Effects of psychological capital and managerial attitudes on the relationship between budgetary participation and performance

Degenhart, Larissa; Zonatto, Vinícius Costa da Silva; Lavarda, Carlos Eduardo Facin

doi:10.1590/1808-057x202113790

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Revista Contabilidade & Finanças

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Original Article • Rev. contab. finanç. 33 (89) • May-Aug 2022 • https://doi.org/10.1590/1808-057x202113790 copy

Effects of psychological capital and managerial attitudes on the relationship between budgetary participation and performance^* * The authors are grateful to the National Council for Scientific and Technological Development (CNPq) and to the Research Support Foundation of the State of Rio Grande do Sul (FAPERGS) for their financial support to carry out this research. This study was also conducted with the support of the Coordination for the Improvement of Higher Education Personnel - Brasil (CAPES) - Funding Code 001.

Authorship SCIMAGO INSTITUTIONS RANKINGS

ABSTRACT

This study analyzes the effects of psychological capital and managerial attitudes on the relationship between budgetary participation and management performance in budgeting activities. The study addresses a gap that exists in the budgeting research, tackling the effects of individuals’ mental states and behaviors on the relationship between budgetary participation and management performance in an integrated way. The interactive effects of cognitive and personal, behavioral, and environmental factors enable us to understand the factors present within the budgetary context that influence the relationship between budgetary participation and management performance, which provides an explanation for the conflicting results found in the literature, denoting in which conditions the effects of participation on performance can be obtained. The research innovates by evaluating, based on an interactionist approach, predictive factors for management performance within the budgetary context, contemplating the analysis of cognitive and personal (psychological capital), behavioral (managerial attitudes), and environmental (budgetary participation) factors, providing an explanation for the effects of budgetary participation on management performance in budgeting activities. A survey was conducted with 245 controller professionals from industries in the South Region of Brazil, chosen using the LinkedIn social network, and the data were analyzed via structural equation modeling (SEM). This revealed the positive joint indirect effects of psychological capital and of managerial attitudes on the relationship between budgetary participation and performance. The results converge with the social cognitive theory (SCT) approach, as it can be inferred that cognitive and personal aspects influence human decisions and the level of effort employed by managers in activities carried out within the budgetary context. The results offer support for organizations to direct resources toward organizational practices that seek to improve managers’ positive mental states, which influence behavioral factors and their job performance.

Keywords:
budgetary participation; psychological capital; managerial attitudes; management performance; social cognitive theory

Hypotheses	Expected relationship	Theoretical support
H₁: there is a positive relationship between budgetary participation and management performance.	+	Bandura (1977Bandura, A. (1977). Social learning theory. Prentice-Hall.), Etemadi et al. (2009Etemadi, H., Dilami, Z. D., Bazaz, M. S., & Parameswaran, R. (2009). Culture, management accounting and managerial performance: Focus Iran. Advances in Accounting, Incorporating Advances in International Accounting, 25(2), 216-225.), Hashim et al. (2014Hashim, A. W., Hanafi, I., Fitrianto, A., & Darwish, H. (2014). Roles of budgetary participation on leader’s performance. Asian Social Science, 10(12), 35-40.), Jermias and Yigit (2013Jermias, J., & Yigit, F. (2013). Budgetary participation in Turkey: The effects of information asymmetry, goal commitment, and role ambiguity on job satisfaction and performance.Journal of International Accounting Research,12(1), 29-54.), Lunardi et al. (2020Lunardi, M. A., Zonatto, V. C. da. S., & Nascimento, J. C. (2020). Efeitos cognitivos mediadores do compartilhamento de informação na relação entre participação orçamentária e desempenho gerencial. Revista Contabilidade & Finanças, 31(82), 14-32.), Macinati et al. (2016Macinati, M. S., Bozzi, S., & Rizzo, M. G. (2016). Budgetary participation and performance: The mediating effects of medical managers’ job engagement and self-efficacy. Health Policy, 120(9), 1017-1028.), Santos et al. (2021Santos, V. dos, Beuren, I. M., & Marques, L. (2021). Desenho e uso justos do processo orçamentário e desempenho gerencial. Revista Contabilidade & Finanças, 32(85), 29-45.), Venkatesh and Blaskovich (2012Venkatesh, R., & Blaskovich, J. (2012). The mediating effect of psychological capital on the budget participation-job performance relationship. Journal of Management Accounting Research, 24(1), 159-175.), Zonatto et al. (2019Zonatto, V. C. da. S., Weber, A., & Nascimento, J. C. (2019). Efeitos da participação orçamentária na assimetria informacional, estresse ocupacional e desempenho gerencial. Revista de Administração Contemporânea, 23(1), 67-91.).
H₂: there is a positive relationship between budgetary participation and psychological capital.	+	Bandura (1977Bandura, A. (1977). Social learning theory. Prentice-Hall.), Macinati et al. (2016Macinati, M. S., Bozzi, S., & Rizzo, M. G. (2016). Budgetary participation and performance: The mediating effects of medical managers’ job engagement and self-efficacy. Health Policy, 120(9), 1017-1028.), Nascimento (2017Nascimento, J. C. (2017). Efeitos do capital psicológico de controllers em atitudes, comportamentos e no desempenho gerencial sob o contexto orçamentário [Master’s Dissertation]. Universidade Regional de Blumenau.), Ni et al. (2009Ni, F.-Y., Su, C. C., Chung, S.-H., & Cheng, K.-C. (2009). Budgetary participation’s effect on managerial outcomes: Mediating roles of self-efficacy and attitudes toward budgetary decision makers. NTU Management, 19(2), 321-347.), Schlup (2018Schlup, D. (2018). Efeitos mediadores do capital psicológico e da síndrome de burnout na relação entre participação orçamentária e desempenho gerencial [Master’s Dissertation]. Universidade Regional de Blumenau.), Venkatesh and Blaskovich (2012Venkatesh, R., & Blaskovich, J. (2012). The mediating effect of psychological capital on the budget participation-job performance relationship. Journal of Management Accounting Research, 24(1), 159-175.), Yuliansyah and Khan (2017Yuliansyah, Y., & Khan, A. A. (2017). A revisit of the participative budgeting and employees’ self-efficacy interrelationship - Empirical evidence from Indonesia’s public sector.International Review of Public Administration, 22(3), 213-230.).
H₃: there is a positive relationship between psychological capital and management performance.	+	Bandura (1977Bandura, A. (1977). Social learning theory. Prentice-Hall.), Nascimento (2017Nascimento, J. C. (2017). Efeitos do capital psicológico de controllers em atitudes, comportamentos e no desempenho gerencial sob o contexto orçamentário [Master’s Dissertation]. Universidade Regional de Blumenau.), Saithong-In and Ussahawanitchakit (2016Saithong-In, S., & Ussahawanitchakit, P. (2016). Psychological capital and job performance: An empirical research of certified public accountants (CPAs) in Thailand.The Business & Management Review, 7(5), 499-506.), Schlup (2018Schlup, D. (2018). Efeitos mediadores do capital psicológico e da síndrome de burnout na relação entre participação orçamentária e desempenho gerencial [Master’s Dissertation]. Universidade Regional de Blumenau.), Venkatesh and Blaskovich (2012Venkatesh, R., & Blaskovich, J. (2012). The mediating effect of psychological capital on the budget participation-job performance relationship. Journal of Management Accounting Research, 24(1), 159-175.).
H_4a: there is a positive relationship between budgetary participation and managerial attitudes in relation to the budget.	+	Bandura (1977Bandura, A. (1977). Social learning theory. Prentice-Hall.), Birnberg et al. (2007Birnberg, J. G., Luft, J., & Shields, M. D. (2007). Psychology theory in management accounting research. Handbook of Management Accounting Research, 1, 113-135.), Lu (2011Lu, C.-T. (2011). Relationships among budgeting control system, budgetary perceptions, and performance. African Journal of Business Management, 5(15), 6261-6270.), Merchant (1981Merchant, K. A. (1981). The design of the corporate budgeting system: Influences on managerial behavior and performance. The Accounting Review, 56(4), 813-829.), Ni et al. (2009Ni, F.-Y., Su, C. C., Chung, S.-H., & Cheng, K.-C. (2009). Budgetary participation’s effect on managerial outcomes: Mediating roles of self-efficacy and attitudes toward budgetary decision makers. NTU Management, 19(2), 321-347.), Sandalgaard et al. (2011Sandalgaard, N., Bukh, P. N., & Poulsen, C. S. (2011). The interaction between motivational disposition and participative budgeting: Evidence from a bank. Journal of Human Resource Costing & Accounting, 15(1), 7-23.).
H_4b: there is a positive relationship between budgetary participation and commitment to budgetary goals.	+	Bandura (1977Bandura, A. (1977). Social learning theory. Prentice-Hall.), Chong and Johnson (2007Chong, V. K., & Johnson, D. (2007). Testing a model of the antecedents and consequences of budgetary participation on job performance. Accounting Business Research, 37(1), 3-19.), Chong and Tak-Wing (2003), Hashim et al. (2014Hashim, A. W., Hanafi, I., Fitrianto, A., & Darwish, H. (2014). Roles of budgetary participation on leader’s performance. Asian Social Science, 10(12), 35-40.), Jermias and Yigit (2013Jermias, J., & Yigit, F. (2013). Budgetary participation in Turkey: The effects of information asymmetry, goal commitment, and role ambiguity on job satisfaction and performance.Journal of International Accounting Research,12(1), 29-54.), Macinati and Rizzo (2014Macinati, M. S., & Rizzo, M. G. (2014). Budget goal commitment, clinical managers’ use of budget information and performance. Health Policy, 117(2), 228-238.), Sandalgaard et al. (2011Sandalgaard, N., Bukh, P. N., & Poulsen, C. S. (2011). The interaction between motivational disposition and participative budgeting: Evidence from a bank. Journal of Human Resource Costing & Accounting, 15(1), 7-23.).
H_5a: there is a positive relationship between managerial attitudes in relation to the budget and management performance.	+	Bandura (1977Bandura, A. (1977). Social learning theory. Prentice-Hall.), Lu (2011Lu, C.-T. (2011). Relationships among budgeting control system, budgetary perceptions, and performance. African Journal of Business Management, 5(15), 6261-6270.), Mia (1988Mia, L. (1988). Managerial attitude, motivation and the effectiveness of budget participation. Accounting, Organizations and Society, 13(5), 465-475.), Nascimento (2017Nascimento, J. C. (2017). Efeitos do capital psicológico de controllers em atitudes, comportamentos e no desempenho gerencial sob o contexto orçamentário [Master’s Dissertation]. Universidade Regional de Blumenau.).
H_5b: there is a positive relationship between commitment to budgetary goals and management performance.	+	Bandura (1977Bandura, A. (1977). Social learning theory. Prentice-Hall.), Chong and Johnson (2007Chong, V. K., & Johnson, D. (2007). Testing a model of the antecedents and consequences of budgetary participation on job performance. Accounting Business Research, 37(1), 3-19.), Chong and Tak-Wing (2003), Hashim et al. (2014Hashim, A. W., Hanafi, I., Fitrianto, A., & Darwish, H. (2014). Roles of budgetary participation on leader’s performance. Asian Social Science, 10(12), 35-40.), Jermias and Yigit (2013Jermias, J., & Yigit, F. (2013). Budgetary participation in Turkey: The effects of information asymmetry, goal commitment, and role ambiguity on job satisfaction and performance.Journal of International Accounting Research,12(1), 29-54.), Wentzel (2002Wentzel, K. (2002). The influence of fairness perceptions and goal commitment on managers’ performance in a budget setting. Behavioral Research in Accounting, 14(1), 247-271.).
H₆: there is an indirect joint effect of psychological capital and managerial attitudes on the relationship between budgetary participation and management performance.	+	Bandura (1977Bandura, A. (1977). Social learning theory. Prentice-Hall.), Dani et al. (2017Dani, A. C., Zonatto, V. C. S., & Diehl, C. A. (2017). Participação orçamentária e desempenho gerencial: meta-análise das relações encontradas em pesquisas na área comportamental da contabilidade. Advances in Scientific and Applied Accounting, 10(1), 54-72.), Derfuss (2016Derfuss, K. (2016). Reconsidering the participative budgeting-performance relation: A meta-analysis regarding the impact of level of analysis, sample selection, measurement, and industry influences. The British Accounting Review, 48(1), 17-37.), Macinati et al. (2016Macinati, M. S., Bozzi, S., & Rizzo, M. G. (2016). Budgetary participation and performance: The mediating effects of medical managers’ job engagement and self-efficacy. Health Policy, 120(9), 1017-1028.), Nascimento (2017Nascimento, J. C. (2017). Efeitos do capital psicológico de controllers em atitudes, comportamentos e no desempenho gerencial sob o contexto orçamentário [Master’s Dissertation]. Universidade Regional de Blumenau.), Schlup (2018Schlup, D. (2018). Efeitos mediadores do capital psicológico e da síndrome de burnout na relação entre participação orçamentária e desempenho gerencial [Master’s Dissertation]. Universidade Regional de Blumenau.), Venkatesh and Blaskovich (2012Venkatesh, R., & Blaskovich, J. (2012). The mediating effect of psychological capital on the budget participation-job performance relationship. Journal of Management Accounting Research, 24(1), 159-175.).

Variables	Operational definitions	Scale	Authors
BP	Refers to managers’ involvement in defining the budgetary goals and objectives and their influence over the establishment of budgets for their units (Milani, 1975Milani, K. W. (1975). The relationship of participation in budget-setting to industrial supervisor performance and attitudes: A field study. The Accounting Review, 50(2), 274-284.; Shields & Shields, 1998Shields, J., & Shields, M. (1998). Antecedents of participative budgeting. Accounting, Organizations and Society, 23(1), 49-76.).	Six indicators Likert 7 points^**	Milani (1975)
PC	Positive psychological state of development of the individual characterized by beliefs of SE, OP, HO, and RE (Luthans et al., 2007Luthans, F., Youssef, C. M., & Avolio, B. J. (2007). Psychological capital: Developing the human competitive edge. Oxford University Press.). It is therefore a second-order construct, evaluated based on these positive psychological capacities.	Six indicators Likert 6 points^**	Luthans et al. (2007Luthans, F., Youssef, C. M., & Avolio, B. J. (2007). Psychological capital: Developing the human competitive edge. Oxford University Press.)
MA	Refers to the feeling of utility of the budget for carrying out their job attributions and improving production methods (Merchant, 1981Merchant, K. A. (1981). The design of the corporate budgeting system: Influences on managerial behavior and performance. The Accounting Review, 56(4), 813-829.).	Five indicators Likert 5 points^**	Merchant (1981)
CBG	Refers to managers’ involvement in the process of defining budgetary goals and the effort employed to achieve them (Chong & Johnson, 2007Chong, V. K., & Johnson, D. (2007). Testing a model of the antecedents and consequences of budgetary participation on job performance. Accounting Business Research, 37(1), 3-19.).	Five indicators Likert 7 points^**	Latham and Steele (1983Latham, G. P., & Steele, T. P. (1983). The motivational effects of participation versus goal setting on performance. Academy of Management Journal, 26(3), 406-417.)
MP	Evaluates the degree to which the budget managers obtain success in carrying out the budgeting activities (Mahoney et al., 1965Mahoney, T. A., Jerdee, T. H., & Carroll, S. J. (1965). The job(s) of management. Industrial Relations, 4(2), 97-110.; Parker & Kyj, 2006Parker, R. J., & Kyj, L. (2006). Vertical information sharing in the budgeting process. Accounting, Organizations and Society, 31(1), 27-45.).	Nine indicators Likert 7 points^*	Mahoney et al. (1965Mahoney, T. A., Jerdee, T. H., & Carroll, S. J. (1965). The job(s) of management. Industrial Relations, 4(2), 97-110.)

Constructs	CA	CR	AVE
Minimum values expected =>	> 0.70	> 0.50	> 0.50
BP	0.913	0.92	0.66
PC	-	-	-
SE	0.908	0.92	0.65
HO	0.864	0.87	0.53
OP	0.897	0.90	0.62
RE	0.827	0.84	0.51
MA	0.849	0.86	0.55
CBG	0.960	0.96	0.83
MP	0.905	0.91	0.53

Discriminant validity according to the Bagozzi and Philips (1982Bagozzi, R. P., & Phillips, L. W. (1982). Representing and testing organizational theories: A holistic construal. Administrative Science Quarterly, 27, 459-489.) criterion
Measurement constructs		Constrained (= 1)	Not constrained	Difference of the chi-squared	Sig.
Construct A	Construct B	Chi-squared	Chi-squared	Difference of the chi-squared	Sig.
BP	PC	1,549.127	1,516.617	32.51	0.0000
BP	MA	176.954	88.584	88.37	0.0000
BP	CBG	79.372	69.442	9.93	0.0016
BP	MP	389.467	361.521	27.946	0.0000
PC	MA	1,649.963	1,514.794	135.169	0.0000
PC	CBG	1,544.002	1,497.788	46.214	0.0000
PC	MP	1,948.808	1,882.49	66.318	0.0000
MA	CBG	203.664	108.521	95.143	0.0000
MA	MP	489.22	374.047	115.173	0.0000
CBG	MP	408.124	377.526	30.598	0.0000

Estimates of the final model
Structural paths			Estimates	Standard error	t values	ρ	Standardized coefficients	R²	Hypothesis	Result
MP	←	BP	-	-	-	-	-	-	H1	Not supported
PC	←	BP	0.317	0.046	6.920	^***	0.590	0.348	H2	Supported
MP	←	PC	0.349	0.104	3.367	^***	0.266	0.361	H3	Supported
MA	←	BP	0.163	0.030	5.460	^***	0.427	0.182	H4a	Supported
CBG	←	BP	0.525	0.062	8.536	^***	0.561	0.315	H4b	Supported
MP	←	MA	0.513	0.139	3.683	^***	0.279	0.361	H5a	Supported
MP	←	CBG	0.219	0.054	4.061	^***	0.291	0.361	H5b	Supported
BP/MP	←	PC/MA	-	-	-	-	-	-	H6	Supported

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