The Effect of Organizational Politics on Budgetary Participation with Procedural Fairness as a Mediation
Abstract
Organizational politics and budgeting are the phenomena that exist in every organization. This study aims to examine the effect of organizational politics on budgetary participation through procedural fairness. Organizational politics refers to three dimensions, namely general political behavior, politics of going along to get ahead, and politics of pay and promotion policies. Data were collected through a questionnaire survey to 128 managers in the retail sector of the modern supermarket in Bandung, West Java, Indonesia. The data was processed using the structural equation model and Sobel test. This study shows that, firstly, general political behavior, politics of going along to get ahead, pay and promotion policies have a negative effect on procedural fairness. Second, procedural fairness has a positive effect on budgetary participation. Third, procedural fairness mediates the relationship between each organizational political dimension and budgetary participation. This study supports the theory of organizational politics and procedural fairness and has the implications for budgeting practices, namely that it is important to consider employee's perceptions of organizational politics because it has an impact on reducing the sense of fairness and eventually on budgetary participation.
Keywords
Full Text:
PDFReferences
Andrews, M. C. & Kacmar, K. M. (2001). Discriminating among organizational politics, justice, and support. Journal of Organizational Behavior, 22, 347-366.
Aryee, S., Chen, Z. X., & Budhwar, P. S. (2004). Exchange fairness and employee performance: An examination of the relationship between organizational politics and procedural justice. Organizational Behavior and Human Decision Processes, 94, 1-14.
Beugré, C. D. & Liverpool, P. R. (2006). Politics as determinant of fairness perceptions in organizations. In Handbook of Organizational Politics (pp.122-135).
Blocher, E. J., Stout, D. E., & Cokins, G. (2010). Cost Management: A Strategic Emphasis (5 ed.). New York: McGraw-Hill.
Byrne, Z. S. (2005). Fairness reduces the negative effects of organizational politics on turnover intentions, citizenship behavior and job performance. Journal of Business and Psychology, 20(2), 175-200.
Chenhall, R. H. & Brownell, P. (2011). The effects of participative budgeting on job satisfaction and performance: Role ambiquity as an intervening variable. Accounting, Organisation, and Society, 13(3), 225-233.
Colquitt, J. A. (2001). On the dimensionality of organizational justice: A construct validation of a measure. Journal of Applied Psychology, 86(3), 386-400.
Chong, V. K. & Strauss, R. (2017). Participative budgeting: The effects of budget emphasis, information asymmetry and procedural justice on slack–Additional evidence. Asia-Pacific Management Accounting Journal, 12(1): 181-220.
De Baerdemaeker, J. & Bruggeman, W. (2015). The impact of participation in strategic planning on managers’ creation of budgetary slack: the mediating role of autonomous motivation and affective organizational commitment, Management Accounting Research, 29(4), 1-12.
Dubrin, A. J. (2010). Principles of leadership. South-Western Cengage Learning.
Fogler, R. & Konovsky, M. (1989). Procedural justice and culture: Effects of culture, gender, and investigator status of procedural preferences. Journal of Personality and Social Psychology, 50(6), 1134-1140.
Griffin, R. W. & Moorhead, G. (2014). Organizational Behavior: Managing People and Organizations. Mason: South-Western Cengage Learning.
Gunn, J. & Chen, S. (2006). A-micro political perspective of strategic management. In E. Vigoda-Gadot, & A. Drory (Eds.), Handbook of Organizational Politics. Cheltenham: Edward Edgar Publishing.
Hair, J. F., Hult, G.T.M., Ringle, C., Sarstedt, M. (2016). A Primer on Partial Least Squares Structural Equation Modeling (PLS-SEM). Sage Publication.
Irwandi, S.A. & Akbar, T. (2014). Goal-setting participation as strategic measurement performance for enhancing managerial performance through procedural fairness and interpersonal trust. Journal of Economics, Business, and Accountancy Ventura, 17(3), 353 – 364.
Kacmar, K. M. & Carlson, D. S. (1997). Further validation of the perception of politic scale (POPS): Multiple sample investigation. Journal of Management, 23(5), 627-658.
Kacmar, K. M. & Ferris, G. (1991). Perceptions of organizational politics scale (POPS): Development and construct validation. Educational and Psychological Measurement, 51(1), 193–205.
Kacmar, K. M. & Baron, R. (1999). Organizational politics: The state of the field, links to related processes, and an agenda for future research. (G. Ferris, Ed.) Research in human resources management, 17, 1-39.
Kaya, N., Aydin, S., & Ayhan, O. (2016). The effects of organizational politics on perceived organizational justice and intention to Leave. American Journal of Industrial and Business Management, 6(3), 249-258.
Kenno, S. A., Lau, M. C., & Sainty, B. J. (2018). In search of a theory of budgeting: A literature review. Accounting Perspective, 17(4), 507-553.
Lau, C. M. & Scully, G. (2015). The roles of organizational politics and fairness in the relationship between performance management systems and trust. Behavioral Research in Accounting, 27(1), 25-33.
Lau, C. M. & Lim, L. W. (2002). The intervening effects of participation on the relationship between procedural justice and managerial performance. British Accounting Review, 34(1), 55-78.
Lau, C. M. & Moser, A. (2008). Behavioral effects on nonfinancial measures: The role of procedural fairness. Behavioral Research in Accounting, 20(2), 55-71.
Lau, C., Scully, G., & Lee, A. (2018). The effects of organizational politics on employee motivations to participate in target setting and employee budgetary participation. Journal of Business Research, 90, 247-259.
Libby, T. (1999). The Influence of Voice and Explanation on Performance in a Participative Budgeting Setting. Accounting, Organizations and Society, 24(2), 125-137
Lind, E. & Tyler, T. (1988). The social psychology of procedural justice. New York: Plenum Press.
Mahlendorf, M. D. (2015). Antecedents of participative budgeting: A review of empirical evidence. Advances in Management Accounting, 25, 1-27.
McFarlin, D. & P. Sweeney. (1992). Distributive and Procedural Justice as Predictors of Satisfaction with Personal and Organizational Outcomes. Academy of Management Journal, 35(3), 626–637.
Milani, K. (1975). Budget-setting, performance and attitudes. The Accounting Review, 50, 274–284.
Murdayanti, Y., Indriani, S., & Umaimah, W. (2020). Determinants of participative budgeting and its implication on managerial performance. Accounting, 6, 1305-1312.
Nguyen, N.P., Evangelista, F & Anh Kieu, T. (2019). The contingent roles of perceived budget fairness, budget goal commitment and vertical information sharing in driving work performance. Journal of Asian Business and Economic Studies, 26(1), 98-116.
Rachman, A. A. (2014). Pengaruh keadilan prosedural terhadap penganggaran partisipatif melalui komitmen organisasi. Jurnal Ekonomi dan Bisnis, 17(3), 55-78.
Rengel, R. M. (2020). Effect of manager’s characteristics on budget participation mediated by perception of procedural justice. Journal of Accounting, Management, and Governance, 23(2), 256-275.
Shields, J. F. & Shields, M. D. (1998). Antecedents of participative budgeting. Accounting, Organizations and Society, 23(1), 49-76.
Sholihin, M. & Pike, R. (2010). Organisational commitment in the police service: exploring the effects of performance measures, procedural justice and interpersonal trust. Financial Accountability & Management, 26(4), 392-421.
Stone, B. (1997). Confronting company politics. London: Macmillan Press.
Wang, K. Y. & D. Z. Nayir. (2010). Procedural justice, participation, and power distance: Information sharing in Chinese firms. Management Research Review, 33(1), 66-78.
Wong-On-Wing, B., Guo, L., & Lui, G. (2010). Intrinsic and extrinsic motivation and participation in budgeting: Antecedents and consequences. Behavioral Research in Accounting, 22(2), 133-153.
Yucel, R. & M. Günlük. (2007). Effect of budgetary control and justice perceptions on the relationship between budgetary participation and performance. Journal of Global Strategic Management. (October): 82-93.
DOI: http://dx.doi.org/10.14414/jebav.v24i1.2613
Refbacks
- There are currently no refbacks.
Copyright (c) 2021 Journal of Economics, Business, & Accountancy Ventura
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.
Abstracting & Indexing
Copyright @ 2010 Pusat Penelitian dan Pengabdian Masyarakat Sekolah Tinggi Ilmu Ekonomi (PPPM STIE)