Summary by Antoinette L. Lynch
Ph.D. Program in Accounting
University of South Florida, Spring 2002
Behavioral Issues Main Page | Decision
Theory Main Page | JIT Main Page
Purpose
Foreign competition has prompted manufacturers in the United States to adopt new methods and technology, such as the Just-in-Time (JIT) concept. When a firm implements the JIT concept, major physical, psychological, and organizational changes occur in the organization’s work environment. The firm develops more intimate relationships with suppliers, significantly reduces its inventories, and implements simplified manufacturing procedures.
Several individuals within the firm may be reluctant to adopt the JIT concept. For example, management accountants may not be aware of the benefits associated with JIT, because they received limited coverage of JIT while completing their undergraduate accounting program. Managers and supervisors may not be motivated to implement JIT because the JIT concept seeks to eliminate the slack used by middle managers and supervisors as a cushion against difficulties caused by defective raw materials, production errors, and irregular supply and demand schedules.
The authors propose that the expectancy theory can be used to examine the motivation of middle managers and supervisors to implement JIT procedures. Management accountants are not sampled in this study.
Contribution
The expectancy theory variables (valence model and force model) can provide an appropriate conceptual framework for understanding how an organization can gain the support and cooperation of middle managers and supervisors in the implementation of JIT procedures. Both models have the strong ability to explain variations in individual motivation levels.
Theory
Expectancy theory is a theory of motivation based on the belief that people's efforts to achieve depend on their expectations of reward. Vroom’s formulation of expectancy theory involves two models, the valence model and the force model.
Expectancy-Valence Model:
Dependent Variable: Attractiveness
Independent Variables: (1) Second Level Outcomes and (2) Strength of the Instrumentality (relationship) between the first-level outcome and associated second level outcome.
The expectancy-valence model depends on the person's expectations of reward. People's motivation to achieve something depends on the product of their estimation of their chance of success (perceived probability of success) and the value they place on success (incentive value of success).
Force Model:
Dependent Variable: Motivational Force
Independent Variables: (1) Valence of First Level Outcome and (2) Expectancy
Two forced models are tested: additive and multiplicative
The force model depends on both the valence and the expectancy. When both valence level and expectancy are high, motivational force is high. The force model implies the motivation of a middle manager or supervisor to implement JIT procedures is explained by the valence (attractiveness) of implementing JIT procedures and the expectancy (probability) that some particular level of effort will result in implementation.
Proposals
Proposal 1: The valence model will predict the valence (attractiveness) of implementing JIT procedures to middle managers and supervisors.
Proposal 2: The force model will predict the motivation of middle managers and supervisors to implement JIT procedures
Proposal 2a: Most individuals will employee additive information processing procedures (the additive model), rather than the multiplicative information processing (the multiplicative model)
As expected, the typical individual reached a greater motivational force decision for higher expectancy levels than for lower expectancy levels. This increase is, however, relatively modest when the wide change in expectancy (from 10 percent to 90 percent) is considered, indicating the typical individual placed less weight on expectancy than upon valence in reaching motivational force decisions.
Method
The judgment analysis approach for expectancy research was used to examine whether the valence and force models can predict the motivation of middle managers and supervisors to implement JIT procedures. This approach uses individuals’ decisions as operational measures of valence and motivation.
Each participant was given 1 of 32 cases that described a unique hypothetical JIT implementation status. A regression model was obtained for each participant and the average values (i.e. adjusted R2 and beta weights) for each group were reported.
Sample
70 participants in Group One were middle managers and supervisors (or individuals who had previously held supervisory positions), who were enrolled in an evening MBA program. Group Two consisted of 35 mangers that were attending a one-day JIT seminar. Group Three participants were 50 middle managers and supervisors who were employed by one of the nation’s leading textile manufacturers.
Results
Proposal 1: The valence model will predict the valence (attractiveness) of implementing JIT procedures to middle managers and supervisors.
The typical participant in all three groups placed the greatest valence upon the fourth second-level outcome, the rewards associated with increased productivity in the new work environment. The typical participant found employment security and the more challenging production standards and output goals associated with the new work environment to be the second and third most attractive second-level outcome and placed the least value upon the greater coordination of departmental activities outcome.
The adjusted R2 values obtained from the person-by-person regression analysis provided an indication of the ability of the valence model to explain variations in the participants’ valence decisions.
Proposal 2: The force model will predict the motivation of middle managers and supervisors to implement JIT procedures.
The adjusted R2 values obtained from the person-by-person regression analysis provided an indication of the ability of the force model to explain variations in the participants’ motivational force (or effort level).
Proposal 2a: Most individuals will employee additive information processing procedures (the additive model), rather than the multiplicative information processing (the multiplicative model).
The results indicate the additive version of the force model performed well, even for those participants who actually did employ the multiplication information processing procedures. Even for these participants, the additive model explained over 95 percent of the total explainable variance in the participants’ effort-level, or motivation. These findings are in consonance with prior expectancy theory studies, which employ the judgment modeling within-persons approach used in this study.
Practical Implications
These finding provide guidance for accounting researchers who may wish to employ expectancy theory to examine the motivational aspects of implementing new procedures and systems in organizations. In a practical sense, the results provide some knowledge of the valences individuals place on second-level outcomes, which are associated with the implementation of JIT implementation. This suggests management accountants who advise senior executives regarding appropriate incentives for motivating the implementation of JIT procedures might advise publicizing the productivity rewards and employment security result from implementation, for these outcomes were highly valued by the members of all three groups of participants.
Future Research
The wide range of valence values obtained across individuals implies the need for research aimed at explaining these differences. A possible explanation is suggested by Klien (1989), who proposes the attractiveness of outcomes differs for individuals who have different values and intrinsic needs. Accounting researchers might, therefore, examine whether differences in individuals’ intrinsic needs influence the valences they associate with the various outcomes within the context of expectancy theory.
Future research, which employs expectancy theory to examine the implementation of JIT procedures, is also desirable. The various departments of a firm are usually affected differently by the implementation of JIT procedures, so future research might be focused at the department level.
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Related summaries:
Bonner, S. E. and G. B. Sprinkle. 2002. The effects of monetary incentives on effort and task performance: Theories, evidence, and a framework for research. Accounting, Organizations and Society 27(4-5): 303-345. (Summary).
Martin, J. R. Not dated. Lean concepts and terms. Management And Accounting Web. Lean Concepts and Terms Summary
Martin, J. R. Not dated. What is lean accounting? Management And Accounting Web. Lean Accounting
Snead, K. C. 1991. An application of expectancy theory to examine managers' motivation to utilize a decision support system. Abstract. Journal of Management Accounting Research (3): 213-222. (Summary).
Walker, K. B. and E. N. Johnson. 1999. The effects of a budget-based incentive compensation scheme on the budgeting behavior of managers and subordinates. Journal of Management Accounting Research (11): 1-28. (Summary).