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.     

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.     

Leadership style, budgetary participation and managerial behavior

This paper reports the results of a study of the effects of leadership style and budgetary participation on performance and job satisfaction. The first two variables have been given much attention in the organizational behavior and management accounting literatures, respectively, while litte consideration has been given to both jointly. The most important results of the study reveal that the two variables interact in their effects on the criterion variables. Under certain leadership conditions, budgetary participation was found to have strong positive effects on performance and job satisfaction. Under other conditions, the reverse was true. The implications of the results for control system design and personnel management are considered.     

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.     

Ritual legitimation, de-coupling and the budgetary process: managing organizational hypocrisies in a multinational company

The study of participation in the budgetary cycle has formed a prominent part of the research literature concerned with the budgetary process. More recently there has emerged a body of literature concerned with exploring the political and symbolic nature of the budgetary process. The paper reports upon the outcomes of an empirical study of the introduction of `budgetary participation' in a division of a European subsidiary of a large North American car manufacturer. We detail the long process of consultation and negotiation within the subsidiary, and between it and the European Headquarters. The study provides a revealing instance of the roles of formal budget participation as a ritual of control and legitimation without the substantive involvement of middle managers and suggested to us the introduction of de-coupling and organizational hypocrisy alongside the introduction of budget participation. The study pays close attention to the contingent effects of the wider political context of the division and the relationships between the division, its organizational context and organizational environment, and how this context played upon the budgetary process in the division. The outcomes that we analyse at `Delta' reflect the de-coupling strategies and organizational hypocrisies commonly found in public sector organizations. In this wider setting the corporation persists with the ritual of `tight' budget negotiation and target setting and apparent underachievement in performance. Yet we conclude that the complex technological and political context to the formation and siting of Delta continued and may continue to support its existence.$g0     

Towards an open systems approach to budgeting

The theory of open systems has been increasingly applied to the study of organizational planning and control systems. This is also true for the area of budgetary control. At present, however, there is a tendency for writers to treat the design problems as an either/or choice between an open or a closed system. This paper argues that the critical decision problem is where in a system closure can be most beneficially applied. It will show that the open systems view, with its emphasis upon the horizontal dimension in an organization, is better suited for designing effective budgetary control systems. The computation of budget variances is chosen as the key step at which the usefulness of this view can be fully appreciated. An alternative budget variances measurement scheme, based upon similar perspectives in the area of job design, is proposed. It is shown that variances computed under the proposed system more fully reflect the interacting nature of most organizations and provide better control information.     

Perceptions and Attitudes of Different User-groups to the Role of the Budget,Budget Pressure and Budget Participation

This paper examines the perceptions and attitudes of three distinct user-groups to three important budget-related issues. The three user-groups are: accountants, senior non-financial managers and first line managers, each of which has direct contact with budget data in their normal work. The issues, which have been examined by questionnaire and interviews in thirteen medium or large UK companies, are: (a) the perception of the role of the budget in medium and large companies; (b) the use of the budget as a control device, the pressure that may be felt when this occurs and the behavioural consequences of such pressure; (c) the degree of participation in budget setting and whether there is any desire for increased participation. In some instances there were important differences between the user-groups; in particular concerning budget pressure and participation. The general textbook picture of the budget-setting process was not confirmed in certain important aspects. These results raise issues concerning the budgetary control process, including the effects of self-generated pressure, and the desire among accountants for greater participation in the budget process.     

Budgetary biasing in organizations: Theoretical framework and empirical evidence

The purpose of this study is to increase the understanding of budgetary biasing behaviour. The findings are of both a theoretical and empirical nature. The theoretical results provide a framework containing two major parts: an explanatory model of budgetary biasing at the individual level, and an organizational model for budgetary biasing. In the empirical part of the study an attempt is made to test the usability of the framework in a relatively large firm with several profit-centers. Biasing action is found to be a result of an interplay of various inter-related factors. Overall, the framework is considered to provide a valid basis for trying to understand and interpret the budgetary biasing behaviour in the firm studied.     

Environmental turbulence and the functions of budgetary control

While budgetary control is a potentially significant tool when the economic environment is unstable and unpredictable, the analysis of its development demonstrates that its use has dramatically expanded over the time since companies have been able to run forecasts. In order to help them develop budgetary control, companies have implemented strategies that have reduced risks and hence improved their ability to make accurate forecasts. Such strategies have taken many forms and varied from one firm to another. They materialized as various types of agreement, including cartels, through strategies to effect market leadership, or via policies of nationalization. In those companies where the environment was stable and risk limitation was not important, budgetary control could be used for various internal purposes. In this respect, the analysis of the management of companies helps us to identify the purposes for which budgetary control is utilized. It is found that budgetary control allows for greater expansion opportunities and provides the means to strengthen the control of management within major companies. Our observations highlight a contradictory aspect of budgetary control: while it is relevant within an unstable environment, it performs best in an environment which is highly managed.     

Inter‐Organizational Cooperation Challenging Hierarchical Accountability: The Dominated Actors in a Municipal Joint Venture

New public management offers a number of solutions to the kinds of problems that public sector organizations experience. In taking an accountability perspective, this paper elaborates on how two of these – strict responsibility for performance, and inter‐organizational cooperation – may conflict. The setting for this study is a joint venture with a dominant municipality and six dominated municipalities as owners. The article examines how horizontal accountability processes may influence the dominated owners’ hierarchical accountability. The ability to account hierarchically for the quality of service within budgetary parameters is problematized, when dominated owners may dismantle their ability to demand horizontal accountability.     

Testing contingency hypotheses in budgetary research: an evaluation of the use of moderated regression analysis

In the contingency literature on the behavioral and organizational effects of budgeting, use of the Moderated Regression Analysis (MRA) technique is prevalent. This technique is used to test contingency hypotheses that predict interaction effects between budgetary and contextual variables. This paper critically evaluates the application of this technique in budgetary research over the last two decades. The results of the analysis indicate that the use and interpretation of MRA often do not conform to proper methodology and theory. The paper further demonstrates that these problems seriously affect the interpretability and conclusions of individual budgetary research papers, and may also affect the budgetary research paradigm as a whole.     

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.     

Budgetary incrementalism in a Christian bureaucracy

This paper presents the second stage of a field based case study focussed upon the planning and control concepts and processes employed by the central offices of the Victorian Synod of the Uniting Church in Australia. Its analysis is informed by grounded theory methodology and develops a micro-theoretical framework of that organization’s planning and control process. A reactive style of planning produces an incremental budgetary mélange that ultimately results in a form of control by compromise. The emergent findings are compared with a selection of relevant prior strategy and not-for-profit organization research. The study presents contextualized insights into the potential limits of ‘rational’ management system operation in such organizations, and the role of budgetary systems in organizational approaches to coping with a complex and dynamic environment.     

JAPANESE URBAN MANAGEMENT ACCOUNTING

Problematic points of Japanese Urban Management Accounting have been reviewed on budgetary control, cost behavior analysis, program accountability, and social significance of administrative services. Policy-making and organizational behavior of municipal offices are the second targets of this analytical work which deals with: management/accountability structure, policy settlement and policy evaluation. Finally, accountability of municipal offices for citizens is analysed for the preparation of governmental social accountability reports.     

Drivers of tight carbon control in the context of climate change regulation

Our study examines the drivers of tight budgetary control in carbon management in the context of climate change regulation. Using the setting of New Zealand Emissions Trading Scheme (ETS), our study explores how firms manage their carbon performance using carbon-focused budgetary control. Based on a survey data from New Zealand firms, including both those with and those without an ETS compliance obligations, our results suggest that economic and regulatory environmental pressures, the level of proactiveness of emissions management strategy, the level of integration of carbon issues in strategic and operational processes and the perceived importance of carbon issues are the significant drivers of tight carbon-focused budgetary control.     

Budgeting in Catholic Parishes: An Exploratory Study

In this paper an aspect of accounting, namely budgeting, has been studied in an organizational context. According to Booth (1993) churches represent 'extreme cases' in which to study the impact of accounting. Following on from Laughlin (1988) Booth considered the sacred and secular divide to be a significant element in the use of accounting by church organizations. The parishes of the Catholic Archdiocese of Melbourne form the context of this study in which evidence is sought for the sacred and secular divide by studying the role of budgeting in the parish. Questions were asked regarding participation in the budgetary process and the development and use of the budget. It was found that there was little consultation or participation in the budgetary process and that the use of the budget was restricted. These findings suggest that the sacred and secular divide operates at the parish level.     

适应人民银行履职特点的财务制度研究

随着国内经济金融的快速发展,尤其在全球金融危机后,中国人民银行的管理职能有了很大的扩展,但现行人民银行财务制度尚未根据其职能变化做出相应调整,这会在一定程度上影响其职能的履行。文章结合央行工作实际分析了当前人民银行财务制度与其履职不相适应的表现,并从强化独立的财务预算体系、建立与职能相统一的财务管理体系、合理设计编制和执行部预算等方面,对建立适应人民银行履职特点的财务制度进行了研究。     

The use of budgetary symbols in the political arena: An historically informed field study

Within accounting, an emerging perspective has held that budgeting is complicit in the creation of a social reality. Seen in such terms, budgetary dialogue is one manner in which societal expectations are expressed, thereby transforming contemporary organizations. Further, it is argued that organizational practice must specifically embody and reproduce these societal expectations in order for the organization to exist. This paper describes a field study directed at assessing the usefulness of such a perspective on budgeting by examining the nature of the budgetary process between a major state university and its state government.     

Is the Term Premium a Risk Premium?

This paper explores whether excess holding period returns on long vis-a-vis short-term securities behave in a manner that is consistent with (1) market efficiency, (2) the time-varying-term-premium variant of the expectations hypothesis, and (3) theories of the term premium that view it as a reward for risk bearing. Both traditional and modern theories of the term premium imply that it should evolve fairly slowly over time as attitudes toward risk and/or perceived covariances with wealth or consumption change. This implies that this period's term premium should have some predictive ability for next period's. However, we find that this quarter's ex-post term premium has zero predictive ability. For monthly rates and returns, the evidence is less clear cut, but again the implied term premia do not behave in a manner consistent with existing theories.     

An examination of contextual factors and individual characteristics affecting technology implementation decisions in auditing

While computer-assisted audit techniques (CAATs) have the potential to increase efficiency and effectiveness of audit engagements, research in this area suggests that such techniques are under-utilized in public accounting. We propose that this condition is due to performance evaluation pressure and the use of budgets for multiple purposes, which result in the misalignment of firm and individual employee goals. We apply technology acceptance and budgeting theories to test this contention as well as potential organizational strategies for reducing the impediments to technology acceptance in the audit profession.Results from an experiment with experienced auditors suggest that firms have the ability to influence the implementation of new technology by using longer-term budget and evaluation periods and by communicating the approval of remote superiors regarding the software. In the absence of such firm interventions, the individual characteristics of the auditor (risk-aversion and perceptions of budgetary pressure) determine implementation decisions. Specifically, risk-seeking individuals are more likely to implement technology regardless of budget pressure perception, but for risk-averse individuals the decision to implement is positively related to perceived budget pressure.