Using negotiated budgets for planning and performance evaluation: An experimental study : an experimental study

Budgets are often simultaneously used for the conflicting purposes of planning and performance evaluation. While economic theory suggests that firms should use separate budgets for conflicting purposes this contrasts with existing evidence that firms rarely do so. We address two open questions related to these observations in an experiment. Specifically, we investigate how a planning task that is in conflict with the performance evaluation task affects behavior in budget negotiations and their outcomes. Additionally, we analyze whether a single budget can be effectively used for both purposes compared to two separate budgets. We develop theory to predict that adding a planning task that is in conflict with the superior’s performance evaluation task increases the subordinate’s cooperation in and after the negotiation of a performance evaluation budget. Moreover, we predict that subordinate cooperation increases even more when the superior is restricted to use a single budget for both purposes. Our results broadly support our hypotheses. Specifically, we find that when budgets are used for both planning and performance evaluation, this increases the subordinate’s budget proposals during the negotiation and his performance after the negotiation. These effects tend to be even larger when the superior is restricted to a single budget rather than separate budgets for planning and performance evaluation, particularly with respect to subordinate performance. In our experimental setting, the benefits of increased subordinate cooperation even more than offset the loss in flexibility from the superior’s restriction to a single budget. The results of this study add to the understanding of the interdependencies of conflicting budgeting purposes and contribute to explain why firms often use a single budget for multiple purposes.

Bedrock bedding, landsliding and erosional budgets in the Central European Alps

We explore the controls of the litho-tectonic architecture on the erosional flux in the 370-km2 Glogn basin (European Alps). In this basin, the bedding and schistosity of the bedrock dip parallel to the topographic slope on the NW valley flank, leading to a non-dip slope situation on the opposite SE valley side. While the dip slope condition has promoted the occurrence of landslides (e.g. the c. 30-km2 deep-seated Lumnezia landslide), the opposite non-dip slope side of the valley hosts >100-m-deeply incised tributary streams. 10Be concentrations of stream sediments yield catchment-averaged denudation rates that vary between 0.27 ± 0.03 and 2.19 ± 0.37 mm a−1, while the spatially averaged denudation rate of the entire basin is 1.99 ± 0.34 mm a−1. Our 10Be-based approach reveals that the Lumnezia landslide front contributes c. 30–65% of the entire sediment budget, although it covers <5% of the Glogn basin. This suggests a primary control of the bedrock bedding on erosion rates and processes.