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The Effects of Communication of Causal Linkages and Incentives on Employees’ Construal Level Mindsets

SHI, BEI
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Abstract

This study investigates how two management controls, communication of the causal linkages between employees’ current actions and future outcomes and incentives that tie employees’ future-period compensation to their current actions, affect employees’ construal level mindsets. A construal level mindset refers to the abstractness of an individual’s mental representation of an object, event, or action. A high-level construal has been shown to benefit various types of decisions and behaviors, such as creative performance, negotiation, and knowledge transfer. Using an experiment, I find that communication of the causal linkages increases employees’ construal levels regardless of whether incentives tie employees’ future-period compensation to their current actions. The findings suggest that firms can use the communication of the causal linkages, a relatively low-cost management control compared with incentives, to capitalize on the various decisional and behavioral benefits of high-level construal mindsets.

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Date
2019-12-16
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Research Projects
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Keywords
construal level mindsets, management control, communication of the causal linkages, incentives
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