Budgeting process and the effect of budget participation on managerial performance, job satisfaction and budget slack
This thesis investigates firstly the relationships between budget participation on the one
hand and managerial performance, job satisfaction and budget slack on the other. These
relationships were investigated at individual level, directly or by using moderating variables
like organisational commitment, job relevant information and locus of control. Secondly,
the effects of external factors on budgeting process in public industrial sector in Libya.
Specifically, it seeks to examine the budgeting process at the organisation level, and of the
effects of external variables on it. It aims to give full information about the perceptions,
beliefs and views of managers on budgeting process practices in the Libyan organisations.
To examine the above relationships specific hypotheses were stated and triangulation
method was employed in this study to collect data. 275 questionnaires were distributed to
seven Electrical and Engineering companies located in Libya. Some interviews were
conducted with managers in theses companies at three levels. 182 questionnaires were
returned with percentage rate of 66%.
The results revealed several interactive and direct relationships between independent and
dependent variables. Regarding direct relationships, budget participation was found to have
a positive correlation with performance and job satisfaction. On the other hand, it was
found that there was a negative relation with budget slack. Regarding the effect of the
interaction between participation and organisational commitment on performance, job
satisfaction and budget slack the results revealed that there were was shown to be
significant interactions. However, the effect of the interaction between participation and job
relevant information on dependent variables was shown to be insignificant. Also the results
revealed that the effect of the interaction between participation and locus of control on
managerial performance and job satisfaction was significant.
The results enabled the proposition of several tentative theoretical and practical
implications for management accounting systems design, as well as several suggestions for
future research. Overall, the results seem to contribute significantly to the understanding of
organisational effectiveness through improved insight into factors underlying effective
management accounting systems, particularly the use of the participation approach in