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Budget effectiveness in multinational companies: An empirical examination of environmental interaction on cognitive and affective effects of two dimensions of budgetary participation

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  • Hassel, Lars G.
  • Cunningham, Gary M.

Abstract

This study examines the interaction between two dimensions of budgetary participation and environmental dynamism on perceptions of budget effectiveness in multinational companies. Unique features are dichotomies of: (i) domestic and foreign subunits; (ii) two dimensions of budget participation, communication and influence; and (iii) two facets of effectiveness perceptions, higher level involvement and outcomes of budget process. Results show that benefits of budgetary participation are limited and not consistent. Significant differences between foreign and domestic subunits are apparent. The primary perceived benefits are associated with communication. Budget influence is associated with positive perceptions of top-level involvement in foreign subunits but negative perceptions of outcomes of budget process in both domestic and foreign subunits.

Suggested Citation

  • Hassel, Lars G. & Cunningham, Gary M., 1993. "Budget effectiveness in multinational companies: An empirical examination of environmental interaction on cognitive and affective effects of two dimensions of budgetary participation," Scandinavian Journal of Management, Elsevier, vol. 9(4), pages 299-318, December.
    • Handle: RePEc:eee:scaman:v:9:y:1993:i:4:p:299-318
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    Citations

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    Cited by:

    1. Domenico Raucci & Manuela Paolini, 2021. "Soddisfazione lavorativa e work engagement nelle budgeting practices delle aziende sanitarie pubbliche. Una verifica empirica," MANAGEMENT CONTROL, FrancoAngeli Editore, vol. 2021(1), pages 13-32.
    2. Marco Giovanni Rizzo, 2014. "La relazione tra il livello di coinvolgimento nel processo di budget, il commitment verso gli obiettivi, la soddisfazione lavorativa e i relativi risvolti sulla performance manageriale. I risultati di," MANAGEMENT CONTROL, FrancoAngeli Editore, vol. 2014(1), pages 9-34.
    3. Daniele Cristina Bernd & Ilse Maria Beuren & Celliane Ferraz Pazetto & Carlos Eduardo Facin Lavarda, 2022. "Antecedents of Commitment to Budgetary Goals," RAC - Revista de Administração Contemporânea (Journal of Contemporary Administration), ANPAD - Associação Nacional de Pós-Graduação e Pesquisa em Administração, vol. 26(2), pages 200018-2000.
    4. Chong, Vincent K. & Eggleton, Ian R.C. & Leong, Michele K.C., 2005. "The impact of market competition and budgetary participation on performance and job satisfaction: a research note," The British Accounting Review, Elsevier, vol. 37(1), pages 115-133.
    5. Macinati, Manuela S. & Bozzi, Stefano & Rizzo, Marco Giovanni, 2016. "Budgetary participation and performance: The mediating effects of medical managers’ job engagement and self-efficacy," Health Policy, Elsevier, vol. 120(9), pages 1017-1028.
    6. Byrne, Suzanne & Damon, Fiona, 2008. "To participate or not to participate? Voice and explanation effects on performance in a multi-period budget setting," The British Accounting Review, Elsevier, vol. 40(3), pages 207-227.
    7. Klaus Derfuss, 2015. "Relating Context Variables to Participative Budgeting and Evaluative Use of Performance Measures: A Meta-analysis," Abacus, Accounting Foundation, University of Sydney, vol. 51(2), pages 238-278, June.
    8. Derfuss, Klaus, 2016. "Reconsidering the participative budgeting–performance relation: A meta-analysis regarding the impact of level of analysis, sample selection, measurement, and industry influences," The British Accounting Review, Elsevier, vol. 48(1), pages 17-37.
    9. manuela S. Macinati & Marco G. Rizzo & Gianluca D'Agostino, 2014. "Partecipazione al processo di budget, accuratezza e utilit? delle informazioni di budget e performance. I risultati di un caso studi," MECOSAN, FrancoAngeli Editore, vol. 2014(92), pages 55-75.

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