Alexandra Rausch

Shared investment projects and forecasting errors: setting framework conditions for coordination and sequencing data quality activities.

In this paper, we investigate the impact of inaccurate forecasting on the coordination of distributed investment decisions. In particular, by setting up a computational multi-agent model of a stylized firm, we investigate the case of investment opportunities that are mutually carried out by organizational departments. The forecasts of concern pertain to the initial amount of money necessary to launch and operate an investment opportunity, to the expected intertemporal distribution of cash flows, and the departments’ efficiency in operating the investment opportunity at hand. We propose a budget allocation mechanism for coordinating such distributed decisions The paper provides guidance on how to set framework conditions, in terms of the number of investment opportunities considered in one round of funding and the number of departments operating one investment opportunity, so that the coordination mechanism is highly robust to forecasting errors. Furthermore, we show that—in some setups—a certain extent of misforecasting is desirable from the firm’s point of view as it supports the achievement of the corporate objective of value maximization. We then address the question of how to improve forecasting quality in the best possible way, and provide policy advice on how to sequence activities for improving forecasting quality so that the robustness of the coordination mechanism to errors increases in the best possible way. At the same time, we show that wrong decisions regarding the sequencing can lead to a decrease in robustness. Finally, we conduct a comprehensive sensitivity analysis and prove that—in particular for relatively good forecasters—most of our results are robust to changes in setting the parameters of our multi-agent simulation model.

It’s about how the task is set: the inclusion–exclusion effect and accountability in preprocessing management information

Managerial decision-making often rests on information that is preprocessed and therefore considerably reduced compared to the raw data. In our study we investigate to what extent the frame in information processing (selection of information on inclusion or exclusion basis) affects the provision of managerial information, and also whether and how this inclusion–exclusion effect is influenced by procedural accountability. We aim to investigate whether there is evidence to support the suggestion that accountability mechanisms may serve as adequate control mechanisms to mitigate inclusion–exclusion discrepancies. In a

Distributed investment decisions and forecasting errors: An analysis based on a multi-agent simulation model

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Sunk costs and the need for justification: an experimental study on de-escalation

2×2 experimental setting, 191 graduate and undergraduate students were asked to prepare a proper informational foundation for subsequent decisions to be made by a firm’s management. The students were asked to actively select (financial and non-financial) figures they consider to be of particular importance or to exclude figures they do not consider relevant. Half of the subjects were held explicitly accountable for the decision process, while the other half were not. Results show that (1) inclusion and exclusion are non-complementary modes of information selection, and (2) accountability increases the quantity of information reported, the time spent deciding which information to report, and also inclusion–exclusion discrepancies, though to varying degrees depending on the type of information considered.

Simulationsbasierte Investitionsentscheidungen in österreichischen und deutschen KMUs – Handlungsspielräume unter Risikoaspekten

One of the most important tasks of corporate financial management is to assure the efficiency of investment decisions (Ryan and Ryan 2002 Dutta and Fan 2009). In corporate practice it can be observed that departments are often endowed with decision making authority regarding their investments. This is due to rapidly changing markets, products, and technologies, and decentral managers who are usually better informed with respect to these volatile economic circumstances (Schuster and Clarke 2010).

Controlling and Sustainability: Empirical Evidence from Europe

This paper analyzes the impact of both non-systematic and systematic forecasting errors on the coordination of distributed investment decisions. The forecasts of concern pertain to the expected cash outlay necessary to launch and operate an investment project, to the expected cash flows generated by the project’s operation, and to the self-assessment of whether or not the abilities expected to be needed for operation coincide with one’s own. Systematic forecasting errors manifested by systematically over- or underestimating these predicted project indicators are interpreted as being produced by overconfidence. Utilizing a multi-agent simulation approach, we show that within a hierarchical business organization with distributed authorities for decision making, in some cases being overconfident can mitigate the negative effect of erroneous forecasting compared to being non-systematically wrong.

Corporate Social Responsibility and Company Performance – Evidence from Four European Countries ;

Purpose – The purpose of this paper is to investigate whether a greater flexibility in the budget time-structure, which allows for shifting budgetary funds beyond the budget year, does, in fact, mitigate inefficiencies in budget spending. Traditional budgets are usually tied to a finite time span, e.g. one year, and are heavily criticized both for hampering efficient resource allocation and also for encouraging dysfunctional budget spending behaviours such as wasteful spend-downs at the end of the budget year and inappropriate holding back of funds early on. Design/methodology/approach – A research framework is proposed which draws on critical perspectives developed in prior research and an analytical model put forward by Pollack/Zeckhauser that is adopted as the basis for the development of the hypotheses. In an explorative study, data from an empirical questionnaire survey administered to 219 practitioners, mainly managers, from Austria are then used to substantiate the hypotheses. Findings – Finite-per...