Abstract
Cognition and emotion exert a powerful influence on human behavior. Based on cognitive psychology and organizational behavior theory, this paper examines the role of cognition and emotion in participative budgeting and corporate performance using a questionnaire survey. The questionnaires were sent to 345 listed companies in China. The results support the hypothesis that human cognition and emotion have a positive moderating effect on the relationship between participative budgeting and corporate performance. Cognition and emotion can promote the effect of participative budgeting on corporate performance. Furthermore, according to the theory of artificial intelligence (AI), this paper designs an AI-based cognition and emotion identification system. This system can help managers identify the budget participants’ cognitive and emotional states and undertake the interventions necessary to improving corporate performance.
Highlights
In the postepidemic era, enterprise risk management has become key to achieving sustainable development (Yu et al, 2020)
The results showed that participative budgeting (PB), cognitive ability (CA), emotional intelligence (EI), self-efficacy (SE) and corporate performance (CP) were positively correlated
Hypothesis 1, Hypothesis 2a, Hypothesis 2b and Hypothesis 2c in this study are all valid, which proves that cognitive ability, emotional intelligence and self-efficacy have a positive moderating effect on the relationship between participative budgeting and corporate performance
Summary
Enterprise risk management has become key to achieving sustainable development (Yu et al, 2020). Budgeting is an important tool for enterprise risk control. Most studies on the relationship between participative budgeting and corporate performance focus on economics and management, and many scholars believe that participative budgeting can promote corporate performance (Peter and Morris, 1986). Some scholars put forward a different view, that participative budgeting is negatively correlated or not significantly correlated with corporate performance (Cherrington and Cherrington, 1973). This indicates that there may be a complex interactive mechanism between participative budgeting and corporate performance
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