Budgetary Participation in Turkey: The Effects of Information Asymmetry, Goal Commitment, and Role Ambiguity on Job Satisfaction and Performance

JOURNAL OF INTERNATIONAL ACCOUNTING RESEARCH American Accounting AssociationVol. 12, No. 1 DOI: 10.2308/jiar-503852013pp. 29–54

Budgetary Participation in Turkey: TheEffects of Information Asymmetry, Goal

Commitment, and Role Ambiguity on JobSatisfaction and Performance

Johnny Jermias and Fatih Yigit

ABSTRACT: This study empirically investigates the antecedent, mediating, and

outcome variables of budgetary participation in Turkey. Turkey is an interesting setting

to investigate the impact of budgetary participation on job satisfaction and performance

because of its unique cultural and institutional factors. We propose that the information

asymmetry between superiors and subordinates creates the need for budgetary

participation, and the outcomes of budgetary participation (i.e., job satisfaction and

performance) will be mediated by goal commitment and role ambiguity.

Based on a questionnaire survey of 194 mid-level managers in Turkey, we find that

role ambiguity mediates the budgetary participation–job satisfaction and budgetary

participation-performance relationships. The results are consistent with the view that the

primary benefit of budgetary participation is to decrease role ambiguity, leading to more

job satisfaction and better performance. Furthermore, we find that goal commitment

mediates the budgetary participation-performance relationship. This result suggests that

participation in the budgeting process increases goal commitment, which in turn leads to

better performance. This study will be beneficial for companies in general and for

organizations in developing countries in particular to realize that budgetary participation

alone does not improve job satisfaction and performance. Rather, it is the increased

commitment and decreased role ambiguity that results from managers’ participation in

the budgetary process that improves job satisfaction and performance.

Keywords: budgetary participation; information asymmetry; goal commitment; role

ambiguity; job satisfaction; performance.

JEL Classifications: D21; G32; L1; M41.

Johnny Jermias is an Associate Professor at Simon Fraser University, and Fatih Yigit is a Research Assistantat Istanbul Medeniyet University.

We thank the companies and their representatives for their generosity to provide data used in this study. We are gratefulfor insightful comments and suggestions from Stephen Salter (editor), two anonymous reviewers of this journal, IreneGordon, Dennis Chung, Karel Hrazdil, Yasheng Chen, Kim Trottier, as well as participants of the Simon FraserUniversity accounting seminar, the 2011 Canadian Academic Accounting Association Annual Conference, and the 2011European Accounting Association Annual Congress.

Editor’s note: Accepted by Stephen B. Salter, Associate Editor.

Published Online: December 2012

29

I. INTRODUCTION

An abundance of research investigates the relationship between participative budgeting and

performance. The popularity of this topic is based on the widely held premise that

participation in decision making in general, and in the budget-setting process in particular,

is the ideal approach to governance. Researchers have argued that participative budgeting leads to

more job satisfaction and better performance for subordinates because it leads them to perceive that

they are being treated by their superiors as valuable partners in the decision-making process, which

in turn creates higher morale, greater motivation, and higher commitment.

While previous research has shed light on the relationships between budgetary participation and

performance, most studies were conducted in developed countries such as the United States and

Australia. Few studies have looked at these issues in developing countries. Our study addresses this

gap by investigating the antecedents, mediating variables, and consequences of budgetary participation

in Turkey, a developing VISTA country that is playing an important role in international markets.1

The impact of budgetary participation on various outcome variables might be different in the

Turkish setting than in a developed country. For example, Jermias and Setiawan (2008) found that

top management in developing countries is often reluctant to share information with subordinates

because it fears the subordinates will manipulate and misinterpret that information. This is partly

because many senior managers are politicians and like to maintain a power differential with their

subordinates (Alam 1997). In a similar vein, Uddin and Hopper (2001) assert that managers in

developing countries might participate in the budgeting process because they fear being punished,

not because they want to make meaningful contributions, as these countries are often characterized

by high unemployment rates and do not adequately recognize and protect human rights.

Furthermore, few studies have used a comprehensive model that considers not only the

antecedent conditions that create a demand for participation, but also variables that mediate the

relationships between budgetary participation and performance. Some researchers have argued that

incorporating the antecedents and mediating variables may lead to a better understanding of the

relationship between budgetary participation and performance (e.g., Hopwood 1976; Chenhall and

Brownell 1988; Kren 1992; Shields and Young 1993; Shields and Shields 1998; Parker and Kyj

2006; Leach-Lopez et al. 2007; Chong and Johnson 2007). For example, Shields and Young (1993)

suggest that the mixed results of previous studies are due to the use of incomplete models. They

argue that researchers need to develop models that consider the particular antecedents of

participative budgeting and investigate the consequences of participative budgeting by taking

theoretically based intervening variables into account. Only two recent studies have done this (e.g.,

Maiga 2005; Chong and Johnson 2007), and both use task uncertainty as the antecedent of budget

participation. In contrast, our study uses information asymmetry as the antecedent of budgetary

participation. We use both an agency theory perspective and Turkey’s cultural perspective to

develop our hypotheses regarding the relation between information asymmetry and budgetary

participation. Therein, we also argue that goal commitment and role ambiguity will mediate the

relationship between budgetary participation and job satisfaction, as well as budgetary participation

and performance. We propose that the relation between budgetary participation and both job

satisfaction and performance is indirect, operating initially via the effect of participation in reducing

role ambiguity, and then by decreased role ambiguity improving the outcome variables. Similarly,

we argue that the relation between budgetary participation and both job satisfaction and

performance is indirect, operating initially through the effect of participation in increasing goal

commitment, and then by increased goal commitment improving job satisfaction/performance.

1 The term VISTA refers to Vietnam, Indonesia, South Africa, Turkey, and Argentina, and has been coined in recent yearsto address the undeniable and inevitable economic emergence of this new set of actors (Watanabe 2010).

30 Jermias and Yigit

Journal of International Accounting ResearchVolume 12, No. 1, 2013

Based on a survey of 194 mid-level managers in Turkey, we find that budgetary participation

decreases managers’ role ambiguity, resulting in more job satisfaction and better performance.

Furthermore, we find that goal commitment mediates the budgetary participation-performance

relationship such that it increases participation, which leads to higher commitment and in turn

improved performance. However, the mediating effect of goal commitment on the relationship

between budgetary participation and job satisfaction is not statistically significant.

The results indicate that the direct effect of budgetary participation on performance is not

significant when goal commitment and role ambiguity are mediating variables, but the indirect

effects of budgetary participation on performance running through goal commitment and role

ambiguity are positive and significant. These results suggest that the main benefits of budgetary

participation are an increase in managers’ commitment to their goals and a decrease in role

ambiguity. In other words, when managers are committed to their goals and have a clear

understanding of the role they are expected to perform, they will perform better. With respect to the

antecedent variable, we cannot find evidence of a relation between information asymmetry and

budgetary participation.

This study contributes to existing literature on budgetary participation and practice in three

ways. First, the study was conducted in Turkey, and no previous study on budgetary participation in

Turkey can be found in the literature. Turkey is a particularly interesting setting for such a study

because of its unique cultural and institutional factors. National culture may significantly influence

the extent of budgetary participation and its role in affecting job satisfaction and performance. For

example, in Turkey, the superior-subordinate relationship often goes beyond the workplace and

superiors tend to treat their subordinates as their extended family; subordinates often share private

information informally and not merely during the budgeting process (Kabasakal and Bodur 2002).

Furthermore, Turkish people have a higher uncertainty avoidance index than American and

Australian people, and preference for team-oriented charismatic leaders (House et al. 1999).

Managers in Turkey might therefore participate in the budgeting process not to share their private

information, but to obtain clear guidance about how to perform their task and to reduce their role

ambiguity, which would lead to better performance.

Institutionally, our respondents are managers of firms owned by the Istanbul Metropolitan

Municipality that operate in various sectors of the economy, including road construction, mineral

water filling, sea transportation, car park management, and technology. The government (i.e.,

municipalities) owns most Turkish large-size companies and therefore has a significant influence on

the management of these companies. However, although the Istanbul Metropolitan Municipality

owns these firms, they are by law private entities and have not been given monopoly rights. Instead,

they have to compete against private companies for contracts with the municipality. As most of

these firms are the biggest entities in their respective sectors, they usually win their bids to

undertake the municipality’s projects. Most of these firms also provide services to the public. Given

these unique characteristics, participation might have a different effect on the performance of the

firms we chose to study than on firms in more conventional free-market economies, such as the U.S.

and Australia (where most of the previous studies were conducted).

Second, the results of this study indicate that the direct effect of participation on performance is

not statistically significant. These results are consistent with those reported by Chenhall and

Brownell (1988). Thus, simply allowing managers to participate in the budgeting process does not

have a beneficial effect for the company. The benefits of participating in the budgeting process can

only be realized when managers have a better understanding of their role, perceive the goals they

are accountable for as attainable, and are committed to those goals.

Finally, our study incorporates the antecedent, mediating, and outcome variables of budgetary

participation. As such, this study sheds important light on the antecedents of budgetary participation

and the conditions under which budgetary participation improves job satisfaction and performance.

Budgetary Participation in Turkey 31


The remainder of the paper is organized as follows. Section II discusses previous related

literature in order to develop the hypotheses. Section III explains the research design, sample

selection, and variable measurement. Section IV presents the results of the statistical analyses, and

Section V provides a general discussion of the main results, the limitations of the study, and

directions for future research.

II. RELATED LITERATURE AND HYPOTHESES

Participative budgeting has attracted much attention in accounting and management literature.

Earlier studies tend to focus on the consequences of participative budgeting and have reported

mixed results (e.g., Milani 1975; Brownell 1981; Brownell and McInnes 1986). Shields and Young

(1993) argue that the mixed results of participative budgeting research are due to the incomplete

models used by previous researchers. Brownell (1981) suggests that researchers need to specify the

conditions under which budgetary participation would be effective before investigating its

consequences. Shields and Young (1993) take this issue one step further in proposing that

researchers need to develop theories that consider not only the antecedents of participative

budgeting, but also the variables that might mediate the relationship between participative

budgeting and its various outcomes (i.e., job satisfaction and performance).

A limited number of studies on participative budgeting have been conducted in developing

countries. Leach-Lopez et al. (2007) investigate the impact of budgetary participation on job

satisfaction and performance using Mexican and U.S. managers. They find that budgetary

participation positively affects job satisfaction and performance. In a similar vein, Leach-Lopez et

al. (2007), who conduct a survey among South Korean managers, find that budgetary participation

positively affects job satisfaction, and in turn, positively affects performance. Lau et al. (1995) use a

sample of 240 functional heads from 80 Singapore manufacturing companies to investigate the joint

effect of budget emphasis, budgetary participation, and task characteristics on job-related tension

and managerial performance. They find that in a high-task-difficulty situation, budgetary

participation is positively related to performance. In a low-task-difficulty situation, however, they

find that the effect of budgetary participation on managerial performance is moderated by the extent

of budget emphasis. In a subsequent study using a sample of 189 Australian and Singaporean

financial services sector managers, Lau and Tan (1998) find that budgetary participation interacts

with task difficulty to affect performance.

Several studies have been conducted in Islamic countries to investigate the relation between

budgetary participation and various outcome variables. The results are inconclusive. Two studies

provide evidence that budgetary participation has a positive effect on performance. Noor and

Othman (2012) examine the relation between budgetary participation, organizational commitment,

and managerial performance in the Malaysian public sector. They find that budgetary participation

is positively associated with both organizational commitment and managerial performance.

Mahjoub and Halioui (2012) investigate the impact of budgetary participation on organizational

performance using a sample of 89 Tunisian accounting and finance managers. Their results indicate

that the level of budgetary participation is positively associated with higher organizational

performance as measured by market share, growth rate, profit, prosperity, and innovativeness.

Other studies, however, report a negative association between budgetary participation and

performance (e.g., Douglas et al. 2007; Etemadi et al. 2009; Dakhli 2010) or find that budgetary

participation does not have any impact on performance (Hosen et al. 2011). Using a sample of 395

Egyptian managers, Douglas et al. (2007) find that budgetary participation is negatively associated

with performance as measured by incentive to create slack and slack creation behavior. Etemadi et

al. (2009) use a sample of 300 Iranian mid-level managers working for the manufacturing

companies listed in the Tehran Stock Exchange. They find that budgetary participation is negatively



and significantly related to managerial performance. Dakhli (2010) uses a sample of 75 mid-level

managers in Tunisia. She finds that budgetary participation is negatively associated with job

satisfaction. Hosen et al. (2011) investigate the influence of national culture on the level of

budgetary participation and performance using a sample of 178 managers of manufacturing

companies in Libya. Their results indicate that the relation between budgetary participation and

performance is not statistically significant.

Joshi et al. (2003) and Nasser et al. (2011) investigate the influence of culture on the level of

budgetary participation in two Islamic countries. Using a sample of 54 respondents from companies

in Bahrain, Joshi et al. (2003) find that the level of participation is high for both listed and

non-listed companies in Bahrain. They argue that the high level of participation is due to the high

collective cultural dimension for Bahrain, in which participation is encouraged since the

superior-subordinate relationships are characterized by a tightly knit social framework. In a similar

vein, Nasser et al. (2011) investigate the relation between various organizational variables on the

level of budgetary participation. Using 77 cost center managers in Jordanian universities, they find

that organizational related factors—such as size, type, or level of hierarchy—are not correlated with

the level of budgetary participation.

More recent studies on participative budgeting have incorporated antecedents and/or mediating

variables (e.g., Wentzel 2002; Lau and Tan 2003; Parker and Kyj 2006; Leach-Lopez et al. 2007;

Chong and Johnson 2007). With the exception of Chong and Johnson (2007) and Maiga (2005),

none of these studies incorporates the consequences of participative budgeting. Our study differs

from Chong and Johnson (2007) and Maiga (2005) in three ways. First, we use information

asymmetry as the antecedent of budgetary participation, while the other two studies use task

uncertainty as the antecedent variable. Shields and Young (1993) argue that information sharing is

the most important antecedent for budgetary participation. Through participation, subordinates have

the opportunity to communicate their private information, while superiors can clarify the tasks

required to accomplish the budget (Kirby et al. 1991).

Second, our study uses both role ambiguity and goal commitment as mediating variables, while

Chong and Johnson (2007) and Maiga (2005) use only goal commitment. It is salient to note that

Chenhall and Brownell (1988) find that the use of role ambiguity as a mediating variable provides useful

insights into understanding the impact of budgetary participation on job satisfaction and performance.

Third, we use both job satisfaction and performance as the outcome variables, while the other

two studies only use performance. This is important because previous studies often consider job

satisfaction as a precondition for improved performance. However, Chenhall and Brownell (1988)

find that budgetary participation is significantly related to job satisfaction, but not to performance.

By considering job satisfaction and performance as two separate outcomes of budgetary

participation, our study might provide useful insights into the inconsistent results reported by

previous studies with regard to the relation between job satisfaction and performance.

Like Shields and Young (1993), we use a comprehensive model by considering the antecedent

(information asymmetry) and mediating variables (goal commitment and role ambiguity) of

budgetary participation and its consequences ( job satisfaction and performance).2

2 Job satisfaction has traditionally been thought by many researchers and practitioners to influence jobperformance. Recent studies (e.g., Bowling 2007), however, have revealed that the cause-and-effect relationshipbetween job satisfaction and performance does not exist. Bowling (2007), for example, found that job satisfactionand performance are related because the two constructs are the results of employees’ attitudes toward their jobs.Therefore, in this study, we consider job satisfaction and performance as two separate outcomes of budgetaryparticipation. Chenhall and Brownell (1988) also consider job satisfaction and performance as two separateoutcomes of budgetary participation.



Antecedent Variable: Information Asymmetry

Agency theory prescribes that subordinates have specific, private information about the tasks

they are held accountable for (Christensen 1982). According to this theory, subordinates tend to be

reluctant to reveal this information to their superiors unless the superiors will otherwise incur

significant monitoring costs or provide subordinates with an incentive for doing so. Nouri and

Parker (1996) argue that budgetary participation allows subordinates to reveal their private

information, which leads to better performance on their part and to economic gains for the

company. Allowing subordinates to participate in the budgeting process suggests that they are

perceived as valuable members of the company (Lawler 1981). As a result, they are more likely to

perceive the company’s goals as consistent with their personal aspirations, which will in turn

increase their motivation to achieve those goals (Locke 1968). Participation in the budget-setting

process also tends to result in more realistic budgets that set attainable targets.

An extensive review of studies on participative decision making led Locke and Schweiger

(1979) to report that information sharing is the single most important determinant of the

effectiveness of participative decision making. Similarly, Shields and Young (1993) contend that

one of the primary benefits of budgetary participation is that it facilitates the sharing of information

during the budget-setting process. Locke et al. (1981) concur with this observation in stating that

the most successful function of participation is that it allows workers to express good ideas about

how to improve their performance.

Two empirical studies (Shields and Shields 1998; Shields and Young 1993) report that

information asymmetry creates the need for budgetary participation. Based on a questionnaire

survey administered to 98 corporate controllers working for a number of Standard & Poor’s 500

companies, Shields and Young (1993) find that there is a positive association between the extent of

information asymmetry and the use of participative budgeting. Shields and Shields (1998) conduct

a survey among 60 managers who are graduates of an executive M.B.A. program. They find that the

need to share information is positively and significantly related to managers’ reasons for

participating in the budgeting process.

The above arguments indicate that information asymmetry is an important determinant of the

need for budgetary participation. The information sharing that is facilitated by budgetary

participation allows superiors to gain access to subordinates’ private information, which in turn

helps them to develop better strategies for meeting the budgets (Murray 1990) and to provide

subordinates with adequate resources (Nouri and Parker 1996). For subordinates, budgetary

participation might provide an opportunity to communicate perceptions of business opportunities

and risks, to negotiate more reasonable budgets, and to ensure that the budget is aligned with their

personal aspirations. Therefore, the higher the information asymmetry between superiors and

subordinates, the greater the need for budgetary participation.

Within the context of our study in Turkey, we offer an alternative view of the relationship

between information asymmetry and budgetary participation. Sumer (2000) finds that in a

paternalistic society such as Turkey, leaders have the acceptance and authority to evaluate

subordinates. However, superiors who are paternalistic leaders function like fathers to their

subordinates and usually are responsible for the well-being of subordinates in a holistic sense. In

return, the subordinates are expected to obey their leader, and show respect and loyalty (Kabasakal

and Bodur 1998). Superiors tend to demonstrate a concern for employees that goes beyond the

workplace. The structure of Turkish business is hierarchical and characterized by social class

distinctions, since the higher echelons generally come from the upper class. Superiors tell

subordinates what they have to do, and do not attempt to reach consensus, but also commonly treat

them as if they are their extended family.



In addition, our respondents work for government-owned enterprises. Many senior managers of

these firms are politicians, and they like to maintain a power distance from their subordinates (Alam

1997). These senior managers often fear that budgetary participation may create opportunities for

their subordinates to challenge their decisions and, in turn, jeopardize their reputation (Jermias and

Setiawan 2008). Subordinates therefore participate in the budgeting process not because they need

to share their private information, but due to their respect for and closeness to their superiors. Often,

information sharing occurs informally rather than through a formal budgeting process. These

conditions lead to the following null hypothesis:

H1: There will be no relationship between information asymmetry and level of budgetary

participation.

Mediating Variables

Chenhall and Brownell (1988) propose that researchers consider the circumstances in which

participation might or might not work. In a similar vein, Hopwood (1976) emphasizes the need to

identify the conditional factors that determine the usefulness of the budgetary participation

program, especially since situational variables might improve or impede its effectiveness. Recent

studies have documented that the direct effects of budgetary participation on job satisfaction/

performance may be influenced by various mediating variables (e.g., Wentzel 2002; Chong and

Johnson 2007). In alignment with these recent studies, we argue that participation–job satisfaction/

performance relationships are not direct and propose that goal commitment and role ambiguity

mediate these relationships.

Goal Commitment

Goal commitment is the determination to pursue a goal and an unwillingness to abandon it or

lower its standard (Hollenbeck and Klein 1987). Klein et al. (2001) argue that goal commitment is a

critical aspect of the relationship between budget and performance because a budget can have no

motivational effect if employees have no commitment to the goals for which they are held

accountable.

Locke (1968) proposes that employees’ behavior is influenced by their conscious ideas and

intentions. Locke and Latham (1990) argue that subordinates will only consider putting effort into a

task if they perceive that it will be worth the effort and that the budget is reasonable. Accordingly, it

is desirable to include subordinates in the budget-setting process because it will enable them to

negotiate and eventually agree to the budget. Allowing subordinates to have some control over the

budget will also lead them to perceive that their superiors trust them. This may in turn increase

subordinates’ ego-involvement in company goals, acceptance of the goals, and commitment to

achieving them (Locke 1968). Locke (1968) contends that the most direct effect of participation is

subordinates’ commitment to the decisions that have been reached. Locke and Latham (1990) argue

that participation will lead subordinates to accept the goals as their personal objectives. In a similar

vein, Hofstede (1991) asserts that participation increases commitment to a goal because

subordinates internalize goals through the process of information sharing which occurs during

the goal-setting process.

Within the context of our study, Turks perceive a team-oriented leadership style to be the most

effective leadership style in Turkey (House et al. 1999). Leaders are expected to be collaborative,

loyal, and consultative. Other in-group relationships are also of critical importance in Turkey.

House et al. (1999) find that Turkey rates high on group and family collectivism (or low in

individualism), medium on power distance, and medium on feminism. With respect to power

distance, Hofstede (1991) reports that Turkey’s power distance index is 66, which is quite similar to



other developing/Islamic countries such as Iran (58), South Korea (60), and East Africa (64). In

contrast, the power distance index for the U.S., Canada, the U.K., and Australia are 40, 39, 35, and

36, respectively. In terms of feminism, Hofstede (1991) indicates that Turkey’s feminism index is

45, which is relatively similar to East Africa (41), Iran (43), South Korea (39), and Arab countries

(53). The feminism index for the U.S., Canada, the U.K., and Australia are 62, 52, 66, and 61,

respectively.

Societies with a low individualism index tend to react favorably to high budgetary participation

because decision making is shared among all members of the society and subordinates are viewed

as equal partners by the superiors. By contrast, societies with a high individualism index are likely

to favor low budgetary participation since the superiors are regarded as important individuals and

they are entitled to make decisions on their own (Lau and Caby 2010).

Hofstede (1991) suggests that societies with a high power distance index tend to react

negatively to participative budgeting since power is not shared between superiors and subordinates.

By contrast, societies with a low power distance index tend to favor participative budgeting because

such societies value equality in making decisions.

With respect to feminism, Hofstede (1991) suggests that societies with a high feminism index

are characterized by the tendency to care for others and superiors who strive for consensus in

making decisions by stressing equality, solidarity, compromise, and negotiation in solving conflicts.

By contrast, societies with a low feminism index tend to expect that superiors should be decisive

and assertive. In addition, superiors tend to encourage competition among subordinates to achieve

better performance.

Based on the cultural index reported by Hofstede (1991), Turkey has a low individualism index

(37) as compared to those of the western countries such as the U.S. (91), Canada (80), the U.K.

(89), and Australia (90). Furthermore, Turkey has a medium power distance index (66), which is

slightly higher than those of the western countries such as the U.S. (40), Canada (39), the U.K. (35),

and Australia (36). Interestingly, as indicated above, Turkey’s feminism index is quite similar to

those of the western countries as well as some of the developing/Islamic countries mentioned

above.3

Following the arguments of Lau et al. (1995), we expect that Turkish managers’ reactions to

budgetary participation will be favorable due to the strong positive impact of low individualism.

The effect of power distance and feminism on budgetary participation will be negligible since

Turkey has medium indices for these two cultural dimensions.

The above arguments indicate that Turkish managers will react positively to high budgetary

participation, and the impact of budgetary participation on job satisfaction and performance is

mediated by goal commitment. Allowing participation in the budgeting process gives superiors an

opportunity to use consultation and diplomacy in order to create the sense that subordinates belong

to the group, which leads to increased commitment and improved outcomes (Kabasakal and

Dastmalchian 2001). Murray (1990) argues that budgetary participation will have a positive impact

on goal commitment and result in better outcomes. If subordinates are committed to the budget,

they tend to be more satisfied with their job and to put more effort into attaining the budget. Hence,

the following hypotheses will be tested:

3 According to Hofstede (1991), countries with a high feminism index are Japan (95), Austria (79), Venezuela (73),and Italy (70), while countries with a low feminism index are Sweden (5), Norway, (8) Netherlands (14), andDenmark (16). Since Turkey’s feminism index is neutral (almost at the middle point), we expect that feminismwill not have a significant impact on Turkish managers’ preference to participation. Moreover, since Turkey’sfeminism index is relatively similar to those of the western countries, we expect that the impact of feminism onthe level of budgetary participation would be similar among these countries.



H2: The relationship between budgetary participation and job satisfaction will be mediated by

goal commitment such that budget participation increases goal commitment, leading to

higher job satisfaction.

H3: The relationship between budgetary participation and performance will be mediated by

goal commitment such that budget participation increases goal commitment, leading to

higher performance.

Role Ambiguity

According to Chenhall and Brownell (1988), no theoretical argument supports the claims that

budgetary participation has a direct effect on job satisfaction or performance. Instead, they contend

that the effect of budgetary participation on performance is mediated by other variables such as role

ambiguity. Role ambiguity refers to a lack of clear understanding about the actions one is required

to perform in order to do one’s job correctly and efficiently (Kahn et al. 1964). Kahn et al. (1964)

propose that role ambiguity may include: (1) what tasks are expected to be performed, (2) how the

tasks are to be performed, (3) how the performance will be evaluated, and (4) the consequences of

completing or not completing the tasks.

Previous studies have hypothesized that role ambiguity is detrimental to individuals as well as

to organizations. Studies documenting the negative consequences of role ambiguity in a number of

settings have consistently reported the negative impact of role ambiguity on job satisfaction/

performance (Wu and Norman 2006; Fischer 2001; Chenhall and Brownell 1988). Rizzo et al.

(1970) contend that high role ambiguity causes lower productivity, greater tension, dissatisfaction,

and psychological withdrawal. Fischer (2001) administers a questionnaire survey to 169 auditors

and finds that role ambiguity is negatively associated with job satisfaction and performance.

Chenhall and Brownell (1988) investigate the intervening effects of role ambiguity on the

budgetary participation–job satisfaction/performance relationship by administering a questionnaire

survey to 36 mid-level managers from a large manufacturing company. They report that role

ambiguity has a significant negative effect on both job satisfaction and performance.

Within the context of our study, Turkey has been identified as a country with high uncertainty

avoidance. According to Hofstede (1991), Turkey’s uncertainty avoidance index is 85, which is

quite similar to other developing/Islamic countries such as Mexico (82), Arab countries (68), and

South Korea (85). In contrast, the uncertainty avoidance indexes for the U.S., Canada, the U.K., and

Australia are 46, 48, 35, and 51, respectively. Hofstede (1991) defines uncertainty avoidance as the

extent to which the members of a culture feel threatened by uncertain or unknown situations and try

to avoid such situations. Societies with a high uncertainty avoidance index, such as Turkey, try to

create security and avoid risk. Hofstede (1991) suggests that societies with a high uncertainty

avoidance index try to reduce uncertainty by creating rules and institutions to guide members’

behaviors and by establishing strong leaders that engage subordinates in decision-making

processes. These characteristics are consistent with the family and in-group orientation that is

predominant in Turkish society (Kabasakal and Bodur 1998). Therefore, we expect that Turkish

managers will participate in the budgeting process in order to decrease role ambiguity and, in turn,

increase job satisfaction and performance.

The above arguments indicate that Turkish managers will react negatively to role ambiguity,

and role ambiguity will mediate the effect of budgetary participation and job satisfaction/

performance. Subordinates’ participation in the budgeting process may clarify their understanding

of the tasks they are expected to perform, how to perform those tasks, how their performance will

be evaluated, and the consequences of meeting or not meeting superiors’ expectations. Chenhall

and Brownell (1988) propose that the indirect impact of budgetary participation on performance is



operated initially from the capacity of budgetary participation to reduce role ambiguity. They

predict and find that decreased role ambiguity improves job satisfaction and performance. In accord

with Chenhall and Brownell (1988), we test the following hypotheses:

H4: The relationship between budgetary participation and job satisfaction will be mediated by

role ambiguity such that budget participation decreases role ambiguity, leading to higher

job satisfaction.

H5: The relationship between budgetary participation and performance will be mediated by

role ambiguity such that budget participation decreases role ambiguity, leading to higher

performance.

III. RESEARCH METHOD

Sample

A survey questionnaire was used to collect data from all the firms owned and managed by the

Istanbul Metropolitan Municipality in the metropolitan Istanbul area.4 These firms operate in

various industry sectors.5 Table 1 shows the distribution of the respondents by industry. Most of the

firms are the biggest in Turkey in their respective sector because they routinely get contracts with

the municipalities that permit them to provide services to the public. However, these companies do

not have monopoly rights and face competition in their sector.

We first contacted the accounting managers of each firm to gain access to the potential

respondents. We then asked the accounting managers about the number of mid-level managers who

are responsible for setting and executing the units’ budgets.6 Based on this initial contact, we

identified 246 respondents and sent them the following materials: a letter explaining the purpose of

the study, the questionnaire, and a self-addressed, stamped envelope. We received 204 responses,

which represented an 82.93 percent response rate.7 Ten responses were excluded from further

analyses because they were incomplete, so our final sample consists of 194 responses.

Table 2 shows the demographic information about our respondents. A majority of our

respondents are between the ages of 26 and 45 years old, and more than 90 percent of them are

male. It is not unusual in Turkey that the managerial positions are dominated by men, since they are

considered to have inherent characteristics that entitle them to governing roles (Topaloglu 1983).

4 The questionnaire was administered in Turkish. Two managers reviewed the questionnaire prior to administeringthem to the respondents in order to assess the degree of understanding that the questionnaires would generate. Asa result, minor modifications were made to the original questionnaire.

5 We contacted all firms (20 total) that are owned and managed by the Istanbul Metropolitan Municipality. Allfirms that were contacted participated in this study.

6 The purpose of contacting the accounting managers is to learn which units in the firms have their own budgets andto obtain information about the managers who are responsible for preparing and implementing the units’ budgets.We asked the following questions to the accounting managers: (1) How many mid-level managers do you have inyour company who participate in setting and implementing the unit’s budget? (2) Please provide the contactinformation of the mid-level managers who are responsible for setting and implementing the unit’s budget. Wethen sent the questionnaires to the mid-level managers recommended by the accounting managers. The mid-levelmanagers work in various departments such as human resources, production, accounting and finance, andmarketing. We purposely targeted mid-level managers who participate in developing and implementing the unit’sbudget.

7 This response rate is slightly higher than those reported by previous studies that use the same approach (Maiga2005; Leach-Lopez et al. 2007; Chong and Johnson 2007). For example, Maiga (2005) reports a response rate of76.37 percent (181 out of 237 questionnaires), while Leach-Lopez et al. (2007) report a response rate of 55.65percent (64 out of 115 questionnaires).



TABLE 1

Distribution of Respondents by Industry

Industry Sector Target ResponsesResponse

Rate

Construction (3 firms) 26 19 73.08%

Energy (2 firms) 30 23 76.67%

Car Park Management (1 firm) 8 7 87.50%

Culture and Tourism (2 firms) 21 17 80.95%

Consultation (1 firm) 8 6 75.00%

Food and Beverage (2 firms) 24 21 87.50%

Garbage Treatment (1 firm) 17 15 88.24%

Health (1 firm) 15 14 93.33%

Landscaping (1 firm) 15 13 86.67%

Research and Development (1 firm) 10 6 60.00%

Sport (1 firm) 6 4 66.67%

Technology (1 firm) 20 18 90.00%

Transportation (3 firms) 46 41 89.13%

Total 246 204 82.93%

TABLE 2

Demographic Information

Variable Description Frequency PercentageCumulativePercentage

Age 20–25 1 0.5 0.5

26–35 70 36.1 36.6

36–45 100 51.5 88.1

46 and up 23 11.9 100

Gender Man 175 90.2 90.2

Woman 19 9.8 100

Education Ph.D. 8 4.1 4.1

Master’s 40 20.6 24.7

Bachelor’s 126 64.9 89.7

Other 20 10.3 100

Length in present company 1–5 year(s) 58 29.9 29.9

6–10 years 57 29.4 59.3

11–15 years 75 38.7 97.9

16 years and up 4 2.1 100

Length at present position 1–2 year(s) 58 29.9 29.9

3–5 years 78 40.2 70.1

6–9 years 45 23.2 93.3

10 years and up 13 6.7 100

Staff under supervision 1–10 96 49.5 49.5

11–20 30 15.5 64.9

21–30 15 7.7 72.7

31 and up 53 27.3 100



Variable Measurement

This study used six variables to test the hypotheses presented in the previous section. This

instrument has been used extensively in previous studies in various settings and demonstrated an

acceptable level of construct validity and reliability (e.g., Kren 1992; Dunk 1993; Wentzel 2002;

Wu and Norman 2006; Leach-Lopez et al. 2007; Brownell 1981). An abbreviated version of the

questionnaire used in this study is presented in Appendix A.

Information asymmetry was measured using the six-item scale developed by Dunk (1993). He

contends that the six items in the instrument are based on the definition of information asymmetry

prescribed by agency theory and detailed in the literature. Participants were asked to distinguish

between the information possessed by superiors and subordinates. The response scales extended

from (1) ‘‘my superior has much better information’’ to (5) ‘‘I have much better information.’’The extent of participative budgeting was measured using an instrument first developed by

Vroom and Mann (1960) that has been modified by subsequent and previous studies (e.g., Brownell

1981; Parker and Kyj 2006; Milani 1975; Jermias and Setiawan 2008). Respondents were asked

about their degree of influence on preparing and executing their budgets. The response scales

ranged from (1) ‘‘strongly disagree’’ to (5) ‘‘strongly agree.’’Goal commitment was measured using three questions originally developed by Locke (1968)

that have been modified by prior research (e.g., Wentzel 2002; Maiga 2005; Chong and Johnson

2007; Murray 1990). Respondents were asked to indicate their level of commitment to the agreed-

upon goals. The response scales ranged from (1) ‘‘not at all’’ to (5) ‘‘very much.’’We used the instrument developed by Rizzo et al. (1970) to measure role ambiguity. It is one of the

most widely used instruments for measuring role ambiguity (Chenhall and Brownell 1988; Wu and

Norman 2006; Fischer 2001). Respondents were asked how clear they were about various aspects of their

role: what was expected from them, how they were going to achieve their goals, how much authority they

had, and their level of responsibility. The response scales ranged from (1) ‘‘always’’ to (5) ‘‘never.’’Job satisfaction or lack thereof is defined as the feelings workers have about their job or job

experiences in relation to previous experiences, current expectations, and available alternatives

(Balzer et al. 1997). Degree of job satisfaction was assessed using an instrument developed by

Weiss et al. (1967), which has also been used by previous research in accounting literature (e.g.,

Leach-Lopez et al. 2007; Lau and Tan 2003; Murray 1990; Brownell 1981; Chenhall 1986;

Chenhall and Brownell 1988). Respondents were asked to indicate their level of satisfaction with

their job on scales ranging from (1) ‘‘very dissatisfied’’ to (5) ‘‘very satisfied.’’Performance was assessed using the self-assessment scale originally developed by Mahoney et al.

(1965) that has been adapted by previous accounting studies (e.g., Kren 1992; Brownell 1981; Brownell

and Hirst 1986; Brownell and McInnes 1986; Parker and Kyj 2006; Jermias and Setiawan 2008). The

performance indicators consist of nine items. Respondents were asked to indicate their level of achievement

on one measure of overall performance and eight measures of specific performance dimensions. The

response scales ranged from (1) ‘‘extremely below average’’ to (5) ‘‘extremely above average.’’

IV. DATA ANALYSIS AND RESULT

Descriptive Statistics and Correlations

Table 3 presents the descriptive statistics of the variables used in this study.8 On average,

subordinates believe that they have better information than their superiors and actively participate in

8 We begin our analyses by assessing the reliability of the constructs used in this study. The results (not reported in this paper)indicate that the reliability of the constructs is within the acceptable range (Nunnally 1967), with a minimum of 0.801 and amaximum of 0.924. We also perform a principal component factor analysis to investigate whether the multi-itemquestionnaire has dimensions that are consistent with the proposed construct in this study. The results (not reported in thispaper) indicate that the questionnaires used in this study can be categorized according to the proposed construct.



the budgeting process (mean scores of 3.356 and 3.714 for Information Asymmetry and BudgetaryParticipation, respectively). Subordinates also indicate that they are highly committed to their goals

(mean ¼ 4.129) and less ambiguous about their role in their organization (mean ¼ 1.819). With

respect to the outcome variables, subordinates indicate that they are satisfied with their job (mean¼3.827) and their performance is above average (mean ¼ 3.804).

Table 4 presents the Pearson correlations for all the variables used in this study. The results

indicate that Participative Budgeting is positive and significantly correlated with Goal Commitment,but negatively and significantly correlated with Role Ambiguity. Goal Commitment is significantly and

positively correlated with both Job Satisfaction and Performance, but negatively and significantly

correlated with Role Ambiguity. Role Ambiguity is negative and significantly correlated with both JobSatisfaction and Performance. The two outcome variables are positive and significantly correlated.

These results provide early support for the hypotheses we developed for this study.

Hypothesis Testing

We use the structural equation modeling approach to examine the hypotheses presented in Section

II. Leach-Lopez et al. (2007) argue that this approach is superior to the multiple regression method

because of its ability to capture the subtleties of a phenomenon wherein the correlation between the

independent variables and the dependent variable is mediated by one or more intervening variables.

Tables 5 and 6 present the coefficients of the structural model, with Job Satisfaction and

Performance as the respective dependent variables. The structural model appeared to be a

reasonable fit for our study (i.e., v2/df ¼ 1.48; CFI ¼ 0.901; IFI ¼ 0.903; RMSEA ¼ 0.05 for

Performance as the dependent variable, and v2/df¼1.53; CFI¼0.917; IFI¼0.918; RMSEA¼0.05

for Job Satisfaction as the dependent variable).9 See Figures 1 and 2.

TABLE 3

Descriptive Statistics

Variable Mean Std. Dev. Minimum Maximum

Information Asymmetry 3.356 0.195 1.000 5.000

Participative Budgeting 3.714 0.970 1.000 5.000

Goal Commitment 4.129 0.672 1.670 5.000

Role Ambiguity 1.819 0.524 1.000 3.670

Job Satisfaction 3.804 0.602 1.210 5.000

Performance 3.827 0.576 1.250 4.880

Variable Definitions:Information Asymmetry ¼ the sum of the six-item scale developed by Dunk (1993);Participative Budgeting ¼ the sum of the four-item scale developed by Vroom and Mann (1960);Goal Commitment ¼ the sum of the three-item scale developed by Latham and Steele (1983);Role Ambiguity ¼ the sum of the six-item scale developed by Rizzo et al. (1970);Job Satisfaction ¼ the sum of the 20-item scale of Minnesota Satisfaction Questionnaires developed by Weiss et al.

(1967); andPerformance ¼ the measurement from the nine-item scale developed by Mahoney et al. (1965).

9 Researchers have provided some guidelines in assessing the potential biases inherent in various measures whenusing the structural equation modeling approach. Wheaton et al. (1977) suggest that the Chi-squared divided bydegree-of-freedom (v2/df ) should be lower than 3.00, while Steiger (1990) contends that the residual mean squareapproximation (RMSEA) should be less than 0.10. Bentler and Bonnet (1980) indicate that the comparative fitindex (CFI) and the Bollen’s fit index (IFI) should be greater than 0.90.



H1 predicts that Information Asymmetry will have no relation to Budgetary Participation.

Panel A of Table 5 and Panel A of Table 6 both indicate that the path coefficient between

Information Asymmetry and Budgetary Participation (Path A) is positive but not significant. This

result is consistent with H1.10

Panel B of Table 5 presents the non-hypothesized path coefficients using Job Satisfaction as

the dependent variable. The results indicate that: (1) Path B (Budgetary Participation ! Job

Satisfaction) is positive and significant, (2) Path C (Budgetary Participation! Goal Commitment)

is positive and significant, Path D (Budgetary Participation ! Role Ambiguity) is negative and

significant, Path E (Goal Commitment! Job Satisfaction) is positive but not significant, and Path F

(Role Ambiguity ! Job Satisfaction) is negative and significant.

Panel B of Table 6 presents the non-hypothesized path coefficients using Performance as the

dependent variable. The results indicate that: (1) Path B (Budgetary Participation! Performance)

is positive but not significant, (2) Path C (Budgetary Participation! Goal Commitment) is positive

and significant, Path D (Budgetary Participation ! Role Ambiguity is negative and significant,

Path E (Goal Commitment! Performance) is positive and significant, and Path F (Role Ambiguity

! Performance) is negative and significant.

TABLE 4

Pearson Correlations among Variables(n ¼ 194, p-values in parentheses)

VariableInformationAsymmetry

ParticipativeBudgeting

GoalCommitment

RoleAmbiguity

JobSatisfaction Performance

Information Asymmetry 1

Participative Budgeting 0.091 1

(0.205)

Goal Commitment �0.037 0.358*** 1

(0.604) (0.000)

Role Ambiguity 0.071 �0.228*** �0.410*** 1

(0.324) (0.001) (0.000)

Job Satisfaction �0.170** 0.229 0.282*** �0.446*** 1

(0.018) (0.001) (0.000) (0.000)

Performance 0.125* 0.135 0.237*** �0.246*** 0.291*** 1

(0.083) (0.000) (0.001) (0.001) (0.000)

*,**, *** Denote the significant level of 0.10, 0.05, and 0.01, respectively, based on two-tailed tests.



10 The statistical power for this test is 83 percent, which is above the minimum acceptable level of 80 percent (Ellis2010). The statistical power indicates the ability of a study to demonstrate an association or causal relationshipbetween two variables, given that an association exists (Cohen 2008). For example, a study with 80 percentstatistical power indicates that the study has an 80 percent chance of rejecting a null hypothesis when it is false.



TABLE 5

Structural Model Path Coefficients with Job Satisfaction as the Dependent Variable

Panel A: H1—Direct Effect

Path

StandardizedPath

Coefficientt-value

(p-value)

Path A: Information Asymmetry ! Budgetary Participation 0.094 1.118

n.s.

Panel B: Non-Hypothesized Path

Path

StandardizedPath

Coefficientt-value

(p-value)

Path B: Budgetary Participation ! Job Satisfaction 0.117 1.091

n.s.

Path C: Budgetary Participation ! Goal Commitment 0.383*** 5.231

(, 0.001)

Path D: Budgetary Participation ! Role Ambiguity �0.228*** �2.417

(0.001)

Path E: Goal Commitment ! Job Satisfaction 0.097* 1.298

(0.079)

Path F: Role Ambiguity ! Job Satisfaction �0.422*** �3.756

(, 0.001)

Panel C: Mediating Effect

Path

StandardizedPath

CoefficientaZ-value

(p-value)b

H2a: Budgetary Participation ! Goal Commitment ! Job Satisfaction 0.037 1.120

n.s.

H3a: Budgetary Participation ! Role Ambiguity ! Job Satisfaction 0.096*** 3.569

(, 0.001)

*, *** Denote significant levels of 0.10 and 0.01, respectively, based on one-sided tests.Fit indices: v2/df ¼ 1.53; CFI ¼ 0.917; IFI ¼ 0.918; RMSEA ¼ 0.05.a The path coefficient for the mediating effect is calculated by multiplying the standardized path coefficient of each path

involved.b The Z-score is calculated using the following formula suggested by Sobel (1982): Z ¼ ðabÞ=

ffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffi

b2s2a þ a2s2

b

p

, where aand b are the standardized path coefficients of Path A and Path B, respectively, and sa and sb are the standard error of aand b, respectively.





TABLE 6

Structural Model Path Coefficients with Performance as the Dependent Variable

Panel A: H1—Direct Effect

Path

StandardizedPath

Coefficientt-value

(p-value)

Path A: Information Asymmetry ! Budgetary Participation 0.097 1.157

n.s.

Panel B: Non-Hypothesized Path

Path

StandardizedPath

Coefficientt-value

(p-value)

Path B: Budgetary Participation ! Performance 0.044 0.478

n.s.

Path C: Budgetary Participation ! Goal Commitment 0.383*** 5.249

(0.000)

Path D: Budgetary Participation ! Role Ambiguity �0.228*** �2.424

(, 0.001)

Path E: Goal Commitment ! Performance 0.178** �1.970

(0.021)

Path F: Role Ambiguity ! Performance �0.189** �2.171

(0.018)

Panel C: Mediating Effect

Path

StandardizedPath

CoefficientaZ-value

(p-value)b

H2b: Budgetary Participation ! Goal Commitment ! Performance 0.068*** 5.305

(, 0.001)

H3b: Budgetary Participation ! Role Ambiguity ! Performance 0.043** 2.389

(, 0.05)

**, *** Denote significant levels of 0.05 and 0.01, respectively, based on one-sided tests.Fit indices: v2/df ¼ 1.48; CFI ¼ 0.901; IFI ¼ 0.903; RMSEA ¼ 0.05 for Performance.a The path coefficient for the mediating effect is calculated by multiplying the standardized path coefficient of each path

involved.b The Z-score is calculated using the following formula suggested by Sobel (1982): Z ¼ ðabÞ=

ffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffi

b2s2a þ a2s2

b

p

, where aand b are the standardized path coefficients of Path A and Path B, respectively, and sa and sb are the standard error of aand b, respectively.





FIGURE 1Structural Path Coefficients of Linking Budgetary Participation to Information Asymmetry,

Goal Commitment, Role Ambiguity, and Job Satisfaction

FIGURE 2Structural Path Coefficients of Linking Budgetary Participation to Information Asymmetry,

Goal Commitment, Role Ambiguity, and Performance



To test H2, we calculate the indirect relationship between Budgetary Participation and JobSatisfaction running through Goal Commitment. The results of this test are presented in Panel C of

Table 5. They indicate that the indirect effect of Budgetary Participation on Job Satisfactionrunning through Goal Commitment (path Budgetary Participation ! Goal Commitment ! JobSatisfaction) is positive but not statistically significant (b ¼ 0.024, Z ¼ 0.754, p ¼ 0.453).11 This

result does not support H2.

To test H3, we calculate the indirect relationship between Budgetary Participation and

Performance running through Goal Commitment. Panel C of Table 6 presents the results of this

procedure. The results indicate that Goal Commitment mediates the relationship between BudgetaryParticipation and Performance (path Budgetary Participation ! Goal Commitment !Performance), which is positive and statistically significant (b ¼ 0.063, Z ¼ 2.093, p , 0.05).

This result supports H3.

To test H4, we calculate the indirect relationship between Budgetary Participation and JobSatisfaction running through Role Ambiguity. Panel C of Table 5 shows the results of this

procedure. The results indicate that Role Ambiguity mediates the relationship between BudgetaryParticipation and Job Satisfaction (path Budgetary Participation ! Role Ambiguity ! JobSatisfaction), which is positive and statistically significant (b¼ 0.086, Z¼ 3.096, p , 0.01). This

result supports H4.

To test H5, we calculate the indirect relationship between Budgetary Participation and

Performance running through Role Ambiguity. Panel C of Table 6 shows the results of this

procedure. The results indicate that Role Ambiguity mediates the relationship between BudgetaryParticipation and Performance (path Budgetary Participation! Role Ambiguity! Performance),

which is positive and statistically significant (b¼ 0.047, Z¼ 2.374, p , 0.05). This result supports

H5.

V. DISCUSSIONS, LIMITATIONS, AND IMPLICATIONS FOR FUTURE RESEARCH

There is a large volume of research on budgetary participation, its antecedents, and its impact

on job satisfaction and performance in management and accounting literature. However, the

empirical findings of this abundant body of research have been inconclusive. This may in part be

due to the incomplete model that the previous studies have employed (Shields and Young 1993).

Following Shields and Young’s (1993) suggestion, we use a comprehensive model to

investigate the impact of budgetary participation on job satisfaction and performance by including

an antecedent variable (Information Asymmetry) and two mediating variables (Goal Commitmentand Role Ambiguity). The study’s key findings are that goal commitment and role ambiguity

mediate the relationship between budgetary participation and job satisfaction, as well as the

relationship between budgetary participation and performance. The significant indirect effect of

budgetary participation on job satisfaction and performance running through role ambiguity is

consistent with the result reported by Chenhall and Brownell (1988). Furthermore, the results

indicate that goal commitment mediates the relationship between budgetary participation and

performance. On the other hand, the mediating effect of goal commitment on the relationship

between budgetary participation and performance is not statistically significant. We also cannot find

any evidence that information asymmetry is an antecedent for budgetary participation in Turkey.

11 The path coefficient for the mediating effect is calculated by multiplying the standardized path coefficient of each

path involved. The Z-score is calculated using the following formula suggested by Sobel (1982): Z ¼ abffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffi

b2sa2þa2sb

2p ,

where a and b are the standardized path coefficients of Path A and Path B, respectively, and sa and sb are the

standard error of a and b, respectively.



These results contradict the prediction of agency theory but are consistent with the values of a

paternalistic society such as Turkey. That is, superiors are like fathers to their subordinates and feel

responsible for their subordinates’ well-being, while subordinates display loyalty and respect to

them in turn. As a result, information tends to be shared informally rather than through a formal

budgeting process (Kabasakal and Bodur 1998).

The results of this study should be interpreted in light of three limitations. First, we used a

questionnaire survey to collect data from our respondents. We acknowledge that responses to the

survey might be biased by participants’ desire to give socially desirable answers. This problem might

be exacerbated by the fact that the respondents’ bosses were contacted before the questionnaires were

sent to them. This procedure, however, was considered necessary because Turkish society has such a

strong family- and in-group-oriented culture. Consequently, Turkish subordinates are expected to ask

permission from their superiors before participating in any surveys conducted by outside parties.

Furthermore, Kren (1992) argues that even if the respondents’ responses appear to be more positive

than others generated by more objective measurements, there is no reason to believe that their bias

would systematically affect the relationship between the independent and dependent variables. It is

also important to note that the use of the questionnaire survey enabled us to explore a rich amount of

data that is not typically available in the public domain. Future research might examine the robustness

of our model by using publicly available data.

Second, this study was conducted among managers of semi-private companies in a developing

country (Turkey). The social and environmental characteristics of our research setting might

therefore be different from other settings. Semi-private companies tend to be significantly

influenced by governments in terms of budget formulation and implementation. This might be the

reason why we did not find a significant relationship between information asymmetry and

budgetary participation, and why budgetary participation has an indirect effect on job satisfaction

running through goal commitment. This setting, however, provides us with useful insights into the

impact of budgetary participation on job satisfaction and performance in a more controlled

environment.

Third, we only use two managers to review the questionnaire prior to administering it to the

respondents. This procedure was performed to assess the degree of understanding of the

questionnaire that was translated from English into Turkish. Given that the questionnaires were

used widely in the previous studies and the limited number of respondents available for our study,

we did not perform a pilot study using more respondents. Future study with large sample size might

consider performing a pilot study using a larger number of respondents to obtain advance warning

about where the main research project could fail, where research protocols may not be followed, or

whether proposed methods or instruments are inappropriate or too complicated.

In spite of the limitations mentioned above, this study will be beneficial for companies in

general and for organizations in developing countries in particular. It will help the latter to realize

that budgetary participation alone does not improve job satisfaction and performance. Rather, it is

the increased commitment and decreased role ambiguity that results from managers’ participation in

the budgetary process that improves job satisfaction and performance.

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APPENDIX A

Questionnaires

A. Respondent’s Information

B. Information Asymmetry (1¼My superior has much better information; 5¼ I have muchbetter information)

1. In comparison with your superior, who is in possession of better information regarding the

activities undertaken in your area of responsibility?

1 2 3 4 5

2. In comparison with your superior, who is more familiar with the input-output relationships

inherent in the internal operations of your area of responsibility?

1 2 3 4 5

3. In comparison with your superior, who is more certain of the performance potential of your

area of responsibility?

1 2 3 4 5

4. In comparison with your superior, who is more familiar technically with the work of your

area of responsibility?

1 2 3 4 5

5. In comparison with your superior, who is better able to assess the potential impact on your

activities of factors external to your area of responsibility?

1 2 3 4 5

6. In comparison with your superior, who has a better understanding of what can be achieved

in your area of responsibility?

1 2 3 4 5

C. Budgetary Participation (1 ¼ Strongly disagree; 5 ¼ Strongly agree)

1. I participate in setting the budgets for my organizational unit.

1 2 3 4 5



2. I have the authority to decide the activities necessary to achieve the budgets set for my

organizational unit.

1 2 3 4 5

3. My opinion is an important factor in executing the budgets for my organizational unit.

1 2 3 4 5

4. My organizational unit has the authority and responsibility given by the top-level

management to execute the budgets.

1 2 3 4 5

D. Goal Commitment (1 ¼ Not at all; 5 ¼ Very much)

1. Commitment to a goal means acceptance of it as your own personal goal and your determination

to attain it. How committed are you to attaining your responsibility area’s budget?

1 2 3 4 5

2. How important is it to you to at least attain your responsibility area’s budget?

1 2 3 4 5

3. To what extent are you striving to attain your responsibility area’s budget?

1 2 3 4 5

E. Role Ambiguity (1 ¼ Always; 5 ¼ Never)

1. I get clear explanations of what has to be done.

1 2 3 4 5

2. I know that I have divided my time properly.

1 2 3 4 5

3. I have clear, planned goals and objectives for my job.

1 2 3 4 5

4. I feel certain about how much authority I have.

1 2 3 4 5

5. I know exactly what is expected of me.

1 2 3 4 5

6. I know what my responsibilities are.

1 2 3 4 5

F. Job Satisfaction (1 ¼ Very dissatisfied; 5 ¼ Very satisfied)

1. Being able to keep busy all the time.

1 2 3 4 5



2. The chance to work alone on the job.

1 2 3 4 5

3. The chance to do different things.

1 2 3 4 5

4. The chance to be somebody in the community.

1 2 3 4 5

5. Being able to do things that do not go against one’s conscience.

1 2 3 4 5

6. The way one’s job provides for steady employment.

1 2 3 4 5

7. The chance to do things for other people.

1 2 3 4 5

8. The chance to tell other people what to do.

1 2 3 4 5

9. The chance to do something that makes use of one’s abilities.

1 2 3 4 5

10. The freedom to use one’s own judgment.

1 2 3 4 5

11. The chance to try one’s own methods of doing the job.

1 2 3 4 5

12. The feeling of accomplishment one gets from the job.

1 2 3 4 5

13. The chances for advancement on the job.

1 2 3 4 5

14. The way company policies are put into practice.

1 2 3 4 5

15. The way one’s co-workers get along with each other.

1 2 3 4 5

16. The praise one gets for doing a good job.

1 2 3 4 5

17. The working conditions.

1 2 3 4 5



18. The pay and the amount of work one does.

1 2 3 4 5

19. The way one’s boss handles his/her employees.

1 2 3 4 5

20. The competence of one’s supervisor in making decisions.

1 2 3 4 5

G. Managerial Performance (1 ¼ Very below average; 5 ¼ Very above average)

1. Planning: Determining goals and courses of action; work scheduling, budgeting, setting up

procedures, programming.

1 2 3 4 5

2. Investigating: Collecting and preparing information for records, reports, and accounts;

measuring output; inventorying, job analysis.

1 2 3 4 5

3. Coordinating: Exchanging information with people in other organizational units in order to

relate and adjust programs; advising other departments, liaison with other managers.

1 2 3 4 5

4. Evaluating: Assessment and appraisal of proposals or of reported or observed performance;

employee appraisals, judging output records, judging financial reports; product inspection.

1 2 3 4 5

5. Supervising: Directing, leading, and developing your subordinates; counseling, training,

and explaining work rules to subordinates; assigning work and handling complaints.

1 2 3 4 5

6. Staffing: Maintaining the work force of your unit; recruiting, interviewing, and selecting

new employees; placing, promoting, and transferring employees.

1 2 3 4 5

7. Negotiating: Purchasing, selling, or contracting for goods or services, contacting suppliers,

dealing with sales representatives; collective bargaining.

1 2 3 4 5

8. Representing: Attending conventions, consultation with other firms, business club meetings,

public speeches, community drives; advancing the general interests of your organization.

1 2 3 4 5

9. Overall performance: Includes all of the areas listed above.

1 2 3 4 5



Documents

Budgetary Participation in Turkey: The Effects of Information Asymmetry, Goal Commitment, and Role Ambiguity on Job Satisfaction and Performance