Mediating cognitive effects of information sharing on the relationship between budgetary participation and managerial performance

Lunardi, Micheli Aparecida; Zonatto, Vinícius Costa da Silva; Nascimento, Juliana Constâncio

doi:10.1590/1808-057x201908610

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Revista Contabilidade & Finanças

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Original Article • Rev. contab. finanç. 31 (82) • Jan-Apr 2020 • https://doi.org/10.1590/1808-057x201908610 copy

Mediating cognitive effects of information sharing on the relationship between budgetary participation and managerial performance^* * Paper presented at the XII ANPCONT Congress, João Pessoa, PB, Brazil, June 2018. ,^ The authors are grateful to the National Council for Scientific and Technological Development (CNPq) and to the Coordination for the Improvement of Higher Education Personnel (Capes) for their financial support to carry out this research.

Authorship SCIMAGO INSTITUTIONS RANKINGS

ABSTRACT

This article aims to analyze the mediating cognitive effects of vertical information sharing in the budgeting process on the relationship between budgetary participation and managerial performance. The behavioral literature in the area of accounting has diverged regarding the cognitive effects of budgetary participation on managerial performance. Evidence found in this literature reveals that there are possible intervening variables in this relationship that may influence the cognitive effects of participation on performance. Considering that budgetary participation can affect the cognition and performance of individuals at work, it is relevant to analyze the budget management practices adopted by organizations and the effects they have on individuals with budgetary responsibilities. The evidence found shows that an organization’s budgetary configuration influences the way information sharing will occur and will consequently have cognitive effects on managerial performance. This descriptive study was conducted by collecting data and employing a quantitative approach to analyze them, using structural equations modeling. The research sample comprised 316 respondents with budgetary responsibilities who carry out the role of controller, controlling manager, or controlling coordinator in Brazilian companies. The results show that budgetary participation positively influences vertical information sharing, which presented a positive influence on managerial performance. Vertical information sharing results from cognitive effects of budgetary participation. Higher levels of vertical information sharing are reflected in lower role ambiguity and better managerial performance. Even if individuals with budgetary responsibilities perceive the existence of information asymmetry in the work environment, its effects on performance are not significant. These results contribute to understanding the mediating cognitive effects of information sharing on the relationship between participation and performance, revealing that the effects of participation on performance may not occur based on a simple causality relationship, but instead based on certain conditioning factors.

Keywords:
budgetary participation; vertical information sharing; managerial performance

Variables	Operational definitions	Scale	Authors
Budgetary participation (BP)	Evaluates the individual’s influence on the budgeting process.	Six indicators 7-point Likert	Milani (1975Milani, K. (1975). The relationship of participation in budget-setting to industrial supervisor performance and attitudes: A field study. The Accounting Review, 50(2), 274-284.)
Vertical information sharing (IS)	Determines the degree to which subordinates communicate information about local conditions to their superiors.	Three indicators 7-point Likert	Parker and Kyj (2006Parker, R. J., & Kyj, L. (2006). Vertical information sharing in the budgeting process. Accounting, Organizations and Society, 31(1), 27-45.)
Role ambiguity (RA)*	Describes the lack of clarity of expectations in relation to job roles and the level of uncertainty regarding the results of the performance itself.	Six indicators 7-point Likert	Rizzo, House, and Lirtzman (1970Rizzo, J. R., House, R. J., & Lirtzman, S. I. (1970). Role conflict and ambiguity in complex organizations. Administrative Science Quarterly, 15(2), 150-163.)
Information asymmetry (IA)*	Determines the degree to which a superior has more information than the subordinate regarding the subordinate’s area of responsibility.	Six indicators 7-point Likert	Dunk (1993Dunk, A. S. (1993). The effect of budget emphasis and information asymmetry on the relation between budgetary participation and slack. Accounting review, 68(2), 400-410.)
Managerial performance (MP)	Evaluates the performance measure of managers with budgeting responsibilities in their work activities.	Nine indicators 7-point Likert	Mahoney, Jerde, and Carroll (1963, 1965, cited by Zonatto, 2014Zonatto, V. D. S. (2014). Influência de fatores sociais cognitivos de capacidade, vontade e oportunidade sobre o desempenho gerencial nas atividades orçamentárias das maiores empresas exportadoras do Brasil (Doctoral Thesis). Universidade Regional de Blumenau, Blumenau. Retrieved from http://www.bc.furb.br/docs/TE/2014/358328_1_1.pdf. http://www.bc.furb.br/docs/TE/2014/35832... )

Indicator	Recommended value	Reference	Expected value
Chi-squared/DF	< 5	Hair et al. (2009Hair, J. F., Black, W. C., Babin, B. J., Anderson, R. E., & Tatham, R. L. (2009). Análise multivariada de dados. Porto Alegre, RS: Bookman.)	< 5
Statistical significance (p)	< 0.05		< 0.05
CFI	< 0 and < 1 (the closer to 1 the better)		> 0.90
TLI			> 0.90
NFI			> 0.90
GFI		Jöreskog and Sörbom (1989Jöreskog, K. G., & Sörbom, D. (1989). SPSS LISREL 7 and PRELIS. User's guide and reference. Bloomington, IN: SPSS.)	> 0.90
AGFI			> 0.90
RMSEA	< 0.10	Hair et al. (2009Hair, J. F., Black, W. C., Babin, B. J., Anderson, R. E., & Tatham, R. L. (2009). Análise multivariada de dados. Porto Alegre, RS: Bookman.)	< 0.10
Cronbach’s alpha (construct)	> 0.70		> 0.70
Factor loads (indicators)	> 0.40		> 0.40
Composite reliability	> 0.50		> 0.50
Extracted validity	> 0.50		> 0.50

Var.	CA	KMO	BST	TVE%	Ind.	TI	RI	Mean	SD	AS	KT	FL	Com.
BP	0.85	0.835	865.2	60.0	BP01	1-7	1-7	6.49	1.07	-2.78	8.71	0.81	0.66
					BP02	1-7	1-7	5.75	1.43	-1.20	1.05	0.61	0.37
					BP03	1-7	1-7	6.44	0.99	-2.50	7.92	0.79	0.63
					BP04	1-7	1-7	6.10	1.24	-1.72	3.20	0.80	0.64
					BP05	1-7	1-7	6.42	0.97	-2.58	8.91	0.83	0.69
					BP06	1-7	1-7	5.97	1.31	-1.63	2.63	0.76	0.58
MP	0.88	0.893	1315	53.8	MP01	1-7	1-7	5.92	0.93	-1.04	2.03	0.70	0.49
					MP02	1-7	1-7	5.93	0.95	-1.20	3.049	0.75	0.56
					MP03	1-7	3-7	6.02	0.91	-0.68	-0.21	0.67	0.46
					MP04	1-7	2-7	5.75	1.00	-0.63	0.07	0.81	0.66
					MP05	1-7	1-7	6.08	0.97	-1.31	2.48	0.77	0.60
					MP06	1-7	1-7	5.84	1.07	-1.19	2.22	0.80	0.64
					MP07	1-7	1-7	5.61	1.17	-1.05	1.59	0.68	0.46
					MP08	1-7	1-7	5.29	1.42	-0.81	0.31	0.71	0.50
					MP09	1-7	4-7	5.89	0.74	-0.42	0.11	0.66	0.44
IS	0.84	0.71	437.2	77.3	IS01	1-7	1-7	6.09	1.13	-1.88	4.57	0.89	0.80
					IS02	1-7	1-7	6.20	1.09	-2.22	6.40	0.90	0.81
					IS03	1-7	1-7	5.69	1.37	-1.36	1.80	0.83	0.69
RA	0.81	0.826	648.1	53.5	RA01	1-7	1-7	6.37	0.91	-2.05	5.94	0.57	0.33
					RA02	1-7	1-7	5.89	1.37	-1.60	2.54	0.73	0.53
					RA03	1-7	1-7	5.33	1.50	-0.83	1.17	0.64	0.42
					RA04	1-7	1-7	6.47	0.88	-2.39	7.88	0.76	0.58
					RA05	1-7	1-7	5.85	1.31	-1.28	1.50	0.84	0.71
					RA06	1-7	1-7	5.44	1.54	-0.88	0.05	0.79	0.62
IA	0.95	0.892	1998.8	81.3	IA01	1-7	1-7	3.82	1.98	0.05	-1.25	0.88	0.79
					IA02	1-7	1-7	3.76	1.94	0.06	-1.20	0.91	0.83
					IA03	1-7	1-7	3.85	1.88	-0.01	-1.08	0.91	0.83
					IA04	1-7	1-7	3.49	1.88	0.20	-1.14	0.90	0.82
					IA05	1-7	1-7	3.92	1.81	-0.04	-0.94	0.88	0.78
					IA06	1-7	1-7	3.77	1.82	0.03	-1.04	0.90	0.81

Indicator	Expected value	Initial model	Purified final model
Chi-squared		925.990	595.490
DF		370	226
Chi-squared/DF	< 5	2.503	2.635
Statistical significance (p)	< 0.05	0.000	0.000
CFI	> 0.90	0.903	0.900
TLI	> 0.90	0.894	0.888
NFI	> 0.90	0.850	0.850
GFI	> 0.90	0.826	0.856
AGFI	> 0.90	0.796	0.824
RMSEA	< 0.10	0.069	0.072

Results of the initial model
Structural paths			Estimate	Standard error	t-value	ρ	Standardized coefficient	R²
IS	←	BP	0.868	0.072	12.101	*	0.761	0.579
IA	←	IS	0.153	0.109	1.404	0.160	0.086	0.007
RA	←	IS	-0.468	0.064	-7.315	*	-0.513	0.263
MP	←	IS	0.386	0.072	5.368	*	0.605	0.424
MP	←	IA	-0.034	0.018	-1.897	0.058	-0.095	0.424
MP	←	RA	-0.150	0.047	-3.198	0.001	-0.215	0.424
MP	←	BP	-0.091	0.069	-1.326	0.185	-0.125	0.424
Results of the purified final model
IS	←	BP	0.865	0.072	12.061	*	0.756	0.571
RA	←	IS	-0.464	0.064	-7.293	*	-0.511	0.261
MP	←	IS	0.314	0.046	6.796	*	0.496	0.397
MP	←	RA	-0.147	0.047	-3.132	0.002	-0.210	0.397

	Variables		BP	IS	RA	IA	MP
Independent variables	Control (national/multinational)	Coefficients	0.026	0.189*	0.029	-0.001	0.039
	Capital (open/closed)		-0.134*	-0.001	-0.135*	-0.082	-0.003
	Industry		0.098	0.149*	0.029	-0.075	0.082
	Size (turnover)		-0.013	-0.036	-0.099	0.023	-0.025
	Nº of employees		0.034	-0.028	0.109	0.172*	0.007
	Time the company has existed		-0.002	-0.014	0.044	-0.050	-0.069
R²			0.024	0.045	0.024	0.027	0.010
Sig. Anova			0.285	0.025	0.281	0.211	0.791

Universidade de São Paulo, Faculdade de Economia, Administração e Contabilidade, Departamento de Contabilidade e Atuária Av. Prof. Luciano Gualberto, 908 - prédio 3 - sala 118, 05508 - 010 São Paulo - SP - Brasil, Tel.: (55 11) 2648-6320, Tel.: (55 11) 2648-6321, Fax: (55 11) 3813-0120 - São Paulo - SP - Brazil
E-mail: recont@usp.br

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[1] Correspondence address:
Micheli Aparecida Lunardi. Universidade do Estado de Santa Catarina, Centro de Educação Superior do Alto Vale do Itajaí, Departamento de Ciências Contábeis. Rua Doutor Getúlio Vargas, 2822 - CEP 89140-000. Bela Vista - Ibirama - SC - Brazil Email: michelilunardi01@gmail.com