The Performance Effects of Participative Budgeting: An Integration of Intervening
and Moderating Variables
Dennis Murray
This paper has two objectives. First, a structural model of the relationship
between participative budgeting and performance is presented. This model
is based on Locke's [1968] goal theory and is consistent with, but somewhat
more detailed than, those models which have typically appeared in the accounting
literature. Second, based on the intervening linkages contained in the
structural model, variables that may moderate the effect of participation
on performance are identified. This integration of intervening and moderating
variables provides a fuller understanding of how and when participative
budgeting works. Accordingly, it can serve as a basis for normative recommendations
regarding the use of participative budgeting in various managerial settings
and be used to identify issues for future research.
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