Scandinavian Working Papers in Business Administration

SSE/EFI Working Paper Series in Business Administration,
Stockholm School of Economics

No 3: Budgetary Participation in a Public Service Organization

Claes Charpentier
Additional contact information
Claes Charpentier: Dept. of Business Administration, Stockholm School of Economics, Postal: P.O. Box 6501, S-113 83 Stockholm, Sweden

Abstract: In this study the phenomenon of budgetary participation is analyzed. The theories in budgetary participation are described and elaborated. This is a case study and the case is a public service organization, namely the Post Office in Sweden. Empirically two specific research questions are focused. The first question is the relationships between budget participation and some other budget concepts. These other concepts are the budget style and the budget method. Therefore, the relationships between budget style and participation as well as the choice of budget method and participation were investigated. The results were that the extent of budgetary participation changed from time to time during the four-year research period dependent on the budget style in use. When the extent of participation changed the budget method also changed. The second research question is the effects of budgetary participation. The effects on the performance and motivation of the subordinate managers are analyzed. A certain relationship between a lower extent of participation and a higher level of performance can be established in this case, although it may appear strange. The negative relationship probably depends on the fact that the studied organization was in a crisis situation due to the lack of profitability. The relationship is, therefore, dependent on the situation. Thus, the relationship became different from "conventional wisdom" in budget theory, expressed through certain budget literature, for example Becker & Green (1962). The result, nevertheless, agrees with some later research reports which have shown that the relationship is situation-dependent. In this case, the contingent factor is the profitability situation of the organization. Even a certain relationship between a lower extent of BP and a higher level of motivation existed in this case. Also this result appeared to be situation dependent. The contingent factor was to what degree the budget objectives were experienced as being challenging.

Keywords: Budget control system; Budgetary participation; Budgeting; The budget process in the Post Office; Different budget methods; Extent of budgetary participation; The negotiation aspect of the budget dialog; Evaluation of the extent of budgetary participation; Effects of budgetary participation; The relationship between budgetary participation and performance and motivation is situation dependent.

25 pages, September 22, 1998

Full text files PDF-file Full text
hastba0003.pdf PDF-file Full text PostScript file Full text PostScript file Full text

Download statistics

Questions (including download problems) about the papers in this series should be directed to Helena Lundin ()
Report other problems with accessing this service to Sune Karlsson ().

This page generated on 2018-03-27 10:27:29.