Agency Theory Explanations of Self-Serving Sales Forecast Inaccuracies | Zendy

Samuel Y. Todd | Zendy; Tamara A. Crook | Zendy; Tony Lachowetz | Zendy

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Agency Theory Explanations of Self-Serving Sales Forecast Inaccuracies

Author(s) -

Samuel Y. Todd,

Tamara A. Crook,

Tony Lachowetz

Publication year - 2013

Publication title -

business and management research

Language(s) - English

Resource type - Journals

eISSN - 1927-601X

pISSN - 1927-6001

DOI - 10.5430/bmr.v2n2p13

Subject(s) - agency (philosophy) , compensation (psychology) , incentive , principal–agent problem , work (physics) , conceptual model , marketing , business , empirical research , conceptual framework , economics , microeconomics , computer science , sociology , finance , psychology , social psychology , mechanical engineering , social science , corporate governance , philosophy , epistemology , database , engineering

The purpose of this paper is to develop and present a conceptual model that identifies factors contributing to accuracy in sales forecasts using agency theory’s tenets. Drawing upon these tenets, a model is developed that identifies the incentives that encourage sales people to provide accurate versus inaccurate sales forecasts. Six research propositions are developed, practical implications of the model for compensation programs are discussed, and specific recommendations for future empirical work are identified. The model can guide managers on how to develop a more effective compensation system.

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