The moderating effects of hierarchy and control systems on the relationship between budgetary participation and performance

This study investigates the moderating effects that an organizational unit's hierarchical level and control systems have on the relationship between budgetary participation and performance. Using moderated regression analyses, we find a three-way interactive effect on performance between hierarchical levels, types of control systems, and budgetary participation. Further analyses reveal that at the high level of a hierarchy, budgetary participation has a positive relationship with performance and this relationship is stronger for organizational units that use output control than for those that use behavior control. By contrast, at the low level of a hierarchy, budgetary participation has a negative relationship with performance and this relationship is stronger for organizational units that use output control than for those that use behavior control.     

The effects of national culture on the role of participation in different task situations

Prior studies primarily in Anglo-American and Asian cultural settings have found that budgetary participation interacts with reliance on accounting performance measures and task situations to affect managerial attitudes. Researchers have questioned if such findings can also be found in different cultural environments. As France has a high power distance and high individualism culture which is different from those of both the Anglo-American and Asian nations, this study investigates if such cultural differences may affect the findings of prior studies. Based on a sample of 44 French managers, the results indicate a similar significant three-way interaction effect. However, they also indicate that French managers have low levels of budgetary participation. Participation also has an insignificant effect on managers' job satisfaction in high task difficulty situations. These results are contrary to those of prior studies in Anglo-American and Asian cultural settings and may have important implications for the study of cultural effects on management control systems.     

The effects of job-related tension on managerial performance in participative budgetary settings

The association between job-related tension and managerial performance has been the subject of speculation and some preliminary research, with little resolution. Four potential reasons for the lack of resolution on this issue are explored in this paper. These are (1) the use of single organizational samples in prior studies, (2) the measurement of managerial performance, (3) the prospect of a curvilinear relation between job-related tension and performance, and (4) the possibility that budgetary participation moderates the association, if any, between job-related tension and performance. By systematically varying both the measurement of managerial performance and the employment of random sampling, the findings of this research suggest that the association between job-related tension and performance is significant and negative. There is no evidence to support the proposition that participation moderates the relation between job-related tension and performance.     

The effects of anti-takeover measures on Japanese corporations

This study examines 130 Japanese firms that announced and adopted pre-warning anti-takeover measures between 2005 and 2007. Consistent with the managerial entrenchment hypothesis, the announcement-associated abnormal returns are negative and statistically significant. An examination of the relationship between the abnormal returns and the firm’s ownership structure also supports the signaling hypothesis. The abnormal returns are positively related to the managerial shareholding variable as the managerial shareholding variable ranges from near-zero to an intermediate level; however, the relationship becomes negative as managerial shareholding increases past intermediate levels. Nevertheless, further examination of the post-adoption operating performance shows no significant trend towards deterioration as is predicted by the managerial entrenchment hypothesis. The results primarily support the signaling hypothesis: Japanese managers adopt anti-takeover measures mainly to deter hostile takeovers, and the anti-takeover measures, per se, do not fundamentally affect managerial behaviors.     

THE EFFECTS OF MANAGERIAL ROLES ON THE RELATION BETWEEN BUDGETARY PARTICIPATION AND JOB SATISFACTION

This study examines the extent to which managerial roles moderate the relation between budgetary participation and job satisfaction. Managerial roles, defined in terms of line versus staff, may serve as a situational variable that assists in explaining the equivocal results found in studies for the association between budgetary participation and job satisfaction. The findings of this study suggest that the link between budgetary participation and job satisfaction is dependent on the role a manager undertakes in an organization. The relation between budgetary participation and job satisfaction was found to be significantly more effective for line managers than for staff managers.     

Managerial Placement and Entrenchment

Using data on companies that have implemented private placements in China from 2011 to 2016, we examine the discount on private placements, short-term stock returns, and long-term performance after the placements. Our goal is to determine whether the prevailing certification and entrenchment hypotheses can explain managerial placements. We find that the participation of managerial investors has a significant and negative impact on short-term stock returns. Such a negative effect can also be found on issuing companies’ long-term profitability. Moreover, managerial placements have a higher discount than nonmanagerial placements. Our findings suggest that managerial placement is consistent with the entrenchment hypothesis but not the certification hypothesis.     

The interactive effect of budgetary participation and budget favorability on attitudes toward budgetary decision makers: A research note

Referent cognitions theory predicts that employees who receive unfavorable budgets will have less negative attitudes toward budgetary decision makers if they participated in the budgetary process than if they did not participate. Questionnaire data from international managers were analyzed with regression to test for this predicted interaction between budgetary participation and budgetary outcome favorability. The results indicated that budgetary participation and budget favorability had the predicted interactive effect on the managers' attitudes toward their supervisor and their organization.     

Fiscal Decentralisation and Economic Growth in High‐Income OECD Countries

Among the majority of high–income OECD countries, the degree of fiscal decentralisation has converged over the last 30 years towards an intermediate level. The theoretical arguments for and against fiscal decentralisation point to explanations for this tendency, because both extreme decentralisation and extreme centralisation are associated with disadvantages for economic growth. Hence, the observed trend of convergence would be growth–promoting. The paper analyses the long–run empirical relationship between per capita economic growth, capital formation and total factor productivity growth, and fiscal decentralisation for the high–income OECD countries. The evidence supports the view that the relationship is positive when fiscal decentralisation is increasing from low levels, but then reaches a peak and turns negative. A policy implication is that policy–makers in several countries with relatively low degrees of fiscal decentralisation could possibly mobilise growth reserves by increasing it.     

管理层权力对企业绩效的影响研究——基于企业内部治理机制视角

以我国主板上市企业数据为基础,实证检验了上市企业管理层权力对企业绩效的影响,内部治理机制对管理层权力——企业绩效敏感性的影响。实证结果表明,内部治理机制影响管理层权力与企业绩效之间关系的敏感性,当不考虑内部治理机制时,企业绩效与管理层权力综合变量在1%水平上显著正相关,具有较高教育背景和持有企业股权的管理层,能为企业带来更好的业绩。当考虑内部治理机制时,企业绩效与管理层权力综合变量仅在10%水平上正相关。管理层权力综合变量对股权制衡度较低和独立董事比重较高的企业的绩效具有显著正向影响。     

The influence of organizational culture on the usefulness of budget participation by Singaporean-Chinese managers

This paper uses Hofstede's cultural dimensions (Hofstede G.H , Culture's Consequences International Differences in Work Related Values, (Beverly Hills, CA: Sage 1980)) to examine whether differences in organizational culture between local and foreign manufacturing firms affect the usefulness of budgetary participation in a high power distance nation (Singapore). The results from interview and survey data analysis provide support for the hypothesis that power distance moderates the usefulness of participation in budget setting and performance evaluation at the organizational culture level in terms of decreased role ambiguity and enhanced superior/subordinate relationship.     

How Top‐down and Bottom‐up Budgeting Affect Budget Slack and Performance through Social and Economic Exchange

This paper investigates the effects of a top‐down (TD) versus bottom‐up (BU) orientation in different stages of the budgetary target‐setting process on slack and managerial performance. We use social exchange theory to explain the outcomes of these alternative budgetary arrangements, and complement the traditional focus on budgetary participation in target setting with a process‐oriented perspective. We develop hypotheses predicting that TD and BU orientations in the subsequent stages of the budgeting process have different effects on managers’ exchange relationships with the firm, and their behavioural responses. Using survey evidence from German managers across 127 firms we find that a TD orientation in the issuance of guidelines enhances economic exchange and that a BU orientation in the development of the initial budget proposal enhances social exchange, which in turn are associated with reduced slack and higher performance, respectively.     

Relationships among budgetary leadership behavior, managerial budgeting games, and budgetary attitudes: Evidence from Taiwanese corporations

In this paper, we examine the relationship among leadership behavior (contingent reward vs. contingent punishment), managerial budgeting games (devious games vs. economic games), and attitudes towards the budgetary process. Relationships were tested using a structural equation model that was estimated on the basis of questionnaire data from 216 Taiwanese managers. The majority of respondents were accounting/finance managers employed by manufacturing firms. Results reveal that contingent-reward leadership behavior has a direct and positive effect on attitudes toward the budgetary process, and an indirect effect through economic games. On the other hand, we find evidence that contingent-punishment leadership behavior has only an indirect and negative effect on attitudes toward the budgetary process through devious games, especially for non-accounting/finance managers. Managers who play economic games tend to have positive attitudes towards the budgetary process, while those who play devious games do not. The findings should be useful to management in understanding what effective leadership behavior is in the budget-preparation process in Taiwan, and assessing how budgeting games are likely to be adopted by Taiwanese managers.     

Culture, management accounting and managerial performance: Focus Iran

Modern management and control systems may not be equally effective in every country. Budget participation is one of the effective tools in western nations. However, management control tools, in general, and budget participation, in particular, could be ineffective or even dysfunctional in other environments. Hofstede (1980) had suggested that cultural differences among countries are influencing factors. In this study, we investigate the impact of culture, budgetary participation, and management accounting systems on managerial performance in Iran. Three-way analyses of variance are used separately for each of the four cultural Hofstede dimensions. We find convincing evidence that the application of management tools and techniques developed in western countries for effective management performance is not as useful in the Iranian context.     

The effect of performance feedback on prior budgetary participative research using survey methodology: An empirical study

Prior research examining the relation between budgetary participation and job performance explicitly or implicitly posits budgetary participation and intervening variables such as role ambiguity, motivation, job satisfaction, and job-relevant information as independent variables; job performance as the dependent variable. However, these studies are often based on correlated data in which the direction of causation is unknown. This paper uses attribution theory to examine whether job performance affects perceptions of budgetary participation and/or intervening variables (e.g. role ambiguity). Using a laboratory experiment and multivariate analysis of variance (MANOVA), the findings of this study show that knowledge of performance, obtained through performance evaluations and/or external cues, affects individuals’ perceptions regarding budgetary participation, job satisfaction, role ambiguity, motivation, and job-relevant information. The results of the study may undermine correlations between self-reported data on individual characteristics (e.g. motivation) and performance data, as well as correlations between self-reported data on organizational variables (e.g. budgetary participation) and performance data. The study provides suggestions how researchers could overcome problems associated with causal directions in future budget participation studies that link self-reported individual and organizational characteristics to job performance.     

The effect of cost management knowledge on the relationship between budgetary participation and managerial performance

This study investigates the relationship between budget participation (BP), cost management knowledge and managerial performance. It draws on relevant previous research in the theory of work performance and accounting to formulate the research questions. Eighty-three managers from Finnish companies participated in the study. Data were collected from the managers using a mail questionnaire. The results indicate that managers’ cost management knowledge, and especially the balanced perspective of cost management knowledge, moderates the effect of BP on self-perception of managerial performance. It was specifically found that the effect of BP on perceived managerial performance becomes more positive when managers’ cost management knowledge increases. High perception of managerial performance is obtained when both the BP and managers’ cost management knowledge are high. Our results suggest that organizations should improve the cost management knowledge of managers who participate in the budgeting process.     

Testing a Model of Cognitive Budgetary Participation Processes in a Latent Variable Structural Equations Framework

Previous accounting research has suggested that subordinate participation in the budgetary process has two cognitive aspects: (1) participation enhances budget quality, and hence the utility of budgets, by allowing subordinates to introduce private knowledge into the budgetary process, and (2) participation enables subordinates to obtain information that is relevant to performing their jobs. This study tests a model that encompasses both cognitive aspects of budgetary participation. Data were gathered with a questionnaire distributed to managers from a variety of different national origins who were working in many different global locations. The data were analysed with latent variable structural equation modelling, which provides several advantages over more conventional analytic methods generally used in budgetary participation and other behavioural accounting research. The results indicated that participation enhances budget quality and that budget quality, in turn, has a positive effect on budget utility. Participation was also found to have a direct and positive effect on job-relevant information. The results failed to support a proposed indirect effect of participation on job-relevant information through the enhancement of budget quality.     

The Effects of Participation and Job-Relevant Information on the Relationship Between Evaluative Style and Job Satisfaction

This study investigates the intervening effects of budgetary participation and job-relevant information on the relationship between budget emphasis and job satisfaction. It proposes that budgetary participation and job-relevant information are endogenous to budget emphasis. Using the path analytical technique and based on a sample of 152 senior managers, the study found that budget emphasis has an insignificant direct effect on job satisfaction, but a strong indirect effect through job-relevant information and budgetary participation. The results also indicate that job-relevant information has an intervening effect on the relationship between participation and job satisfaction.     

Corporate performance, managerial ownership and endogeneity: A simultaneous equations analysis for the Athens stock exchange

This paper investigates the relationship between managerial ownership and firm performance by considering the endogenous nature of the ownership variables. We conducted our analysis by applying a simultaneous equations framework. We empirically controlled the direction and significance of this relationship, using a panel comprised of 146 firms quoted on the Athens Stock Exchange between 2000 and 2004. The main findings of our analysis indicated that when managerial ownership is treated as endogenous, there is a positive impact on corporate value. Given the particularly high degree of managerial ownership that is observed in the firms listed in the Athens Stock Exchange, we argue that the estimated positive relationship can be mainly explained by the existing high levels of managerial ownership.     

Managerial ownership and firm performance: Evidence from China's privatizations

We examine the relationship between managerial ownership and firm performance for a sample of Chinese State-owned enterprises (SOEs) privatized over the period 1992-2000. The results indicate that managerial ownership has a positive effect on firm performance. Although return on assets (ROA) and return on sales (ROS) decline post-privatization, firms with high managerial ownership and, specially, high CEO ownership, exhibit a smaller performance decline. The difference is highly significant, with or without controlling for residual state ownership and changes in the firm's operating environment. We also find that the influence on firm performance becomes less significant at higher levels of CEO ownership. In contrast, performance continues to increase with managerial ownership. This finding suggests that, beyond a certain point, the distribution of shares would be more effective if extended to the whole management team instead of being limited to the chief executive.     

THE INTERVENING EFFECTS OF PARTICIPATION ON THE RELATIONSHIP BETWEEN PROCEDURAL JUSTICE AND MANAGERIAL PERFORMANCE

Prior studies have suggested that the subordinates’ perception of fairness in their organizations’ procedures is related to improvements in the subordinates’ performance. However, the positive relationship between perception of justice and performance may not be a direct one, but is indirect via the intervening variable of participation. It is likely that the importance of maintaining procedural fairness in the organization will lead senior managers (superiors) to select procedures that allow their subordinates more participation privileges in the organization’s affairs because high participative procedures are perceived to be fair. This increase in participation, in turn, is likely to improve the subordinates’ performance. The results, based on a path analytical model and a sample of 83 senior managers, indicate that procedural justice has an indirect effect on performance via participation. On the basis of these results, it is possible to conclude that the importance of procedural fairness in the organization leads to the selection of procedures with high subordinates’ participation, which, in turn, leads to high managerial performance.