Budgetary Participation in a Non-Western Country

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Budgetary Participation in a Non-Western Country
Anissa Dakhli, Paris X University, Nanterre
The relationship between budgetary participation and job satisfaction has been examined in several accounting studies with
conflicting results. The conflicting evidence may reflect the influence of contingency variables. The purpose of the present study is
to examine the relationship between budgetary participation and
job satisfaction, moderated by the personality variable, locus of
control. In this study, Tunisian managers were selected, because
Tunisia provides an interesting cultural contrast to the US, the
birthplace of such budget practice, on two dimensions identified by
Hofstede (1980) that are considered relevant to participative
budgeting issues.
The results of this study suggest that budgetary participation
negatively affects job satisfaction. It supports, also, the moderator
effect of the personality variable, locus of control. Internals appear
more job-satisfied under conditions of high participation. On the
contrary, Externals are more job-satisfied under conditions of low
This study highlights, notably, that budgetary participation
would have different effects in different cultures.
The effectiveness of the management planning and control
systems used in developing countries remains an important issue
for many reasons. As developing countries become more industrialized, progressive local firms may import systems and techniques
from the more industrialized nations; indeed, such importation may
be encouraged by educational institutions and consultants. Unfortunately, the progressive local firm may be importing systems from
Volume 12 (2010-11) Budgetary Participation
the industrialized world without considering the potential impact of
cultural differences on the success of implementing such systems.
Support for the concern about the issues outlined above is
found in current definitions of culture as a “shared reality” or
shared “cognitive maps” (Adler, 1983; Hofstede, 1980, 1984).
Through the socialization process, members of a group learn the
premises that make up this “subjective culture.” These premises
provide the essential basis for interpersonal relations leading to the
effects described by Adler (1983): culture influences organizations
through societal structures, such as laws and political systems, and
also through the values, attitudes, behaviour, goals, and preferences of participants. Thus, the view of “reality” held by members
of a group is expected to affect their perception of the budgetary
process and the values that they place on participating in that
process (Hofstede, 1983).
In particular, the moderated relationship between budgetary
participation and job satisfaction has attracted the interest of many
researchers. Brownell (1982) examined the effects of participative
budgeting and locus of control on performance and job satisfaction
in a field setting. He found that a manager’s personality would
mediate the effects that the budget participation process would
have on job performance and job satisfaction. Using the work of
Hofstede (1980, 1983) for hypotheses development, Frucot &
Shearon (1991) theorized that culture might be an important
variable in the budget participation-performance and budget
participation-job satisfaction relationships. They tested the interrelationship of budget participation and locus of control (a
personality variable) and their impact on job performance and job
satisfaction of Mexican managers. They assumed that an organizational system such as budget participation would have different
effects in different cultures. They suggested that foreign-owned
firms “may wish to exercise caution when applying participative
budgeting techniques in Mexico” (p. 96).
While there is a large body of prior research on the relationship between budget participation and job satisfaction, none
has specifically focused attention on participative budgeting within
any Arabic country, such as Tunisia. Nonetheless, it represents a
fruitful area for managerial research. Tunisia is located in North
Africa’s peak, where Europe, the Arab world and sub-Saharan
Africa interact. This geographical position led to multiple invasions of Tunisia from the North and the East. Tunisia has also
been influenced by many cultures.
Economically speaking, this country has been very successful in achieving economic development (Zghal, 2008). The
Tunisian society is at the same time protective of its national
culture, open to modernity and receptive to adaptation. It has
recently become strategically important to Western business.
In their quest for economic progress, developing nations
face major problems in improving the quality of work life, productivity and the standard of living. Studying work environment and
other motivational factors is obviously imperative for the people of
these developing countries, but it is equally critical for researchers
in the general field, as developing nations assume a growing role in
the overall world economy. As in many other rapidly developing
nations, the Tunisian government has instituted extensive economic development programs designed to promote material growth and
social justice.
With the recent phenomenon of internationalization of
competition, Tunisian companies had to improve their economic
performance, by adopting sophisticated managerial tools, and their
social performance, by taking more interest in their human resources. Thus, budgetary participation may serve to enhance
Volume 12 (2010-11) Budgetary Participation
managerial job attitudes, such as job satisfaction, and consequently
the performance of the manager who was involved in the budgetary system. Because of the strong cultural gap between Tunisia
and Western countries, where modern managerial practices were
born, these practices are likely to be inappropriate for Tunisian
companies (Lassouad, 2008). In fact, importing management
systems developed in industrial countries may create coherence
problems. The study of the relationship between culture and
management in Tunisia has a double interest. The first is the
behaviors of companies in an environment motivated by a great
willing to development and of course to change but which search,
in the same time, to protect its cultural values. The second is in the
importance of changes realized in all fields, which raise many
questions about the origins and movements of Tunisian national
culture, particularly in management and organization fields.
The remainder of this paper is organized as follows:
Section 1 examines the theory for the hypotheses development.
Section 2 includes a brief description of Hofstede’s (1980) cultural
dimensions. Section 3 outlines the research method employed and
is followed by an analysis of the results of the hypothesis tests.
The last section provides a discussion of the implications of the
study, its limitations and suggestions for future research.
Participation can be broadly defined as an organizational
process whereby individuals are involved in, and have influence
on, decisions that have direct effects on those individuals. While
participation can have many contexts and settings, one in particular
has, in recent decades, been of great interest to researchers in
management accounting. This is the area of participation in
budgeting, which can be more specifically defined as “a process
whereby a manager has involvement and influence on the determination of his or her budget” (Poon et al., 2001:101).
Why should management go for participation? Does it help
increase productivity and improve industrial relations? Research
literature indicates that participative management has many
advantages for all who are involved in it, both supervisors and
employees (Becker & Green, 1962; Swieringa & Moncur, 1975).
On the management side, Shields and Shields (1998) identify
information sharing and coordinating interdependence as key
reasons for budget participation. Therefore, greater understanding
of and willingness to implement efficient decisions would be
assured. For operating managers, on the other side, major advantages include, among other things, higher work motivation and
productivity and better industrial relations.
Extensive research has been conducted in the area of
participative budgeting. The results are inconsistent in explaining
linkages between participative budgeting and outcome variables
such as job satisfaction and job performance. In a related participative budgeting environment, Milani (1975) investigated whether
(1) the degree of participation in budget-setting and performance
are positively related, (2) the degree of participation in budgetsetting and attitude toward the job are positively related, and (3)
the degree of participation in budget-setting and attitude toward the
company are positively related. Results of the study indicate that
there is no significant relationship between participation and
performance. However, strong support exists for the relationship
between participation and (1) attitudes toward the job and (2)
attitudes toward the company. Kenis (1979) reveals that managers
who participate in the budgeting process appear to be more satis-
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fied than are their counterparts. In a similar vein, Merchant (1981)
reported a strongly positive relationship between participation and
both motivation and attitudes. However, Brownell (1982) found
only weak evidence for positive effects of participation on job
satisfaction. Yet, in spite of this long line of inquiry, the literature
remains fraught with contradictions, overlap and a general lack of
conclusiveness on the question whether participation is effective or
not. Particularly concerning the effects of budgetary participation
on job satisfaction, the results are difficult to integrate and often
Various researchers have suggested that the relationship
between participative budgeting and job satisfaction might be
contingent upon the presence of other moderating factors.
Brownell (1982:124) advanced four major classes of variables
(cultural, organizational, interpersonal and individual) that may
influence the relationship between participation and its consequences.
Internal-external locus of control was found by Brownell
(1981) to influence the effects of participation. Rotter (1966)
developed the “locus of control” construct. This refers to individual differences in a generalized belief in internal versus external
control of reinforcement. Those with an external locus of control
see themselves as relatively passive agents and believe that the
events in their lives are due to uncontrollable forces. Externals feel
that the things they want to achieve are dependent on luck, chance
and powerful persons or institutions. They believe that the probability of being able to control their lives by their own actions and
efforts is low. Conversely, those with an internal locus of control
see themselves as active agents, feel that they are masters of their
fates and trust in their capacity to influence the environment.
It is important to mention that prior research indicates that
locus of control is a fundamental personality trait. These studies
reveal that Internals are more satisfied than Externals when the
budgetary process is participatory and that internal supervisors or
managers are more participative in their budget-setting style.
Brownell (1982) examined the effects of participative budgeting
and locus of control on performance and job satisfaction in a field
setting. Brownell’s results indicate that participation does not have
a significant direct effect on job satisfaction, but that individuals’
locus of control has a moderating effect on the relationship between participation and job satisfaction. Using the work of
Hofstede (1980, 1983) for hypotheses development, Frucot &
Shearon (1991) tested the interrelationship of budget participation
and locus of control (a personality variable) and their impact on
job performance and job satisfaction. They assumed that an
organizational system such as budget participation would have
different effects in different cultures. Frucot & Shearon (1991)
theorized that culture might be an important variable in the budget
participation-performance and budget participation-job satisfaction
relationships. Recently, Leach-Lopez et al. (2008) have examined
the effects of budgetary participation and the personality variable,
locus of control, on the performance and job satisfaction of Mexican managers working for US controlled maquiladoras on the
US/Mexican border and within interior Mexico. This study, using
the same methodology, finds empirical results similar to those of
Frucot & Shearon (1991).
Although it has attracted the attention of numerous researchers in Western countries, little consideration has been given
to budgeting in developing countries, such as Tunisia. Thus,
investigating such concepts will provide the basic information
needed to develop a clear understanding for supervisor-employees’
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relationships in a non-Western context, which is not available
This paper tends to provide some support for a “contingent
benefits” model of the effects of participation in the budgeting
process. That is, the current research aims to investigate whether
budgetary participation of Tunisian managers enhances their job
satisfaction and whether the managerial locus of control, as a
personality variable, moderates this effect.
Hofstede (1980) identified four dimensions of culture:
- Power distance (PD): A measure of the degree to which cultures
prefer a more autocratic structure. In an organizational context,
this translates into the degree of participation that would be favored. A country scoring high on this construct would prefer a less
participative style. Hofstede (1980:92) provides evidence that, in a
large PD society, “close supervision [is] positively evaluated by
subordinates.” In a large PD society, subordinate consultation may
not be as important as in a small PD society, because there is a
tendency for the members of such a society to accept paternalistic
management (Perera & Mathews, 1990).
- Uncertainty avoidance (UA): A measure of the mean anxiety
level. A high anxiety level translates into less willingness to take
risks and a preference for security. According to Perera &
Mathews (1990), the fundamental issue involved in this dimension
is how a society reacts to the fact that the future is not known:
whether the society tries to control the future or just lets it happen.
- Individualism: A measure of the relative importance of independence from the organization. Cultures scoring high on this
construct stress goals and independence. Cultures scoring low on
this construct favor more dependence on the organization.
- Masculinity: A measure of the relative importance to the culture
of income, recognition, and advancement as compared to the
importance of work relations, cooperation and security. Some of
the issues raised by this dimension are career expectations and
acceptability of an autocratic manager (Perera & Mathews, 1990).
2.1 Legitimacy of Hofstede’s Approach in Tunisia
There are at least two studies that can legitimate the use of
Hofstede’s dimensions in the Tunisian cultural context. Ben
Fadhel (1992) did a double validation. First, to find the four
cultural Hofstede dimensions, he based his approach on the collective conscience, which is manifested through Tunisian proverbs.
The second validation is based on a survey of 150 persons representing the global Tunisian culture. The factorial analysis
confirmed the four cultural dimensions of Hofstede and added two
dimensions, namely anxiety and tolerance.
On the other hand, Zghal (1994), by studying the relationship between culture and organizational behaviors in Tunisia,
identified three cultural dimensions likely to explain many behaviors that occur in Tunisian companies. She spoke about (1) the
strong importance attached to values of equality and dignity, which
correspond to the power distance dimension of Hofstede, (2)
research and creation of unclear situations without any exact rules,
which is related to the uncertainty avoidance dimension of Hof-
Volume 12 (2010-11) Budgetary Participation
stede, and (3) the great value accorded to social relationships that
correspond to the individualism/collectivism dimension.
2.2 Tunisian National Culture
By studying the culture of certain Arab countries, Hofstede
concluded that the Arab world is characterized by a great power
distance, collective spirit, male tendency and high uncertainty
avoidance. However, these results should be taken carefully for
two reasons. First, scores attributed to different cultures are so old
(data used as a basis for these scores referred to 1967 and 1973).
Second, Arab culture is not homogenous: it is inconceivable to
speak about one unified Arab culture. (El Louadi 2004).
With reference to some studies that treated the Tunisian
culture issue,1 we can conclude that Tunisian national culture
presents some specificity that distinguishes it from the Arab
world’s culture described by Hofstede.
An acceptance of hierarchy, but with dignity: The importance of
equality and dignity values in Tunisian culture is reflected in
refusal of jobs dominated by others.
These behaviors can be well explained in the Muslim
religion, in which there is no mediation between God and human
beings. This can also be seen in popular Tunisian sayings and
proverbs, which assimilate working under others to servility
(Zghal, 1991). This can produce a dilemma in reality between this
equality notion wanted by Tunisian employee and submission in
institutions and organizations.
El Louadi (2004), Soyah & Magroun (2004), Lassouad (2008), Langar (1998),
Séror & Rejeb (1996), Ben Fadhel (1992), Zghal (1991).
According to Zghal (1991), Paternalism is presented as a
current form of resolution of this dilemma. Thus, in the ArabMuslim family, the culture of obedience is obvious: it’s the father
who has the absolute power (Eddakir, 2003), so children grow up
in an atmosphere marked by a mixture of submission and respect.
This model is reproduced elsewhere to govern relations between
student and teacher, employee and boss, etc.
This hesitation between refusing human inequality and
respect for the hierarchy probably explains Tunisians’ attitudes that
“always accept the hierarchy’s idea, but prefer a moderate position.” (Soyah & Magroun, 2004).
As to delegation of authority, Zghal concluded that it is
rarely practiced. Tunisian top managers think that their subordinates perform their tasks better when they have only to execute,
without taking any initiative. They consider them as relatively
passive agents, who seek only personal goals.
Ben Fadhel (1992) confirmed this tendency by detecting at
the same time features of high and low power distance.
A weak collectivism: Tunisia is an Arab-Muslim country, where
family and religion are the deep origins of social relations. These
two institutions teach Tunisians values and norms of solidarity and
affection. Zghal (1991) evoked the importance accorded, in
Tunisian society, to different social relationships (family, region,
tribe, school, etc.). On the other hand, an analysis of Tunisian
popular proverbs, coupled with the survey’s results on a representative sample of Tunisian social tissue, shows a community
tendency (Ben Fadhel, 1992). However, for some years, these
collectivist values have tended to decrease. In fact, a recent survey
(Lassouad, 2001) on organizational culture of Tunisian companies
showed that collectivism is a value moderately spread and this
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result may be due to the emergence of some individualist values in
current Tunisian society. Another recent study (Soyah & Magroun, 2004) concluded that one cannot distinguish in an obvious
way between individualist and collectivist tendencies of Tunisian
people. This ambiguity can be explained, according to this research, by the culture of clans. Thus, members of one clan, of one
family, are quite interdependent and cooperate together, while
interactions between members of different clans are based on
rational calculation. Moreover, in the Tunisian culture, strength
and identity come essentially from personal achievement, then
from group membership (Ben Fadhel, 1992).
A male tendency : The Tunisian culture presents a certain balance
between masculinity and femininity (Ben Fadhel, 1992), which is
marked, for example, in the interest accorded to quality of life (a
female value, according to Hofstede) as well as personal success (a
male value, according to Hofstede). However, Tunisian society
leans lightly toward male values, such as the desire to achieve
personal performance (Ben Fadhel, 1992) and the importance
given to work in a Tunisian employee’s life (Séror & Rejeb, 1996).
A weak uncertainty avoidance: according to Zghal (1990, 1991),
the Tunisian culture highlights a remarkable ambiguity in decisionmaking. This ambiguity is concretized by the absence of definite
rules in problem solving and also by avoidance of rules, even if
they exist, by high managers and their subordinates. A recent
study (Yahiaoui, 2004) accentuates this Tunisian cultural specificity and enhances it by evoking the “maktoub” (destiny) belief
toward uncertain situations. Ben Fadhel (1992) spoke about a
tendency to accept the risks, which can be found even in popular
proverbs and sayings. These features let us describe Tunisian
society as having weak uncertainty avoidance. Paradoxically,
some sectorial studies conducted in Tunisia highlight a high degree
of uncertainty avoidance. In fact, a case study of the telecommunications sector concluded that “Tunisian managers avoid
ambiguity and are less willing to take risks when establishing and
achieving their tasks” (Séror & Rejeb, 1996). Indeed, other studies
conducted in the transport sector (Langar, 1998) and in banking
(Soyah & Magroun, 2004) emphasized relatively high uncertainty
avoidance. These results may be justified by the specificity of
these sectors, which tend to minimize risk taking.
Prior studies suggest that the cultural sub-dimensions of
power distance and individualism may affect employee reactions to
participation (Harrison, 1992). Of these two dimensions, the
expectations derived from the level of power distance are clear
(O’Connor, 1995:386). This is because the norms and values
associated with this dimension refer to a society’s preference for a
particular leadership style, which can be related to a preference for
a high or low level of participation in the budget-setting process
(Hofstede, 1984:397). High power distance is likely to affect
employee reactions to participation unfavorably, because, in
unequal societies, power is not shared between superiors and
subordinates. In contrast, in low power distance societies, power is
shared between superiors and subordinates, because societies value
equality. By contrast, the expectations derived from the level of
individualism in a society remain unclear. Participation has been
argued as being culturally appropriate in both an individualist
(Milani, 1975) and collectivist (Harrison, 1992) societal context.2
For an individualist society, the individual’s commitment to the organization
can be seen as a calculative one. Here, participation is seen as culturally
appropriate, because it provides a mechanism by which goals and standards set
are internalized within the individual and, hence, the individual feels a greater
Volume 12 (2010-11) Budgetary Participation
Tunisia has relatively high power distance and low individualism (Zghal, 1990, 1991, 1994; Ben Fadhel, 1992). Hence, the
reaction of Tunisian managers to high participation is hypothesized
to be unfavorable. An interaction among budgetary participation
and manager’s personality affecting employee attitudes is expected. Therefore, the hypotheses tested in this study can be stated
as follows:
H1: In Tunisia, the degree of participation in the budgetary process
leads to low satisfaction.
H2: In Tunisia, there will be a significant interaction between
budgetary participation and locus of control affecting job satisfaction.
3.1 The Sample: In this study, a non-random method of sampling
was adopted. Because of difficulties in access to Tunisian companies, family and friendly ties were used in order to facilitate the
entry to these companies and therefore managers’ collaborations in
the current study. Also, close relatives were consulted and asked
whether they had contacts in Tunisian industrial companies. If
these contacts existed, they would serve as bridges to middlemanagers, objects of the study, in each company. As a result, the
final sample consisted of 75 middle-level managers working in 31
different Tunisian industrial companies, varying in size and
sense of responsibility to achieve it (Milani, 1975). Consequently, employees
develop greater motivation. For a collectivist society, participation is also seen
as culturally appropriate (Harrison, 1992), due to the belief that group decisions
are superior to individual decisions and that this is consistent with a preference
for a participative type management style.
industry. The organizations ranged in size from 200 to 2236
employees. All companies were entirely Tunisian-owned. Data
collection was restricted to middle-level managers, who were
supposed to have some budgetary responsibilities, in each organization. The respondents represented four different functional
areas, with 26 managers working in the financial area. All respondents had been with their organizations for at least two years.
The mean age of respondents was 40 years old.
3.2 Data Collection: A questionnaire survey was used. The
research started with a brief interview with a senior corporate
official, such as the financial vice-president, controller, or director
of planning and budgeting. This interview was used to gather data
on the company (size, kind of industry...) and its corporate planning and budgeting systems and to identify a sample of middlelevel managers who were involved in budgeting. The managers
were assured that the questionnaire was for research purposes only
and that it would be anonymous. The questionnaires were personally distributed to 93 middle-level managers involved in the study,
who kept them to complete on their own time. The completed
questionnaires were then collected. Personal contacts with both
the companies and the respondents led to an 83 per cent response
rate. However, of the 78 questionnaires collected, three were
excluded from the study for incomplete responses. The final
sample size for hypotheses testing was reduced to N=75.
3.3 Variables Measurement: Three variables were measured by
the questionnaire: budgetary participation, locus of control, and
job satisfaction.
Volume 12 (2010-11) Budgetary Participation
3.3.1 Budgetary participation. The six-item instrument of Milani
(1975) was employed to assess budgetary participation. The
instrument attempted to assess the respondent’s involvement in and
influence on the budget process. The scale is additive, with the
summed score providing a measure of the respondent’s perceived
degree of participation in the budgeting process. Satisfactory
reliability and validity for the scale have been reported by prior
researchers (e.g., Brownell, 1982; Chenhall, 1986; Dunk, 1989;
Frucot & Shearon, 1991, and O’Connor, 1995). In the current
study, the Cronbach alpha coefficient is 0.95.
3.3.2 Locus of control. The internal-external scale questionnaire,
developed by Rotter (1966), was employed to assess locus of
control. It contains 29 questions that require a forced response
between “internal and external” answers. This instrument is
widely used in psychological and accounting researches and
several extensive literature reviews attest to its validity and reliability (Swieringa & Moncur, 1975; Brownell, 1981, 1982). In this
study, the Cronbach alpha coefficient is 0.80.
3.3.3 Job satisfaction. The Job Descriptive Index (JDI) of Smith
et al. (1969) was chosen to assess job satisfaction. This instrument
outperformed a satisfactory rate of validity (Kenis, 1979). It
measures managerial satisfaction at five scales: the remuneration,
the opportunity of promotion and advancement, the job itself, the
relations with the supervisor, and the relations with colleagues. As
for reliability of the scale, the Cronbach alpha coefficient is 0.88.
As noted later, descriptive statistics for the independent
variables and dependent variables are presented in Table 1. Table
2 presents the results of the regression analysis. The following
model was used to test the hypotheses:
SAT=a0 + a1 BP + a2LOC + a3BP*LOC + 
Where SAT is satisfaction, measured using the JDI of Smith et al.
(1969); BP represents standardized budgetary participation [(BPBP) ∕ σ BP]; LOC is a standardized locus of control score [(LOC –
LOC) ∕ σ LOC]; BP*LOC is the multiplicative interaction term of
budgetary participation and locus of control.
Table 1: Descriptive Statistics for Measured Variables
participation 75
Job satisfaction
Locus of
Possible Actual
range Mean deviation Variance
15/74 52.73
33/92 63.61
4.1 Budgetary Participation and Job Satisfaction
The model (1) tests the effect of participation, locus of
control and their interaction on job satisfaction. The interaction
term matches the personality trait with the characteristics of the
firm’s budgetary process. The results of the moderated regression
Volume 12 (2010-11) Budgetary Participation
analysis are reported in Table 2. The participation coefficient is
found to be significantly negative (-0.348) and hence supports, the
expected sign. This suggests that participation, alone, exerts a
substantial negative influence on job satisfaction of the Tunisian
managers. This finding is not consistent with previous results
(Milani, 1975; Kenis, 1979; Chenhall, 1986; Frucot & Shearon,
1991; Lopez et al., 2007; Lopez et al., 2008), which attest a
positive association between the two constructs. However, it is in
accordance with Hofstede’s framework, in which it was expected
that Tunisian managers would prefer a non-participative budgetary
structure. Thus, the first hypothesis is supported.
4.2 Moderating Effect of Locus of Control
According to Sharma et al. (1981), to identify the presence
and the kind of the moderator variable, two methods may be used:
sub-group analysis and moderated regression analysis – ARM. In
reality, these two methods are complementary, because the moderated regression analysis, standing alone, can detect only the
presence or absence of an interactive effect. It does not reveal how
this factor influences the direct relationship. For the present study,
the two methods were combined, in order to determine whether
there is any interaction between locus of control and job satisfaction and, if it exists, how it affects job satisfaction.
As reported in Table 2, the interaction coefficient is significant at the 0.01 level. The coefficient for locus of control is
positive, but fails to reach significance at any reasonable level.
These results indicate that job satisfaction is associated with both
locus of control and participation.
Table 2: Regression Results
Locus of
† p < .10
* p < .05
** p < .01
Standard deviation
1.46 E02**
It is clear that there is a significant interaction between budgetary
participation and locus of control in affecting job satisfaction.
These results support the second hypothesis.
4.3 Further Analysis
In order better to explore the second hypothesis, a subgroup analysis was performed, by dividing the sample into two
groups (G1: Internals and G2: Externals).3 Then, a linear regression analysis was performed on each group.
The interviewee was classified as Internal or External based on his number of
internals and externals responses. Thus, if most of his responses are externals, he
will be classified as External and if the most of his responses are internals, he
will be Internal.
Volume 12 (2010-11) Budgetary Participation
SATI = β0+ β1BPI + 
Where SATI is standardized job satisfaction; BPI is standardized
budgetary participation for internals.
SATE = α0 +α1BPE + 
Where SATE is standardized job satisfaction for externals; BPE is
standardized budgetary participation for externals.
Table 3: Regression Results for Internals
Adjusted R2 = 0.157
† p < .10
** P < .01
Table 4: Regression Results for Externals
Coefficients Value
Adjusted R2 = 0.61
** p < .01
As shown in Table 3 and Table 4, the participation coefficients are statistically significant and show the expected sign.
They imply that satisfaction with the particular job-aspect is higher
for Internals in high participation conditions and for Externals in
low participation conditions. It seems that Internals are significantly more satisfied with high budgetary participation. However,
Externals do not prefer this kind of budgeting system.
This study clearly demonstrates that managerial attitudes
and behaviors vary according to organizational and individual
backgrounds. It provides evidence that cultural differences may
lead to different responses to participative budgeting and that
various groups within a culture may react differently to a particular
budgeting system. In terms of job satisfaction, in particular, the
results tend not to support previous research findings in Western
nations. They demonstrate that participation alone negatively
affects the job satisfaction of Tunisian managers. This result is,
clearly, not consistent with the findings of a number of studies that
focused on the influence of budgetary participation on managers’
attitudes and behaviors. In particular, it does not support Brownell
(1982)’s finding.
This divergence may be attributed to cultural differences.
At least two possible explanations can be imagined in attempting
to justify this negative association: First, Tunisian top managers
are likely practicing pseudo-participation and not real participation.
A pseudo-participative process is defined as a budgeting process
that leads subordinates to believe that they will have some influence on the budget that is set, but, in reality, their input is ignored
(Libby, 1999). In the context of Arab culture, the pseudo-
Volume 12 (2010-11) Budgetary Participation
participative phenomenon may exist for two reasons. (1) Many
managers have been influenced by Western management philosophy and by the benefits of the participative approach. This has
complicated management development, as the Arabs display an
infatuation with ideal forms, even when they know these forms to
be contradicted by reality (Abbas, 1989). Individuals are suffering,
in general, from a problem of duality in thinking and practice. (2)
The early childhood socialization process in the Arab culture
provides fertile ground to prepare individuals to be oriented toward
people, rather than toward material gains. Individuals are socially
trained to participate in conversations and to take part in social
ceremonies in early childhood life. As a person reaches the age of
thirteen or fourteen years, however, he or she is trained more in
playing strict social roles and in adhering to societal norms (e.g.,
obey authoritarian and older persons, listen and show respect). In
this context, one would expect some tension to exist between the
“ideal” (participative) and the “practical” (authoritarian). It’s
likely, therefore, that a relatively high portion of Arab managers
display preference for the pseudo-participative approach. The
Pseudo-participation can have demotivating effects on subordinates and can lead to dysfunctional effects (Becker & Green, 1962;
Libby, 1999).
Second, as noted in studies focused on Tunisian culture
(Zghal, 1991; Ben Fadhel, 1992), this negative association between
budgetary participation and job satisfaction would appear reasonable and even expected. The Tunisian culture emphasizes rare
delegation of power (strong centralization) and refusal of responsibilities. Based on Hofstede’s (1980) classification scheme, in
Tunisia, a more paternalistic and autocratic leadership style (with
less participation in decision making and more rules and centralization) would be preferred (Ben Fadhel, 1992). In addition, more
dependence of the individual on the organization is expected. In
fact, the Arabic cluster of which Tunisia is a unit is classified as
having high power distance and low individualism. In such a
cultural climate, managers’ reactions to participation are expected
to be negative (Harrison, 1992).
Based on this study’s results, Tunisian firms may wish to
exercise caution when applying participative budgeting techniques,
perhaps by involving middle-level managers in the implementation
process. Bourguignon et al. (2004) indicate that when a management technique (such as participative budgeting) is exported to a
new cultural environment, implementation is more successful
when the ideological framework (of which the culture is a unit) is
coherent with the characteristics of that technique. “When management approaches are transferred and insufficient consideration
is given to their ideological assumptions, they are likely to miss
their objectives and to prove very disappointing. The importance of
local ideology should be recognised, especially in the case of
management systems created and developed in ideologically
different environments.” (Bourguignon et al., 2004:109).
The results support the expectation that participation is
most effective for internally-oriented individuals. Tunisian Internal managers are satisfied under a participative budgeting system
but Externals are not. The reactions of managers to budgetary
participation differ clearly according to their personal traits.
Internals, because they behave as active members of the group and
aim to be involved in the decisional process of the company, prefer
a participatory budgeting system, where they will have some
influence on the budget that is set jointly. Thus, this participatory
system gives them opportunities to influence the environment and
be active agents in consequence. Also, External managers seem to
refuse responsibilities. They prefer receiving and executing top
Volume 12 (2010-11) Budgetary Participation
management’s orders. They even perform better under an autocratic decisional system. Thus, they react negatively to budgetary
The result of this study has practical as well as theoretical
relevance. Some practical conclusions, which would lead to
effective and successful organizations in the Tunisian context, are:
(1) Management should create a positive environment, by focusing
on the social relationships between employees and their supervisors and developing a clear job description to help employees
understand what they have to do, along with allowing some real
participation by the employees in making decisions. (2) When
implementing budgeting systems, designers ought not to give high
budgetary participation indiscriminately to subunit managers.
They must consider the personal characteristics of managers
involved in this budgeting system.
As regards theory development, the results of this study
suggest the fruitfulness of considering other contingency variables
in researching the effects of participative budgeting. As Brownell
(1982) argued, participation in the budgetary process might be
contingent on four groups of variables: cultural, organizational,
interpersonal and individual. Future research should focus attention on all four groups of contingency factors, in order to develop a
comprehensive and integrated model specifying the conditions
under which budgetary participation will produce favorable
Our study has common limitations found in this type of
research. As the sample of this study was relatively small, the
results of this study may not be generalized to Tunisian organizations in general. Each variable is measured with an established
scale, but each of these scales contains some level of measurement
error and each observation is dependant on the subject answering
truthfully and accurately. There is also the potential weakness of
using self-reported measures of budget participation. Self-reported
levels of participation may be more relevant than external
measures of participation, because it should be the subject’s
perception of budget participation that influences behavior. The
survey approach as well has limitations, such as the lack of control
over who responds to the questionnaires (Nouri & Parker, 1996).
In the empirical model, SAT=a0 + a1 BP + a2LOC + a3BP*LOC
+  there are some control variables that may affect job satisfaction, such as working experiences, working functions, managers’
individual factors. I suggest that future research include some
control variables to the model, in order to increase the internal
validity of the study.
Notwithstanding these limitations, this research provided
supportive evidence of the need to recognize the existence of
important moderating effects of the personality variable, locus of
control, on the relationship between participation and job satisfaction. Further research is obviously needed to expand our
understanding and awareness of other individual characteristics
that complement design features of budgetary control systems.
Indeed, the most basic question of which control system features
are more appropriate to manage activities that face differing
environmental and cultural circumstances still remains largely
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