Variance analysis and performance: two empirical studies

Abstract When variances are investigated, a substantial amount of information can be generated which is often discarded once managers have explained the variance to superiors. This paper argues that discarding such information is wasteful for problem solving. Evidence from two empirical studies, a longitudinal field study in a single organization and a cross sectional study, is presented which provides evidence that retaining and analyzing this information is associated with improved performance in problem solving.

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