Title: The role of trust and budget emphasis in managing degree of autonomy and performance

Authors: Sakthi Mahenthiran, Ben Shaw-Ching Liu, Zalina Hashim

Addresses: College of Business Administration, Butler University, 4600 Sunset Avenue, Indianapolis, IN 46208, USA. ' Lender School of Business, Quinnipiac University, 275 Mount Carmel Avenue, Hamden, Connecticut 06518, USA. ' College of Business Management and Accounting, University Tenaga Nasional, Sultan Haji Ahamad Shah Campus, Malaysia

Abstract: This study examines the relationship between supervisor|s budgetary style, supervisor|s trust in subordinate and their effects on the subunit|s performance of two newly privatised Malaysian utility companies. A framework linking uncertainty and organisational growth to subunit|s performance is tested using structural equation modelling. In addition, the study examines the mediating role of trust in the relation between supervisor|s budgetary style as a control system and subordinate|s autonomy, which in turn could affect subunit|s performance. Results confirm the hypothesised relationships. These findings contribute to understanding the role that trust plays in institutionalising a participative budgeting process during organisational change.

Keywords: trust; control systems; budgetary style; autonomy; organisational change; performance; supervision; privatised utilities; Malaysia; uncertainty; organisational growth; structural equation modelling; budget emphasis; subordinates; budgeting.

DOI: 10.1504/IJBSR.2010.029948

International Journal of Business and Systems Research, 2010 Vol.4 No.1, pp.62 - 81

Available online: 03 Dec 2009 *

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