Budget participation and job performance of South Korean managers mediated by job satisfaction and job relevant information

Abstract

PurposeThe purpose of this paper is to extend the participative budgeting literature, and specifically the budgetary participation literature that has examined the casual mechanisms linking participation to satisfaction/performance and the literature that has examined culture as an explanatory factor in the budgetary participation/performance relationship.Design/methodology/approachThis paper employs the path model to examine and compare the budget participation–performance relationship for South Korean managers working for either US controlled or Asian controlled companies in South Korea. The path model allows the examination of the direct effects of budget participation on performance and the indirect effects between budget participation and performance that run through job satisfaction and job relevant information.FindingsThe primary findings of this study are that while there are strong associations between budget participation and performance for both samples of managers, the causal mechanisms connecting budget participation to performance are different between these two groups. The information–communication connection between budget participation and performance is stronger among the South Korean managers working for US controlled companies.Research limitations/implicationsOur study suffers from three common limitations found in all survey research: lack of temporal precedence between the independent and dependent variables; any limitations imbedded in the scales used to measure our variables; and generalizability of our samples.Originality/valueThe findings presented in this paper should have important implications for US companies employing US management techniques in their foreign operations.