Asymmetric Adjustment of Control in Organizations

In this study, I examine whether managers adjust their control over employees less when information proposes a decrease in control than when information proposes an increase in control. I develop theory to predict that managers exhibit this asymmetry in their control adjustments because they form relatively sticky perceptions about self-interested employee behavior over time. The results of my laboratory experiment support my predictions by showing that managers adjust their control over employees asymmetrically when I inform them about a change to the monetary costs of controlling employees. Further testing also reveals that the asymmetry in managers’ control adjustments disappears when managers’ sticky perceptions about self-interested employee behavior have less time to form and when they have a stronger natural tendency to adapt their perceptions over time. By explaining when and why managers adjust their control over employees asymmetrically, my study presents important implications for future research and practice.