, construal levels, and managerial decision making

Prior research suggests that holding managers accountable for their decision process improves performance and leads to better decision making. However, we argue that conventional process accountability can push managers into a lower construal level and impair the quality of their decision in tasks that are prone to presentational biases such as the numerosity heuristic (i.e., overly focusing on the nominal value of quantitative information while neglecting its measurement unit). We propose that an alternative accountability focus, which requests managers to justify why their actions and decisions help achieve the organization’s strategic goals, can lead them into a higher construal level, mitigating the bias. Consistent with our predictions, our experimental results show that, in a forecasting and investing setting, conventional process accountability leads to lower construal level than goal-oriented accountability does. Under conventional process accountability, individuals make more positive forecasts and greater investments when financial performance information is presented in larger nominal values (i.e., smaller units) than when the same information is presented in smaller nominal values (i.e., larger units), and this effect is attenuated under goal-oriented accountability. Implications of our findings for accounting theory and practice are discussed.