Title

Budget participation, goal interdependence and controversy : a study of a Chinese public utility

Document Type

Journal article

Source Publication

Management Accounting Research

Publication Date

3-1-2001

Volume

12

Issue

1

First Page

101

Last Page

118

Keywords

Budgeting, China, Conflict, Controversy, Goal interdependence, Participation

Abstract

The extensive literature on participative budgeting has paid little attention to the interaction among managers as they discuss and resolve budget-related issues. This study employs goal interdependence theory to explore the impact of team dynamics on budgeting. How managers believe their goals are related affects the dynamics and outcomes of participation. In a large utility in Hong Kong, 64 managers were interviewed on specific budget participation incidents. Results of structural equation analyses found support for the study's three main hypotheses. Budget team members who had cooperative goals were found to engage in more open-minded discussion in conflict situations. This resulted in improved group productivity and strengthened relationships which, in turn, led to higher-quality budgets. Results were interpreted as suggesting that the benefits of budget participation depends upon establishing strongly cooperative goals among team members and developing the skills to discuss opposing views open-mindedly. The antecedents of goal interdependence are also explored.

DOI

10.1006/mare.2000.0146

Print ISSN

10445005

E-ISSN

10961224

Publisher Statement

Copyright © 2001 Academic Press

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Full-text Version

Publisher’s Version

Recommended Citation

Poon, M., Pike, R., & Tjosvold, D. (2001). Budget participation, goal interdependence and controversy: A study of a Chinese public utility. Management Accounting Research, 12(1), 101-118. doi: 10.1006/mare.2000.0146