Teoh, H. Y. and Lam, R., Interactive Effects of Evaluation Style and Organizational Structure Characteristics of Autonomy and Interdependence on Subunit Managerial Performance, School of Accounting & Finance, University of Wollongong, Working Paper 10, 1989.
This study was designed to provide empirical evidence that subunit managerial performance is an interactive function of evaluation style and organization characteristics of autonomy and interdependence. Both autonomy and interdependence are believed crucial to the design of evaluation systems because the accounting literature has suggested that accounting performance measurement is more suitable for independent and autonomous organizational subunits. Subjects were division managers of profit centers and investment centers from large manufacturing companies within the Metropolitan Sydney and Wollongong areas. Collection of data was based on interviews and pretested questionnaire. The statistical analysis involved formulation of two regression equations in which the focus of research interest was to find the significance of the regression coefficients in the cross-product terms representing, respectively, the interactive effects of evaluation style and autonomy, and evaluation style and interdependence. The results showed a significant interaction between evaluation style and autonomy, indicating the importance of matching accounting-based evaluation style and high autonomy to induce higher subunit managerial performance. The lack of significant interaction between evaluation style and interdependence was consistent with prior studies which asserted that profit centers and investment centers are characterized by a low level of interdependence between subunits.