Mediating role of goal clarity and commitment between budget participation and managerial performance moderated by leadership styles

Involving employees and stakeholders in the budgeting process enriches decision￾making through diverse perspectives that could foster trust and significantly heightens the likelihood of achieving organizational goals. This inclusive approach could also cultivate a sense of ownership and commitment among participants, further driving the successful implementation of budgetary strategies. Although a substantial body of literature has outlined the theoretical mechanisms through which employee participation in the budget process might boost managerial performance, the generally inconsistent and unclear findings of empirical studies have kept researchers interested in exploring this topic further. The present study has investigated the simultaneous impact of motivational and cognitive variables of budget participation on managerial performance. Based on the goal-setting theory and the literature review, this study has examined the direct effect of budget participation on goal clarity, commitment, and managerial performance, as well as the direct relationship between goal clarity, commitment, and managerial performance. In addition, budget goal clarity and commitment have been determined to be mediators in linking the motivational and cognitive roles of budget participation and their effects on managerial performance. This study has also explored the moderator role of leadership style (directive and participative) in the relationship between budget goal clarity and budget goal commitment. This study drew upon data from a questionnaire survey collected from 373 managers within public universities in Iraq with 58% response rate, which was analyzed using the PLS-SEM. The key findings highlighted that budget participation has enhanced budget goal clarity and commitment, and bolstered managerial performance. The results also underscored the partial mediating role of budget goal clarity and commitment in linking budget participation to enhanced managerial performance. Participative leadership was found to amplify the positive associations between budget goal clarity and commitment to managerial performance. However, directive leadership can pose several challenges, which could potentially diminish the effectiveness of budget goal commitment and its resultant managerial performance. This study has added vision to the mediating roles of budget goal clarity and commitment, and the moderating role of participative leadership, especially in developing countries, for example, Iraq. It has also contributed by adding insights into the management accounting literature regarding a more complex process of explaining the performance of employees generated by their participation in the budgeting process. The study emphasizes the significance of promoting budget goal clarity and commitment through the participation of employees to enhance the benefits of budget participation by involving low- to middle-level managers in budgetary processes to enhance performance. In addition, the study helps policymakers strategically re-evaluate leadership styles in educational institutions and adopt leadership styles, such as participative leadership, to foster budget goal clarity and commitment.

Text 125160 - Full Text.pdf Download (4MB) Text SPE 2023 12 - Declaration Form.pdf Restricted to Repository staff only Download (690kB) Text SPE 2023 12 - Full Text.pdf Restricted to Repository staff only Download (4MB) Official URL or Download Paper: http://ethesis.upm.edu.my/id/eprint/18820

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