Participative budgeting: a review of empirical research and practical implications

Philipp Prummer, Patricia Frey, Peter Schentler, H. James Williams and Jaideep Motwani

International Journal of Business Innovation and Research, 2011, vol. 5, issue 5, 559-598

Abstract: The process by which managers have influence on the setting of their budget goals, participative budgeting (PB), has been researched extensively since the 1960s. This paper provides a comprehensive and critical review of the empirical PB literature, which still lacks such a detailed and broad-scope examination, derives practical recommendations and implications, and gives a comparison of the findings of PB literature and the principles of recent budgeting concepts. The empirical PB studies identified (1) the antecedents or determinants of PB, (2) the impact PB has on mental states and performance and (3) PB's effects on the existence of budgetary slack. Summing up the findings, it has to be noted that while the informational role of PB in enhancing subordinate performance is generally established, the results relating to reductions in information asymmetry as well as PB's motivational effects remain ambiguous.

Keywords: budgets; participative budgeting; behavioural accounting research; mental states; subordinate performance; budgetary slack; better budgeting; beyond budgeting; literature review; information asymmetry; motivational effects; motivation. (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijbire:v:5:y:2011:i:5:p:559-598

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