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The Effect of Budgetary Participation on Budgetary Slack: Mediating Roles of Organizational Commitment and Perceptions of Budgeting Procedural Justice
Feng - Yu Ni,
National Sun Yat - Sen University
Shao - Hsi Chung, Mei - Ho Institute of Technology
Kuo - Chih Cheng, Kun - Shan University Of Technology
Chin - Chun Su, Kao - Yuan University
ABSTRACT. Based on the behavioral aspect of budgeting systems and the motivation theory of participation, this study examines organizational commitment and perceptions of budgeting procedural justice as mediating variables to explore the effect of budgetary participation on budgetary slack. We construct nested structural equation models as the analytical method and use LISREL as the analytical tool. Based upon a mail questionnaire survey of 133 departmental managers in Taiwan’s public manufacturing companies, the results indicate that budgetary participation is not directly associated with budgetary slack, but that it is indirectly and negatively related through organizational commitment. Meanwhile, perceptions of budgeting procedural justice intervene in the relationship between budgetary participation and organizational commitment. However, perceptions of budgeting procedural justice are not directly related to budgetary slack.
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