The interaction between motivational disposition and participative budgeting

Abstract

Purpose-The purpose of this paper is to report the findings of a study of how dispositional factors of motivation rooted in personality interact with participative budgeting to affect budget goal commitment. Design/methodology/approach-The study is based on a survey among bank managers from a Scandinavian regional bank. To assess the motivational disposition of the bank managers, the short version of the multi-motive grid test (MMG-S) is used. The management accounting variables are measured by traditional and well-tested instruments. Findings-The results indicate that the effect of increased budgetary participation on budget goal commitment is largest for subordinates with a high need for power or a low need for affiliation. For subordinates with a low need for power or a high need for affiliation the effect of budgetary participation is small. Research limitations/implications-The study confirms that the interaction between personal-level psychological variables, e.g. motives, and situational variables, e.g. budget participation, determine action, e.g. budget commitment. Taking personal-level variables into consideration in research on management accounting systems are thus important in studies which include individual level factors. Practical implications-The practical implications are that a general management concept, as budget participation, should be applied with knowledge of how situational factors will interact with the personal characteristics of the involved employees. Originality/value-Most management accounting research that uses psychological theory, focuses on the effects of management accounting on the minds and behaviour of individuals and not on the effect of individual's minds on management accounting as this paper does. The paper is the first to use the MMG-S in a management accounting study.

Effects of psychological capital and managerial attitudes on the relationship between budgetary participation and performance

“…It is understood that budgetary participation influences individuals' performance in job activities geared toward the budgetary context, when they have positive managerial attitudes and commit to achieving the established budgetary goals. Sandalgaard et al (2011) highlight the importance of considering, with regard to analyzing budgetary participation, personal variables, such as managerial attitudes, which were measured through variables of managerial attitudes in relation to the budget, and commitment to budgetary goals. Budgetary participation can influence the mind and behavior (Birnberg et al, 2007), presenting positive effects on managerial attitudes.…”

“…With regard to commitment to budgetary goals, studies conducted in the area of management accounting and psychology postulate a positive relationship between budgetary participation and this behavioral variable (Hashim et al, 2014;Jermias & Yigit, 2013;Macinati & Rizzo, 2014), given that budgetary participation motivates subordinates to accept and commit to their budgetary goals (Chong & Johnson, 2007;Chong & Tak-Wing, 2003;Jermias & Yigit, 2013;Sandalgaard et al, 2011).…”

“…+ Bandura (1977), Birnberg et al (2007), Lu (2011), Merchant (1981), Ni et al (2009), Sandalgaard et al (2011).…”

How individual needs influence motivation effects: a neuroscientific study on McClelland’s need theory

“…For instance, when rewards match a person's need level then this person experiences more positive affect (Brunstein et al 1998), refers to fewer psychosomatic complaints (Baumann et al 2005), and reports an increased feeling of flow (Schüler and Brandstätter 2013). Moreover, need-reward match affects the budget goal commitment of managers (Sandalgaard et al 2011) and enhances trust as well as trustworthiness (Fehr and List 2004). Since the benefits of a high match between a person's needs and the rewards presented by an environment relate to higher brain activations of the reward circuitry (primarily the striatal area), the following hypothesis is stated:…”

Current Practice Performance Measurement Model: A Case Study in Indonesia

“…This is in line with the opinion of the Last (2009), andTaylor et al (2011) who stated that the use of the budget must always be associated with the results to be achieved, and can be measured from the aspects of effectiveness and efficiency. Similarly, studies of Sandalgaard et al (2011) who postulated that the budgeting-based model of performance measurement needs to be adjusted periodically following the development of public purposes, so that local government spending becomes more effective. Afterall, the local governments are the closest to the public at large in terms of providing public services and amenities by government administration.…”