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Influence of Budgetary Participation on Job Performance

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Budgetary participation can be defined as a concept where low level managers are involved and have influence on budget preparation for their responsibility centers. Budget participation establishes communication between low and high level managers, improves the commitment of low level managers towards the organization, and increases the sense of responsibility for them to achieve the target they help set in the budget. Therefore, budgetary participation will improve the motivation of low level managers towards their job and consequently improve their job performance. This study examines the influence of budgetary participation on job performance. The respondents are 103 low level managers from the farming industry in North Sumatera, Indonesia. Consistent with findings of several previous studies, the results of this initial analysis show that budget participation has a positive influence on job performance. This study also found that the relationship is weak, in line with previous studies that claim various other factors influence the relationship between budgetary participation and job performance. Further analysis will include other variables to test for their moderating and intervening effects on the relationship between these two variables.

Document Type: Research Article


Publication date: January 1, 2009

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