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

Listed author(s):
  • Jermias, Johnny
  • Setiawan, Trisnawati
Registered author(s):

    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.

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    File URL: http://www.sciencedirect.com/science/article/pii/S0020-7063(08)00057-5
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    Article provided by Elsevier in its journal The International Journal of Accounting.

    Volume (Year): 43 (2008)
    Issue (Month): 3 (September)
    Pages: 268-292

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    Handle: RePEc:eee:accoun:v:43:y:2008:i:3:p:268-292
    Contact details of provider: Web page: http://www.elsevier.com/locate/inca/620179

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    1. Brownell, Peter & Dunk, Alan S., 1991. "Task uncertainty and its interaction with budgetary participation and budget emphasis: Some methodological issues and empirical investigation," Accounting, Organizations and Society, Elsevier, vol. 16(8), pages 693-703.
    2. Mia, Lokman, 1989. "The impact of participation in budgeting and job difficulty on managerial performance and work motivation: A research note," Accounting, Organizations and Society, Elsevier, vol. 14(4), pages 347-357, July.
    3. Richard M. Burton & Jørgen Lauridsen & Børge Obel, 2002. "Return on Assets Loss from Situational and Contingency Misfits," Management Science, INFORMS, vol. 48(11), pages 1461-1485, November.
    4. Mia, Lokman, 1988. "Managerial attitude, motivation and the effectiveness of budget participation," Accounting, Organizations and Society, Elsevier, vol. 13(5), pages 465-475, August.
    5. Robert M. Marsh, 1992. "The Difference between Participation and Power in Japanese Factories," ILR Review, Cornell University, ILR School, vol. 45(2), pages 250-257, January.
    6. Mark Heuer & Jeffrey L Cummings & Winfred Hutabarat, 1999. "Cultural Stability or Change Among Managers in Indonesia?," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 30(3), pages 599-610, September.
    7. Shields, J. F. & Shields, M. D., 1998. "Antecedents of participative budgeting," Accounting, Organizations and Society, Elsevier, vol. 23(1), pages 49-76, January.
    8. Breton, Albert, 1995. "Organizational hierarchies and bureaucracies: An integrative essay," European Journal of Political Economy, Elsevier, vol. 11(3), pages 411-440, September.
    9. Hartmann, Frank G. H. & Moers, Frank, 1999. "Testing contingency hypotheses in budgetary research: an evaluation of the use of moderated regression analysis," Accounting, Organizations and Society, Elsevier, vol. 24(4), pages 291-315, May.
    10. Chenhall, Robert H. & Brownell, Peter, 1988. "The effect of participative budgeting on job satisfaction and performance: Role ambiguity as an intervening variable," Accounting, Organizations and Society, Elsevier, vol. 13(3), pages 225-233, April.
    11. Bisbe, Josep & Otley, David, 2004. "The effects of the interactive use of management control systems on product innovation," Accounting, Organizations and Society, Elsevier, vol. 29(8), pages 709-737, November.
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