Budget communication moderate incongruent budget emphasis between the superior and subordinate
1998 (English)In: The Finnish Journal of Business Economics, ISSN 0024-3469, no 1, 11-23 p.Article in journal (Refereed) Published
Subsequent research on the moderating impact of budgetary participation on superior budget emphasis to promote functional budget behaviour has either provided inconsistent (Brownell, 1982; Hirst, 1987 and Dunk, 1989; Hassel, 1993) or situation specific (Brownell and Hirst, 1986; Brownell and Dunk 1991) results.
This study follows the early argument by Otley (1978) that critical for promoting functional budget control is not so much the absolute degree of superior budget emphasis. Instead, incongruent budget emphasis between the superior and the subordinate is the critical factor in the budget process. Incongruent budget emphasis exists when the superior is perceived by the subordinate to place relatively more importance on the budget, than the subordinate himself.
The results from a questionnaire survey in a decentralised corporation support the hypothesis that budget communication, as a dimension of budgetary participation, moderates incongruent budget emphasis. The negative consequences of incongruent budget emphasis are present only when budget communication is low. High budget communication enhances performance even if the incongruence in budget emphasis increases. The paper demonstrates the needs to match budget communication with relative budget emphasis and not the absolute degree of superior budget emphasis as previous studies have argued.
Place, publisher, year, edition, pages
Association for Business Studies Administration, Finland , 1998. no 1, 11-23 p.
Research subject Business Studies
IdentifiersURN: urn:nbn:se:umu:diva-50222OAI: oai:DiVA.org:umu-50222DiVA: diva2:460549