To participate or not to participate? Voice and explanation effects on performance in a multi-period budget setting

Byrne, Suzanne and Damon, Fiona (2008) To participate or not to participate? Voice and explanation effects on performance in a multi-period budget setting. British Accounting Review, 40 (3). pp. 207-227. ISSN 0890-8389

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Under what circumstances does giving a voice and explanation to a manager in a budget allocation setting improve their performance? The research into whether or not managers should participate or have a voice in setting their budget allocation show conflicting results on performance. This seems largely as a result of the variables being measured in importantly different ways.
Whether or not the voice influences the final budget allocation and whether the budget is perceived as unfair, unfavourable or unattainable needs to be clearly articulated in the research design.
This study demonstrates that the circumstances in which voice and explanation improve performance depend on whether or not the budget allocation is perceived as unfair. To date, it has been accepted practice that managers should participate in the budget setting process. However, it may be better to set a budget and explain its rationale. Over multiple budget periods care should be taken with the type of explanation given, because simply repeating last year's reason will discourage higher performance.

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Item Type: Article (Commonwealth Reporting Category C)
Refereed: Yes
Item Status: Live Archive
Additional Information: © 2008 Elsevier Ltd. Permanent restricted access to published version due to publisher copyright policy.
Faculty / Department / School: Historic - Faculty of Business - School of Accounting, Economics and Finance
Date Deposited: 15 Nov 2009 01:08
Last Modified: 12 Feb 2015 23:43
Uncontrolled Keywords: participative budgeting; explanation; voice; organisational justice; fairness
Fields of Research : 15 Commerce, Management, Tourism and Services > 1503 Business and Management > 150311 Organisational Behaviour
22 Philosophy and Religious Studies > 2201 Applied Ethics > 220104 Human Rights and Justice Issues
17 Psychology and Cognitive Sciences > 1701 Psychology > 170107 Industrial and Organisational Psychology
Socio-Economic Objective: B Economic Development > 90 Commercial Services and Tourism > 9002 Property, Business Support Services and Trade > 900202 Professional, Scientific and Technical Services
Identification Number or DOI: 10.1016/

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