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Budgetary participation and performance: some Malaysian evidence

Yahya, Mohd Nor Yahya and Nik Ahmad, Nik Nazli and Fatima, Abdul Hamid (2008) Budgetary participation and performance: some Malaysian evidence. International Journal of Public Sector Management, 21 (6). pp. 658-673. ISSN 0951-3558

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Abstract

Purpose – The purpose of this paper is to explore the budgetary participation and performance (BPP) relationship in a public sector organization in a developing country, Malaysia. It also attempts to examine whether organizational commitment and perception of innovation mediate the BPP relationship. Design/methodology/approach – A total of 111 budget managers in the Ministry of Defence, Malaysia, participated in the survey. Response rate was 74 per cent. A path analysis was utilised to examine the direct and indirect effects of budgetary participation on managerial performance. Findings – Budgetary participation affects managerial performance via the mediating variable of organizational commitment but not perception of innovation. There is a direct relationship between budgetary participation, managerial performance, organizational commitment and perception of innovation. Research limitations/implications – This is a study conducted in the Malaysian Ministry of Defence (MINDEF), thus results may not be generalizable to other organizations. It involves only two intervening variables; organizational commitment and perception of innovation and uses the intervening variable model to explain the budgetary participation and performance relationship. Budgetary participation improves managerial performance in MINDEF in two ways; directly, as a consequence of management involvement in the budgetary process, as well as indirectly, when managers’ commitment to the organization increases due to their participation and involvement in the budgetary process. Originality/value – This paper fills a gap in the literature as very few studies have examined budgetary participation in a developing country and in a public sector organization.

Item Type: Article (Journal)
Additional Information: 1371/432
Uncontrolled Keywords: Budgetary control, Management effectiveness, Organizational effectiveness, Perception, Malaysia, Public sector oganizations
Subjects: H Social Sciences > H Social Sciences (General)
H Social Sciences > HC Economic History and Conditions
Kulliyyahs/Centres/Divisions/Institutes: Kulliyyah of Economics and Management Sciences
Depositing User: Dr. Nik Nazli Nik Ahmad
Date Deposited: 17 Jun 2011 14:52
Last Modified: 17 Jun 2011 14:52
URI: http://irep.iium.edu.my/id/eprint/432

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