Evaluating the Impact of Managerial Incentives on Cost Accounting and Resource Allocation Efficiency

Posted: Nov 17, 2017

• Emily Mitchell
• Emily Torres
• Emma Anderson

Abstract

This research investigates the complex relationship between managerial incentive structures and their impact on cost accounting practices and resource allocation efficiency within contemporary organizations. Traditional approaches to this problem have typically focused on financial metrics and linear relationships, overlooking the behavioral and cognitive dimensions that fundamentally shape managerial decision-making. Our study introduces a novel neuro-behavioral framework that integrates principles from computational neuroscience and behavioral economics to model how different incentive structures influence managerial cognition and subsequent resource allocation decisions. We developed a multi-method experimental design combining neuroimaging simulations with behavioral experiments involving 145 mid-level managers across diverse industries. The methodology incorporates eye-tracking data, decision latency measurements, and cognitive load assessments to create a comprehensive model of managerial decision processes under varying incentive conditions. Our findings reveal that traditional performance-based incentives often trigger suboptimal cognitive patterns characterized by excessive focus on short-term metrics and reduced consideration of long-term resource sustainability. Conversely, we identified that hybrid incentive structures incorporating both financial and non-financial components promote more balanced cognitive processing and significantly improve resource allocation efficiency by 23-37%.