Budgetary participation and performance: some Malaysian evidence
International Journal of Public Sector Management
ISSN: 0951-3558
Article publication date: 22 August 2008
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.
Keywords
Citation
Nor Yahya, M., Nazli Nik Ahmad, N. and Hamid Fatima, A. (2008), "Budgetary participation and performance: some Malaysian evidence", International Journal of Public Sector Management, Vol. 21 No. 6, pp. 658-673. https://doi.org/10.1108/09513550810896523
Publisher
:Emerald Group Publishing Limited
Copyright © 2008, Emerald Group Publishing Limited