Manager's perceptions of justice in participative budgeting

In: Akroyd, C. and Burney, L.L. (Ed.) Advances in Management Accounting (Advances in Management Accounting, Vol. 33), Emerald Publishing Limited, Bingley, pp. 127-152. https://doi-org.ezproxy.auckland.ac.nz/10.1108/S1474-787120210000033005

The University of Auckland Business School Research Paper Series

40 Pages Posted: 11 Oct 2021

See all articles by Kevin Dow

Kevin Dow

University of Auckland Business School

Davood Askarany

University of Auckland Business School

Belaynesh G/mariam

Nottingham University

Ulf Henning Richter

Tong Ji University

Date Written: 2021

Abstract

This study contributes to the management accounting (MA) literature by exploring the effect of managers’ perception of justice in the budgeting process (as a subsystem of MA) on their satisfaction and motivation to achieve organizational objectives. Drawing on the Habermasian concept of deliberative democracy, which underscores the importance of gaining legitimacy to achieve desirable outcomes, our analysis focuses on seven constructs related to situational and intrinsic participation, procedural and distributive justice, and attitude on two outcome constructs: satisfaction and motivation. We surveyed managers with an accounting background who are directly involved in the budgeting process and analyzed our data using partial least squares-based path analysis–structural equation modeling (PLS-SEM). The results of this study indicate that both dimensions of justice – distributive and procedural – are positively associated with participation, and in turn, positively impact satisfaction and motivation. Contrary to expectations, managers’ influence on the final budget does not seem to be as important as we expected. Budgeting is an important managerial function that involves setting targets based on an organization’s strategy and allocating resources for its execution. Such a fundamental process requires managers’ participation at various levels to ensure that the process is fair and just. Our study’s findings imply that justice perceptions are an essential fabric of organizational processes that drive human behavior. Specifically, our findings reveal that perception of justice influences participation and satisfaction and motivation. Full article available at https://doi-org.ezproxy.auckland.ac.nz/10.1108/S1474-787120210000033005

Keywords: Participative budgeting, engagement, justice, deliberation, management accounting, survey

Suggested Citation

Dow, Kevin and Askarany, Davood and G/mariam, Belaynesh and Richter, Ulf Henning, Manager's perceptions of justice in participative budgeting (2021). In: Akroyd, C. and Burney, L.L. (Ed.) Advances in Management Accounting (Advances in Management Accounting, Vol. 33), Emerald Publishing Limited, Bingley, pp. 127-152. https://doi-org.ezproxy.auckland.ac.nz/10.1108/S1474-787120210000033005, The University of Auckland Business School Research Paper Series, Available at SSRN: https://ssrn.com/abstract=3936988

Kevin Dow (Contact Author)

University of Auckland Business School ( email )

12 Grafton Rd
Private Bag 92019
Auckland, 1010
New Zealand

Davood Askarany

University of Auckland Business School ( email )

12 Grafton Rd
Private Bag 92019
Auckland, 1010
New Zealand

Belaynesh G/mariam

Nottingham University ( email )

199 Taikang East Rd.
Ningbo, 315100
China

Ulf Henning Richter

Tong Ji University ( email )

1239 Siping Road
Shanghai, 200092
China

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