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This paper examines the effect of job‐relevant information on the relationship between management accounting systems (MAS) and task uncertainty affecting managerial performance. Data are obtained via survey questionnaire of a sample of 131 senior managers from manufacturing firms in Australia. The study finds a statistically significant three‐way interaction between the extent of use of broad scope MAS information, job‐relevant information and task uncertainty affecting managerial performance. More specifically, the results suggest that under low task uncertainty situations, the use of more broad scope MAS information, regardless of job‐relevant information, would potentially result in information overload, which is detrimental to managerial performance. On the other hand, the results suggest that under high task uncertainty situations, the use of more broad scope MAS information and high use of job‐relevant information for decision‐making leads to improved managerial performance.

This study examines the moderating effect of feedback on the relationship between budgetary participation and performance. The responses of 79 managers, drawn from a cross‐section of Australian manufacturing companies, to a questionnaire survey were analysed using a multiple regression technique. The results show that independently, budgetary participation and feedback have no effect on performance. The results confirm that the higher the level of feedback, the more positive is the relationship between budgetary participation and performance.

This study aims to examine the role of trust-in-supervisor and organizational commitment on the relationship between a budget-based incentive compensation scheme and job performance.

A survey was conducted involving 120 managers from Australian manufacturing firms listed in the Who’s Who in Business in Australia electronic database. A partial least squares approach was used to assess the psychometric properties of the theoretical model and proposed hypotheses. Data analysis was conducted using WarpPLS Version 5.0.

The results suggest that the reliance on a high budget-based incentive compensation scheme was found to lead to higher trust-in supervisor, which in turn resulted in higher organizational commitment and improved subordinate job performance.

This study is subject to the limitations of survey-based research.

This study may assist top management to better understand the importance of designing an effective budget-based incentive compensation scheme to promote high interpersonal trust and organizational commitment among subordinates. Cultivating a climate of trust may help to enhance interpersonal trust between subordinates and their superior, which in turn may lead to higher levels of organizational commitment and improvement in subordinate job performance.

This paper elucidates and contributes to the existing literature by suggesting that a budget-based incentive compensation scheme can directly affect subordinates’ level of trust in their supervisor, and that trust-in-supervisor can serve as an antecedent to the development and cultivation of subordinates’ commitment to the organization, which in turn improves their job performance.

This study adopts a goal setting theory as the theoretical framework for studying the motivational effect of budgetary participation on job performance. This study proposes that budgetary participation affects job performance via two intervening variables, namely budget goal difficulty and budget goal commitment. The results show that budgetary participation enhances job performance directly and indirectly via budget goal difficulty and budget goal commitment.

This chapter examines the effect of mutual monitoring and the personality trait of need for achievement on subordinates’ budgetary-slack creation in a team-based environment. Experimental results show that the creation of budgetary slack is lower when mutual monitoring is present than when it is absent. The results also show that a two-way interaction between mutual monitoring and the personality trait of need for achievement affects subordinates’ budgetary-slack creation.

This paper uses a laboratory experiment to examine the effect of accountability pressure as a monitoring control tool to mitigate subordinates' propensity to create budgetary slack. The results suggest that budgetary slack is (lowest) highest when accountability pressure is (present) absent under a private information situation. The results further reveal that accountability pressure is positively associated with subordinates' perceived levels of honesty, which in turn is negatively associated with budgetary slack creation. The findings of this paper have important theoretical and practical implications for budgetary control systems design.

This paper examines the effectiveness of the reliance on a leader’s reputation as an informal control tool to mitigate subordinates’ budgetary slack. In addition, it seeks to explain whether this relationship is mediated by subordinates’ truthfulness in revealing their private information.

A laboratory experiment was conducted involving 60 undergraduate business students who participated in the experiment. A 1 × 2 between-subjects design was employed for the experimental study. Each subject assumed the role of a production manager responsible for setting a budget target. The experimental task employed involved a simple decoding task adapted from Chow (1983).

The results of this study indicate that budgetary slack is lower when a leader’s reputation is favourable than when it is unfavourable. In addition, it is found that subordinates’ truthfulness in revealing private information fully mediates the relationship between a leader’s reputation and budgetary slack.

This paper extends the limited literature on the reliance of informal controls in mitigating budgetary slack by examining a leader’s reputation as an informal control. The findings of this study provide important implications for the design of effective management control systems.

This chapter examines the effects of the value attainment and cognitive roles of budgetary participation on job performance. A structural model consisting of variables such as budgetary participation, job-relevant information, job satisfaction, and job performance is proposed and tested using a survey questionnaire on 70 senior managers, drawn from a cross-section of the financial services sector. Their responses are analyzed using a structural equation modeling (SEM) technique. The results reveal that budgetary participation is positively associated with job-relevant information. These results lend support to the cognitive effect of budgetary participation, which suggests that subordinates participate in the budget setting process to share information. In addition, the results suggest that budgetary participation is positively associated with job satisfaction. These results support the value attainment role of budgetary participation, which increases subordinates’ levels of job satisfaction. Furthermore, the results reveal that there are positive relationships between job-relevant information and job satisfaction, job-relevant information and job performance, and job satisfaction and job performance.

This chapter addresses the criticisms that escalation of commitment research has focused only on individual (as opposed to team or group) decision-making. It has been suggested that research findings of individual-based decision on managers’ escalation behaviors may not be applicable in today’s business environment which is increasingly dominated by team or group-based decision. Specifically, this chapter examines the effects of information availability (public vs. private information) and type of responsibility (sole and joint responsibility) on managers’ project evaluation decisions. A laboratory experiment was conducted to test the hypotheses developed for this study. The results indicate that, consistent with prior research, project managers exhibited a greater tendency to continue a failing project under private information than public information conditions. In addition, in the private information condition, project managers with joint responsibility for an investment project expressed a greater tendency to continue a failing project than those with sole responsibility. Implications of our results for the design of management control systems are discussed.

This study examines the effect of employees' perceptions of political connections on performance measurement systems (PMS) design choice and firm performance. In addition, this study explores the moderating effect of social networking, a very common and widely used factor by domestic and foreign multinational firms operating in China, and its joint effect with political connections or PMS design choice on firm performance. We collected survey responses from a sample of 110 managers from manufacturing firms in China. Our results reveal that highly politically connected managers use nonfinancial measures, leading to improved firm performance. Our results suggest that social networking interacts significantly with political connections, and nonfinancial and financial measures on firm performance. The theoretical and practical implications of our findings are discussed.