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The role of trust and budget emphasis in managing degree of autonomy and performance

Author

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  • Sakthi Mahenthiran
  • Ben Shaw-Ching Liu
  • Zalina Hashim

Abstract

This study examines the relationship between supervisor's budgetary style, supervisor's trust in subordinate and their effects on the subunit's performance of two newly privatised Malaysian utility companies. A framework linking uncertainty and organisational growth to subunit's performance is tested using structural equation modelling. In addition, the study examines the mediating role of trust in the relation between supervisor's budgetary style as a control system and subordinate's autonomy, which in turn could affect subunit's performance. Results confirm the hypothesised relationships. These findings contribute to understanding the role that trust plays in institutionalising a participative budgeting process during organisational change.

Suggested Citation

  • Sakthi Mahenthiran & Ben Shaw-Ching Liu & Zalina Hashim, 2010. "The role of trust and budget emphasis in managing degree of autonomy and performance," International Journal of Business and Systems Research, Inderscience Enterprises Ltd, vol. 4(1), pages 62-81.
    • Handle: RePEc:ids:ijbsre:v:4:y:2010:i:1:p:62-81
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