Budget participation and informational asymmetry: a study in a multinational company

Abstract

The objective of this study is to verify the influence of budgetary participation on the reduction of information asymmetry in the budget process in a multinational company, having taken for granted that the participatory budget minimizes information asymmetry. Therefore, descriptive research was carried out, in the form of a case study and qualitative type, through interviews and direct observation. The study was applied in a business unit of a multinational company that has the consolidated budget practice. The results of the research show that the company has a participatory budget, for all sectors and managers are directly involved in its preparation. Moreover, several meetings are held to discuss and define the budget targets. However, in this study this condition did not minimize information asymmetry, as most responses focused on a single item, indicating that the sub-manager/subordinate has more information than his superior.

Influência do clima ético na justiça procedimental e no comprometimento organizacional: interação da participação orçamentária

“…In this way, it contributes to the flow of studies which point to organizational commitment as a consequence of budgetary participation (Parker & Kyj, 2006;Chong & Johnson, 2007). This study builds on previous works (Lavarda & Almeida, 2013;Lunardi, Zonatto, & Nascimento, 2020;Monteiro et al, 2020) by demonstrating that managerial participation in the budgetary elaboration process intensifies the relationship between procedural justice and organizational commitment. This is because the perception of procedural justice encompasses participation in the budgetary elaboration process, the discussion of performance measures, and the establishment of goals.…”

“…Along the same lines, the literature concerning managerial control suggests that participation in the budgetary process offers various benefits to the organization (Nouri & Parker, 1998;Lavarda & Almeida, 2013;Weber & Nascimento, 2019;Lunardi, Zonatto, & Nascimento, 2020;Rengel et al, 2020), among which stand out an increase in procedural justice and organizational commitment (Lau & Tan, 2006;Parker & Kyj, 2006;Chong & Johnson, 2007;Kohlmeyer et al, 2014;Rengel et al, 2020), and greater communication between the entities of the hierarchy (Chong, Eggleton & Leong, 2005;Lunardi, Zonatto, & Nascimento, 2020). Thus, it is argued that budgetary participation can increase managerial commitment by involving these individuals in budgetary decisions (Subramaniam et al, 2002).…”

“…: Shin et al, 2015;Goebel & Weißenberger, 2017), and their effect on the behavior of managers and the organization are unclear. Studies suggest the need for more research which relates budgetary participation with other variables (Shields & Shields, 1998;Chong & Johnson, 2007;Lavarda & Almeida, 2013;Lunardi, Zonatto, & Nascimento, 2020). There have been findings that organizational commitment is a consequence of budgetary participation, but how this relationship occurs remains unclear (Parker & Kyj, 2006;Chong & Johnson, 2007).…”

Effects of Budgetary Participation on Managerial Attitudes, Satisfaction, and Managerial Performance

“…Participation is defined when managers are involved in setting budgetary goals and objectives (Milani, 1975;Young, 1985;Shields & Shields, 1998;Subramaniam & Ashkanasy, 2001). Among the many reasons the literature lists for budgetary participation, the following stand out: the opportunity for information sharing (Kyj & Parker, 2008), motivation (Merchant, 2007;Kyj & Parker, 2008) and employee satisfaction (Kyj & Parker, 2008), organizational justice perception communication (Kyj & Parker, 2008), open communication and employee interaction (Lavarda & Almeida, 2013), increased positive attitudes (Merchant, 2007), and increased work performance (Argyris, 1952;Kenis, 1979;Mia, 1988;Nouri & Parker, 1998;Zonatto, 2014;Jacomossi et al, 2018;Degenhart et al, 2019;Lunardi et al, 2020).…”

Determinan Akuntabilitas Kinerja Sekolah Menengah Negeri Se-Pulau Lombok

“…Darwanis dan Chairunnisa (2013) menyatakan bahwa anggaran secara umum dapat diartikan sebagai rencana keuangan yang mencerminkan pilihan kebijaksanaan untuk suatu periode di masa yang akan datang. Informasi yang jelas, tepat waktu, dan obyektif sangat diperlukan dalam proses penyusunan anggaran (Lavarda dan Almeida, 2013). Adanya informasi yang memadai akan memudahkan penyusun anggaran untuk dapat menyusun anggaran dengan baik.…”