An fMRI Investigation of the Neurocognitive Processing of Strategies and Measures

A central feature of accounting is the use of measures to represent key elements of performance across multiple strategic objectives. In this study, we directly examine the neural processing of measures and strategic objectives. Our findings suggest that the brain processes measures (which are more concrete) and strategies (which are more abstract) differently. Consistent with context availability theory, we find a pattern of results suggesting that measures are processed more readily than strategies. We further find evidence suggesting that this difference in processing is a key determinant of surrogation, the tendency for individuals to treat measures as though they are the strategic objectives they represent as opposed to imperfect representations of those strategic objectives. Specifically, we find that greater overall fMRI activation in brain regions that differentially process measures and strategies is associated with less surrogation.