Tatiana Sandino

Associate Professor of Business Administration

Tatiana Sandino is an Associate Professor of Business Administration in the Accounting and Management Unit, teaching the first-year required MBA course Financial Reporting and Control. Prior to joining the HBS faculty, she was an assistant professor at the Marshall School of Business, University of Southern California, where she taught management accounting to evening MBA students and undergraduate accounting majors, and received the Dean’s Award for Research Excellence.


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.


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. 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
  3. 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
  4. 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
  5. 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
  6. 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

    We examine whether centralized hiring (in this study, by the head office of a U.S. retail chain) or decentralized hiring (by store managers) leads to higher quality employee-company matches. While centralized hiring can ensure that enough resources are invested in consistently hiring people aligned with company values, it can also neglect the unit managers’ knowledge about which individuals would best match local conditions. We use difference-in-differences analyses to examine the effects of a switch from decentralized hiring to centralized hiring at our research site. We find that, on average, centralized hiring does not increase the quality of employee-company matches (measured through employee departures of newly hired employees, store-level employee turnover, and store performance) except when store managers are inexperienced and/or overly busy. Yet, we find that centralized hiring is associated with higher employee departure rates in stores where the manager is likely to be more informed than headquarters (e.g., in stores that are far from headquarters or that serve repeat customers).

    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. (Revised October 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. The Container Store

    Tatiana Sandino, Zeynep Ton and Aldo Sesia

    The Container Store (TCS) is a Texas-based retailer of organization and storage solutions. The company prides itself in taking care of its employees first, and its cofounder and CEO Kip Tindell practices Conscious Capitalism. Since its beginnings in 1978, TCS grew to a chain of around 70 stores located in over 20 states by 2013. Tindell believed TCS's employee-first culture and the seven Foundation Principles, which guided the company, were what differentiated the company from other retailers. With plans to grow to 300 stores, TCS went public in late 2013. Since its IPO, same store sales have suffered, and the company's stock in early 2016 was trading well below its IPO price. As such, the company's culture and Foundation Principles were being put to the test.

    Keywords: culture; conscious capitalism; Merchandising; Customer Focus and Relationships; Growth and Development Strategy; Operations; Service Delivery; Going Public; Performance Evaluation; Performance Productivity; Retail Industry; United States;


    Sandino, Tatiana, Zeynep Ton, and Aldo Sesia. "The Container Store." Harvard Business School Case 116-020, April 2016. (Revised December 2016.) View Details
  2. China Lodging Group (A)

    Tatiana Sandino, Shelley Xin Li and Nancy Hua Dai

    This case study explores the challenges of aligning middle management interests with company goals as a company navigates rapid growth in a dynamic industry. China Lodging Group, a Chinese hotel chain that opened about 2,000 hotels during its first decade in business, uses Balanced Scorecard (BSC) metrics to promote both consistency of service and an entrepreneurial attitude among hotel managers. The company needs to encourage its managers to operate according to company-level values and goals, without gaming the BSC metrics for short-term rewards or without focusing exclusively on local, narrow results. This case illustrates how executive teams can develop incentive systems that increase managers' sense of ownership and commitment to company values and goals.

    Keywords: Motivation and Incentives; Business or Company Management; Growth Management; Balanced Scorecard; Accommodations Industry; China;


    Sandino, Tatiana, Shelley Xin Li, and Nancy Hua Dai. "China Lodging Group (A)." Harvard Business School Case 116-004, July 2015. (Revised October 2016.) View Details
  3. 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
  4. 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
  5. 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
  6. 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
  7. 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