L10: Leadership

Why is leadership relevant for management accounting and control?

Because it shapes how control systems are interpreted and used.

What is leadership considered within the MCS framework?

A soft control

Why is the “superman” leadership model outdated?

Because modern environments require learning and upward communication.

How does leadership affect the 3-legged stool?

It influences reporting, evaluation, organizational design, and soft controls.

What is Management By Walking Around (MBWA)?

A leadership style based on informal physical presence.

What is the main mechanism through which MBWA works?

Motivation.

Why does the MBWA effect decay over time?

Because motivational boosts are temporary.

What is the Hawthorne effect?

Behavioral change due to awareness of being observed.

Why does MBWA go beyond the Hawthorne effect?

Because effects persist beyond immediate observation.

What is behavioral integrity?

Consistency between a leader’s words and deeds.

Is behavioral integrity inherently moral?

No, it is about consistency, not morality.

How does BI differ from leading by example?

BI focuses on words and deeds; leading by example focuses on deeds only.

What is psychological safety?

A shared belief that interpersonal risk-taking is safe.

How does BI create psychological safety?

Through trust.

Why is psychological safety important?

It enables learning and job satisfaction.

How does leadership affect employee turnover?

High BI reduces turnover intentions.

What is authentic leadership?

Leadership characterized by self-awareness and value-consistent behavior.

Why is BI harder at higher levels?

Because leaders face more competing pressures.

What is extrinsic incentives bias?

Overestimating others’ extrinsic motivation.

Why is extrinsic incentives bias problematic?

It leads to suboptimal contract choices.

How does task-specific experience help leaders?

It improves assessment of intrinsic motivation.

Why must task experience be long enough?

To develop tacit task knowledge.

Why must task experience match the employee’s task?

Otherwise it does not revela relevant motivation

Are leadership effects easy to measure?

No, they are subtle and indirect.

What is the core lesson of EC10?

Leadership determines whether control systems succeed or fail.