Surrogation Fundamentals: Measurement and Cognition
48 Pages Posted: 12 Jul 2018 Last revised: 8 Oct 2021
Date Written: September 30, 2021
Measurement is a fundamental part of accounting. A primary purpose of measurement is to provide more concrete representations of abstract strategic objectives. A potential consequence of using measures to proxy for less-tangible strategic constructs is the tendency for managers to fall prey to surrogation, losing sight of strategic constructs and behaving as though measures are the constructs of interest. We show that surrogation is a nonconscious process. We also extend understanding of the conditions necessary for surrogation to occur by showing that mere awareness of measurement (even absent compensation) is sufficient to induce surrogation. These findings have implications for any setting where measures are used to represent a more abstract construct. While using measures is clearly very beneficial, we highlight the importance of understanding when and why surrogation can occur and developing strategies to reduce its effects.
Keywords: Surrogation, Measurement, Strategy, Attribute Substitution, Performance Evaluation
JEL Classification: M41
Suggested Citation: Suggested Citation