Title: Participative budgeting: a review of empirical research and practical implications

Authors: Philipp Prummer, Patricia Frey, Peter Schentler, H. James Williams, Jaideep Motwani

Addresses: Strascheg Institute for Innovation and Entrepreneurship, EBS Universitat fur Wirtschaft und Recht i. Gr., Wiesbaden 65189, Germany. ' Strascheg Institute for Innovation and Entrepreneurship, EBS Universitat fur Wirtschaft und Recht i. Gr., Wiesbaden 65189, Germany. ' Strascheg Institute for Innovation and Entrepreneurship, EBS Universitat fur Wirtschaft und Recht i. Gr., Wiesbaden 65189, Germany. ' Seidman College of Business, Grand Valley State University, 401 Fulton Street West, Grand Rapids, MI 49504, USA. ' Seidman College of Business, Grand Valley State University, 401 Fulton Street West, Grand Rapids, MI 49504, USA

Abstract: The process by which managers have influence on the setting of their budget goals, participative budgeting (PB), has been researched extensively since the 1960s. This paper provides a comprehensive and critical review of the empirical PB literature, which still lacks such a detailed and broad-scope examination, derives practical recommendations and implications, and gives a comparison of the findings of PB literature and the principles of recent budgeting concepts. The empirical PB studies identified (1) the antecedents or determinants of PB, (2) the impact PB has on mental states and performance and (3) PB|s effects on the existence of budgetary slack. Summing up the findings, it has to be noted that while the informational role of PB in enhancing subordinate performance is generally established, the results relating to reductions in information asymmetry as well as PB|s motivational effects remain ambiguous.

Keywords: budgets; participative budgeting; behavioural accounting research; mental states; subordinate performance; budgetary slack; better budgeting; beyond budgeting; literature review; information asymmetry; motivational effects; motivation.

DOI: 10.1504/IJBIR.2011.042450

International Journal of Business Innovation and Research, 2011 Vol.5 No.5, pp.559 - 598

Received: 08 May 2021
Accepted: 12 May 2021

Published online: 11 Sep 2011 *

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