The case for fair budgetary procedures

Purpose - To summarize the findings of empirical studies the authors have conducted regarding budgetary procedures fairness and to discuss key implications of these findings. Design/methodology/approach - Summary and synthesis of the authors' empirical research. Findings - Identifies criteria for, and types of attitudinal and behavioral reactions that managers have toward, formal budgetary procedures fairness and budgetary procedures implementation fairness. Provides information regarding how the two forms of budgetary procedures fairness work together to influence managers' attitudes and behaviors, and how they reduce managers' negative reactions to unfavorable budgets. Presents reasons that fair budgetary procedures are important to managers. Research limitations/implications - The authors' studies used questionnaire data where all variables were measured at a single point in time, which provides little control over unmeasured variables and direction of causality. Future research should seek to expand the sets of criteria for and reactions toward budgetary procedures fairness, as well as to further detail the processes by which budgetary procedures fairness works. Also, relationships involving budgetary procedures fairness should be examined by means of laboratory experiments. Practical implications - Underscores the importance of promoting formal budgetary procedures fairness and budgetary procedures implementation fairness in organizational budgetary systems, and provides concrete guidance in this regard. Originality/value - Provides useful information to accounting and audit staff, budget committee members, supervisors, and other employees involved in designing and implementing organizational budgetary systems and to budgeting researchers.