Tatiana Sandino

Associate Professor of Business Administration

Unit: Accounting and Management


(617) 495-0625

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Professor Sandino's research examines how organizations use different control mechanisms to lead employees at the executive, middle management, and lower levels toward the achievement of common goals in an organization. She is particularly interested in chain organizations, where control mechanisms can allow firms to successfully replicate a business model across different locations, and in issues concerning executive compensation. Her work has been published in The Accounting Review, the Journal of Accounting and Economics, the Journal of Accounting Research, and Contemporary Accounting Research, and it has been featured in media venues such as The Wall Street Journal, the Financial Times, The Huffington Post, and CNBC.

Professor Sandino earned a DBA in accounting and management at Harvard Business School; an MBA at INCAE Business School, Managua, Nicaragua; and a BS in industrial engineering at the Universidad de Costa Rica, San José, Costa Rica.


Featured Work


Academic Publications

  1. Can Wages Buy Honesty?: The Relationship Between Relative Wages and Employee Theft

    C. X. Chen and Tatiana Sandino

    In this study we examine whether, for a sample of retail chains, high levels of employee compensation can deter employee theft, an increasingly common type of fraudulent behavior. Specifically, we examine the extent to which relative wages (i.e., employee wages relative to the wages paid to comparable employees in competing stores) affect employee theft as measured by inventory shrinkage and cash shortage. Using two store-level datasets from the convenience store industry, we find that relative wages are negatively associated with employee theft after we control for each store's employee characteristics, monitoring environment, and socio-economic environment. Moreover, we find that relatively higher wages also promote social norms such that coworkers are less (more) likely to collude to steal inventory from their company when relative wages are higher (lower). Our research contributes to an emerging literature in management control that explores the effect of efficiency wages on employee behavior and social norms.

    Keywords: Risk Management; Behavior; Compensation and Benefits; Societal Protocols;


    Chen, C. X., and Tatiana Sandino. "Can Wages Buy Honesty? The Relationship Between Relative Wages and Employee Theft." Journal of Accounting Research 50, no. 4 (September 2012): 967–1000. View Details
  2. Developing Good Measures to Advance Management Accounting and Control Research: A Discussion of 'Corporate Frugality: Theory, Measurement and Practice'

    Tatiana Sandino

  3. On Testing Business Models

    D. Huelsbeck, K. Merchant and Tatiana Sandino

    This study explored management decisions regarding formal empirical testing of business models. It documented a test of one company's business model under seemingly favorable conditions for such a test – a successful single product firm following a consistent strategy over a long period of time with stable management and publicly traded stock. Although the findings provided only weak support for the hypothesized business model, the confidence of the company's top managers in their business model remained high. Further analysis revealed that the managers' response to the test results was consistent with that expected of Bayesian-rational agents. Our analyses provided the basis for development of a framework for understanding the expected value of testing business models in various circumstances. This framework may explain apparent contradictions between previous studies containing normative statements regarding the value of testing business models.

    Keywords: performance measurement; non-financial performance measures; business models; management control; Decisions; Business Model; Performance Evaluation;


    Huelsbeck, D., K. Merchant, and Tatiana Sandino. "On Testing Business Models." Accounting Review 86, no. 5 (September 2011): 1631–1654. (Awarded a Research Grant from the Chartered Institute of Management Accountants.) View Details
  4. Executive Pay and 'Independent' Compensation Consultants

    K. J. Murphy and Tatiana Sandino

    Executive compensation consultants face potential conflicts of interest that can lead to higher recommended levels of CEO pay, including the desires to "cross-sell" services and to secure "repeat business." We find evidence in both the US and Canada that CEO pay is higher in companies where the consultant provides other services, and that pay is higher in Canadian firms when the fees paid to consultants for other services are large relative to the fees for executive-compensation services. Contrary to expectations, we find that pay is higher in US firms where the consultant works for the board rather than for management.

    Keywords: Executive Compensation; Compensation Consultants; conflicts of interest; CEO pay; board of directors; director pay; corporate governance; disclosure; Conflict of Interests; Governing and Advisory Boards; Corporate Disclosure; Executive Compensation; Corporate Governance; Consulting Industry; Canada; United States;


    Murphy, K. J., and Tatiana Sandino. "Executive Pay and 'Independent' Compensation Consultants." Journal of Accounting & Economics 49, no. 3 (April 2010): 247–262. View Details
  5. Organizational Design and Control across Multiple Markets: The Case of Franchising in the Convenience Store Industry

    D. Campbell, S. Datar and Tatiana Sandino

    Many companies operate units that are dispersed across different types of markets, serving significantly diverging customer bases. Such dispersion is likely to compromise headquarters' ability to control local managers' behavior and satisfy the needs of different customer types. In this study we find that market-type dispersion is an important determinant of the delegation of decision rights and the provision of incentives. Using a sample of convenience store chains, we show that market-type dispersion is positively associated with the degree of franchising at the chain level as well as the probability of franchising a given store within a chain. Our results are robust to alternative definitions of market-type dispersion and to other determinants of franchising such as the stores' geographic dispersion. Additional analyses suggest that chains that do not franchise cope with market-type dispersion by decentralizing operations from headquarters to their stores and providing their store managers higher variable pay.

    Keywords: control systems; Franchising; agency costs; market dispersion; retailing; Governance Controls; Organizational Design; Management Systems; Franchise Ownership; Retail Industry;


    Campbell, D., S. Datar, and Tatiana Sandino. "Organizational Design and Control across Multiple Markets: The Case of Franchising in the Convenience Store Industry." Accounting Review 84, no. 6 (November 2009): 1749–1779. View Details
  6. The Impact of Shareholder Activism on Financial Reporting and Compensation: The Case of Employee Stock Options Expensing

    F. Ferri and Tatiana Sandino

    We examine the economic consequences of more than 150 shareholder proposals to expense employee stock options (ESO) submitted during the proxy seasons of 2003 and 2004, the first case in which the SEC allowed a shareholder vote on an accounting matter. Our results indicate that these proposals affected accounting and compensation choices. Specifically, (i) targeted firms were more likely to adopt ESO expensing relative to a control sample of S&P 500 firms, (ii) among targeted firms, the likelihood of adoption increased in the degree of voting support for the proposal, and (iii) non-targeted firms were more likely to adopt ESO expensing when a peer firm was targeted. Additionally, (i) CEO pay decreased in firms in which the proposal was approved relative to a control sample of S&P 500 firms, and (ii) among targeted firms, approval of the proposal was associated with decreases in CEO compensation and the use of ESO in CEO pay. Our findings reveal an increasing influence of shareholder proposals on governance practices.

    Keywords: shareholder activism; shareholder votes; Executive Compensation; stock option expensing; corporate governance; financial reporting; Executive Compensation; Financial Reporting; Employee Stock Ownership Plan; Corporate Governance; Business and Shareholder Relations; Investment Activism;


    Ferri, F., and Tatiana Sandino. "The Impact of Shareholder Activism on Financial Reporting and Compensation: The Case of Employee Stock Options Expensing." Accounting Review 84, no. 2 (March 2009): 433–466. View Details
  7. Introducing the First Management Control Systems: Evidence from the Retail Sector

    Tatiana Sandino

    Focusing on a sample of US retailers, I study the management control systems (MCS) that firms introduce when they first invest in controls, and identify four categories of initial MCS, which are defined in terms of the purposes these MCS fulfill. The first category, Basic MCS, is adopted to collect information for planning, setting standards, and establishing the basic operations of the firm. The other three categories are contingent on more specific purposes: Cost MCS focus on enhancing operating efficiencies and minimizing costs; Revenue MCS are introduced to foster growth and be responsive to customers; and Risk MCS focus on reducing risks and protecting asset integrity. I hypothesize and find that the choice among these categories reflects the firms' strategy, and that firms that choose initial MCS better suited to their strategy perform better than others.

    Keywords: Management Control Systems; corporate strategy; entrepreneurial organizations; firm growth; Corporate Strategy; Entrepreneurship; Management Systems; Growth and Development Strategy;


    Sandino, Tatiana. "Introducing the First Management Control Systems: Evidence from the Retail Sector." Accounting Review 82, no. 1 (January 2007): 265–293. (Awarded the Outstanding Doctoral Dissertation Award, 2005, Management Accounting Section, American Accounting Association; Awarded the Emerging Scholar Competitive Manuscript Award, 2011, Foundation for Applied Research, Institute of Management Accountants.) View Details

Working Papers

  1. Who Should Select New Employees, the Head Office or the Unit Manager? Consequences of Centralizing Hiring at a Retail Chain

    Carolyn Deller and Tatiana Sandino

    This paper contributes to an emerging literature in management control that studies employee selection as a mechanism to align employees with corporate goals and values. Specifically, we examine whether centralized hiring (in this study, by the head office of a U.S. retail chain) or decentralized hiring (in this study, by the store managers), leads to lower employee turnover. On one hand, a centralized model of hiring can allow a company to ensure enough resources and efforts are invested into consistently selecting job candidates fitting the company's values. On the other hand, centralization can neglect the potential informational advantage a unit manager may have to determine the candidates' fit with the unit team and local environment where s/he will work. We examine three major factors that may affect these tradeoffs: 1) the need to align new hires to company values, 2) the complexity of operations (which we claim reduces the time the unit manager has to select new employees), and 3) the informational advantage a unit manager has in selecting a candidate relative to the head office (based on the unit's location, the relevance of the unit managers' knowledge of local customers, and the unit manager's knowledge of his/her team). We conduct difference-in-differences analyses to examine the effects of centralized hiring on employee turnover. The overall effect of centralized hiring on employee turnover is insignificant. However, consistent with the notion that centralized hiring would improve the alignment of employees with the company, we find that in more distant stores or stores operating in non-mainstream markets, centralized hiring is associated with greater retention of employees, especially employees highly aligned with the company's goals/values. On the other hand, we find that centralization is less beneficial for stores serving customers that are highly sensitive to service quality.

    Keywords: Hiring of employees; decision rights; centralization; managers information advantage; core values; goal alignment; Accounting; Customers; Decision Making; Economics; Geography; Human Resources; Labor; Management; Organizations; Situation or Environment; Retail Industry;


    Deller, Carolyn, and Tatiana Sandino. "Who Should Select New Employees, the Head Office or the Unit Manager? Consequences of Centralizing Hiring at a Retail Chain." Harvard Business School Working Paper, No. 16-088, February 2016. View Details
  2. Do Incentive Plans for Exemplary Employees Lead to Productive or Counterproductive Outcomes?

    Carolyn Deller and Tatiana Sandino

    Using data from a retail chain, this paper studies the effects of a preferential plan providing incentives only to exemplary employees. Such plans incorporate elements of tournaments (through the selection of employees chosen largely on the basis of past performance but incorporating some managerial discretion) and linear incentives to align employees with company goals and values. We find that, on average, the implementation of the preferential incentive plan was associated with improvements in sales. Also, we find that this plan was associated with greater improvements in sales and gross profits as well as reductions in the incidence of bad audits in stores where employees were initially less likely to be aligned with company goals. However, the plan was associated with lower sales and gross profits and higher incidence of bad audits, absenteeism, and turnover in some situations where employees could have perceived the plan to be unattainable or unfair. Our study sheds light on the impact of preferential incentive plans and the conditions under which these plans are more or less effective.

    Keywords: Employee compensation; incentive plans; Incomplete Contracts; company values; tournaments; subjectivity; equity theory; perceived unfairness; social identity; retail chains; Retail Industry; Asia;


    Deller, Carolyn, and Tatiana Sandino. "Do Incentive Plans for Exemplary Employees Lead to Productive or Counterproductive Outcomes?" Harvard Business School Working Paper, No. 16-087, February 2016. View Details

Practitioner Publications and Course Materials

  1. Go Mobile: Aligning District Managers and Store Teams

    Tatiana Sandino

    Indian cell phone retailer Go Mobile had implemented high-powered incentives to motivate its store employees to behave as owners and provide exceptional service. As the company scaled up, it faced multiple challenges in building a layer of district managers that were willing and were able to support the highly-incentivized store teams. On one hand, the district managers were expected to drive a profitable expansion, supporting complex day-to-day operations at the stores. On the other hand, they were expected to serve as mentors—communicating and teaching the values of the firm to their store managers, sharing best practices, and instilling a long-term perspective of the business. The case presents different mechanisms that the company could implement to motivate the district managers to effectively support the stores and foster growth.


    Sandino, Tatiana. "Go Mobile: Aligning District Managers and Store Teams." Harvard Business School Case 114-034, February 2014. (Revised April 2014.) View Details
  2. BanCrecen

    S. Dario, E.L. Montiel and Tatiana Sandino

    This case describes the aggressive entry of BanCrecen, an affiliate of the Mexican bank BanCrecer, in Costa Rica in 1994. Its strategy, like that of the Mexican home office, was to focus on personal banking, with the rapid expansion of neighborhood branches and strong innovation in the design of financial products for consumers.

    Keywords: Expansion; Globalization; Banks and Banking; Banking Industry; Costa Rica; Mexico;


    Dario, S., E.L. Montiel, and Tatiana Sandino. "BanCrecen." Journal of Business Research 50, no. 1 (October 2000): 29–39. View Details
  3. Global Investors Teaching Note

    K. Merchant, Tatiana Sandino and W. Van der Stede


    Merchant, K., Tatiana Sandino, and W. Van der Stede. "Global Investors Teaching Note." In Management Control Systems: Performance Measurement, Evaluation and Incentives. 2nd Edition edited by Kenneth Merchant and Wim Van der Stede. New York: Financial Times Prentice Hall, 2007. View Details
  4. Global Investors

    K. Merchant and Tatiana Sandino


    Merchant, K., and Tatiana Sandino. "Global Investors." In Management Control Systems: Performance Measurement, Evaluation and Incentives. 2nd Edition edited by Kenneth Merchant and Wim Van der Stede. New York: Financial Times Prentice Hall, 2007. View Details
  5. Putting Business Models Under the Microscope

    K. Merchant, Tatiana Sandino and D. Huelsbeck

    The article provides advice for financial managers on evaluating business models for corporate performance measurement. Emphasis is given to a study sponsored by the Chartered Institute of Management Accountants (CIMA) that examined the business model of a medical diagnostic test equipment manufacturer. Those engaged in the study conducted statistical tests which demonstrated that only research and development expenditures and instrument placement affected financial performance. They also found that the business model did not offer information on stock returns.

    Keywords: Business Model; Financial Management; Performance Evaluation;


    Merchant, K., Tatiana Sandino, and D. Huelsbeck. "Putting Business Models Under the Microscope." Financial Management (CIMA) (July–August 2011), 54–55. View Details

    Research Summary

  1. Overview

    by Tatiana Sandino

    In studying management control, Professor Sandino focuses on understanding how different control mechanisms can lead employees at varied levels within an organization, to achieve common goals. Her work builds on contingency theory by exploring environmental, strategic, and operating conditions that may affect the effectiveness of an organization’s control mechanisms, and on agency theory by examining the efficacy of various control mechanisms in aligning the interests of those performing the work and those delegating it. She investigates two lines of research, one related to chain organizations and one related to executive compensation.
  2. Control Mechanisms in Chain Organizations

    by Tatiana Sandino

    This line of research examines problems that top management faces in controlling employees who operate in organizations with large numbers of “like” business units. By enabling organizations to leverage their knowledge and expertise broadly, control mechanisms allow firms to scale up their services. Working primarily with retail organizations, Professor Sandino provides insights on the types of organizational design and control choices (such as introducing budgets and other types of internal controls, franchising, standardizing operations, setting compensation and incentives, and delegating decision rights) that can be used to enhance the coordination of operations across multiple units, provide incentives that are consistent with the local environments where the units operate, ensure that employees in diverse units are engaged with the organization’s goals,  and enable firms to use information from multiple units to learn about the effectiveness of their core business models.

  3. Executive Compensation

    by Tatiana Sandino

    Professor Sandino analyzes the process by which executive pay is set, the different constituencies that influence this process, and the circumstances that may lead to more or less effective compensation packages. Understanding these matters is not only relevant to academics but also to regulators, investors, and the public in general, who have increasingly questioned the levels of executive pay in the United States and the incentives created by executive compensation packages. According to some critics, executive compensation plans contributed to triggering various financial crises over the past decade. Following this line of research, Professor Sandino has assessed the impacts on executive pay of shareholder activism, various uses of compensation consultants, and fraud in peer firms.

    1. Received the 2010 Deans Award for Research Excellence from the Marshall School of Business at the University of Southern California.

    2. Won the 2005 Outstanding Doctoral Dissertation Award from the Management Accounting Section of the American Accounting Association for "Introducing the First Management Control Systems: Evidence from the Retail Sector."

    3. Awarded the 2004 Outstanding Paper in Corporate Finance from the Eastern Finance Association for "Stock Options Expensing: Evidence from Shareholders’ Votes" with F. Ferri and G. Markarian.

    4. Received High Distinction and Best Student, Masters in Business Administration, INCAE Business School, in 1997.

    5. Received High Distinction and Best Student, Graduate Degree in Functional Administration, INCAE Business School, 1996.

    6. Won the 2011 Emerging Scholar Competitive Manuscript Award from the Institute of Management Accountants for “Introducing the First Management Control Systems: Evidence from the Retail Sector” (Accounting Review, January 2007).