Abstract
In most organizations, budgets are important mechanisms for planning and control and for motivating subordinate performance. Accordingly, budgeting is one of the most extensively studied topics in managerial accounting. We analyze previous research by first classifying studies according to their characterization of the superior which we label Homo Economicus, Homo Optimas and Homo Vivas. Homo Economicus is a rational economic agent who accepts all budgets because it is in her best interest to do so. Homo Optimas employs the optimal hurdle-rate contract. Finally, Homo Vivas is an experimental participant whose role depends on the decisions she is allowed to make as determined by the experimental design. We explore the economic and behavioral implications of each type of superior for the interpretation of extant research and we provide directions for future research in participative budgeting.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.