Budgetary Participation's Antecedents and Its Outcomes

Abstract

The purpose of this study is to investigate the antecedents and outcomes of budgetary participation. More specifically, the author proposed that a lack of information foster budgetary participation. A high degree of participation enables managers to have favourable attitudes toward budget attained, and in turn, leads to a low degree of their creation of budgetary slack. Questionnaire data obtained from 115 Vietnamese managers were used to test the proposed model. The results suggest that high asymmetric information fosters high participative budgeting. When participating more in the budgeting process, their attitude toward to budget attained is favourable, and in turn, leads to the decrease of budgetary slack creation. These findings contribute to the budgeting literature in three folds. First, this study takes into account the assumption of participative budgeting when accessing the positive effects of budgetary participation. Second, the results suggests that managers’ attitude toward budget attained mediates the relationship between budgetary participation and managers’ creation of budgetary slack. Third, by using the theory of planned behaviour, this study explains how and why managers participating in the budgeting process fosters the favourable attitude toward budget attained.