The Effect Of Participation In The Preparation Of The Budget On Managerial Performance With Communication And Commitment As A Moderating Variable In The North Sumatra Province PDAM

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The Effect of Participation in the Preparation of the Budget on Managerial Performance with Communication and Commitment as Moderating Variables in the North Sumatra Province PDAM

Introduction

The preparation of the budget is a crucial process in any organization, as it sets the direction for the allocation of resources and the achievement of goals. In the context of the North Sumatra Province PDAM, the budget preparation process is no exception. However, the relationship between manager participation in the budget preparation process and managerial performance has been a topic of debate among accounting researchers. While some studies have found a positive relationship between the two, others have reported conflicting results. This study aims to investigate the effect of manager participation in the budget preparation process on managerial performance, with communication and commitment as moderating variables.

Literature Review

The literature on budget preparation and managerial performance has identified several factors that influence the relationship between the two. One of the key factors is manager participation in the budget preparation process. Research has shown that when managers are involved in the budget preparation process, they are more likely to be committed to achieving the targets set in the budget (Argenti, 2002). This is because manager participation in the budget preparation process provides a sense of ownership and accountability, which can motivate managers to work towards achieving the targets set in the budget.

Another factor that has been identified as influencing the relationship between budget preparation and managerial performance is communication. Effective communication is essential for ensuring that managers understand the budget and their roles in achieving the targets set in the budget (Kotter, 1990). Research has shown that when communication is effective, managers are more likely to be committed to achieving the targets set in the budget.

Finally, organizational commitment has also been identified as a factor that influences the relationship between budget preparation and managerial performance. Research has shown that when managers are committed to the organization, they are more likely to be motivated to achieve the targets set in the budget (Meyer & Allen, 1991).

Methodology

This study used a quantitative approach to investigate the effect of manager participation in the budget preparation process on managerial performance, with communication and commitment as moderating variables. The data used in this study was primary data, which was collected through a survey of 55 managers from all PDAMs in the North Sumatra Province. The questionnaire used in this study consisted of six items for manager participation variables, nine items for managerial performance variables, and twelve items for communication and fourteen items for organizational commitment.

Results

The results of this study showed that there was a significant influence between manager participation in the budget preparation process and managerial performance. This suggests that when managers are involved in the budget preparation process, they are more likely to be committed to achieving the targets set in the budget. However, the results also showed that the communication variable did not have a significant effect on managerial performance, even though there was participation in the budget preparation process. This suggests that while effective communication is essential for ensuring that managers understand the budget and their roles in achieving the targets set in the budget, it is not a sufficient condition for achieving managerial performance.

The results also showed that organizational commitment did not have a significant effect on managerial performance, even though there was participation in the budget preparation process. This suggests that while high levels of commitment are essential for achieving managerial performance, they are not a sufficient condition for achieving managerial performance.

Discussion

The results of this study highlight the importance of manager participation in the budget preparation process for achieving managerial performance. This suggests that organizations should prioritize manager participation in the budget preparation process to ensure that managers are committed to achieving the targets set in the budget. However, the results also suggest that effective communication and high levels of commitment are not sufficient conditions for achieving managerial performance.

This study contributes to the field of accounting by providing insights into the relationship between manager participation in the budget preparation process and managerial performance. The study also highlights the importance of considering the moderating effects of communication and commitment when investigating the relationship between budget preparation and managerial performance.

Conclusion

In conclusion, this study investigated the effect of manager participation in the budget preparation process on managerial performance, with communication and commitment as moderating variables. The results showed that there was a significant influence between manager participation in the budget preparation process and managerial performance. However, the results also showed that the communication variable and organizational commitment did not have a significant effect on managerial performance, even though there was participation in the budget preparation process. This study highlights the importance of manager participation in the budget preparation process for achieving managerial performance and suggests that organizations should prioritize manager participation in the budget preparation process to ensure that managers are committed to achieving the targets set in the budget.

Recommendations

Based on the results of this study, the following recommendations are made:

  1. Organizations should prioritize manager participation in the budget preparation process to ensure that managers are committed to achieving the targets set in the budget.
  2. Effective communication is essential for ensuring that managers understand the budget and their roles in achieving the targets set in the budget.
  3. High levels of commitment are essential for achieving managerial performance, but they are not a sufficient condition for achieving managerial performance.
  4. Organizations should consider the moderating effects of communication and commitment when investigating the relationship between budget preparation and managerial performance.

Limitations

This study has several limitations. One of the limitations is that the study only investigated the effect of manager participation in the budget preparation process on managerial performance, with communication and commitment as moderating variables. Future studies should investigate the effect of other factors on managerial performance, such as managerial competencies and available resources.

Another limitation of this study is that the study only used primary data, which may not be representative of all PDAMs in the North Sumatra Province. Future studies should use a larger sample size and collect data from multiple sources to increase the generalizability of the findings.

Future Research Directions

Future research should investigate the effect of other factors on managerial performance, such as managerial competencies and available resources. Future studies should also use a larger sample size and collect data from multiple sources to increase the generalizability of the findings.

In addition, future research should investigate the effect of manager participation in the budget preparation process on managerial performance in other contexts, such as private sector organizations. This will provide insights into the generalizability of the findings of this study and will contribute to the development of a more comprehensive understanding of the relationship between budget preparation and managerial performance.

References

Argenti, P. A. (2002). Corporate communication. McGraw-Hill.

Kotter, J. P. (1990). A force for change: How leadership differs from management. Free Press.

Meyer, J. P., & Allen, N. J. (1991). A three-component conceptualization of organizational commitment. Human Resource Management Review, 1(1), 61-89.
Q&A: The Effect of Participation in the Preparation of the Budget on Managerial Performance with Communication and Commitment as Moderating Variables in the North Sumatra Province PDAM

Q: What is the main focus of this study?

A: The main focus of this study is to investigate the effect of manager participation in the budget preparation process on managerial performance, with communication and commitment as moderating variables in the North Sumatra Province PDAM.

Q: What are the key findings of this study?

A: The key findings of this study are:

  1. There is a significant influence between manager participation in the budget preparation process and managerial performance.
  2. The communication variable does not have a significant effect on managerial performance, even though there is participation in the budget preparation process.
  3. Organizational commitment does not have a significant effect on managerial performance, even though there is participation in the budget preparation process.
  4. The combination of participation, communication, and organizational commitment does not affect managerial performance.

Q: What are the implications of these findings?

A: The implications of these findings are:

  1. Manager participation in the budget preparation process is essential for achieving managerial performance.
  2. Effective communication and high levels of commitment are not sufficient conditions for achieving managerial performance.
  3. Organizations should prioritize manager participation in the budget preparation process to ensure that managers are committed to achieving the targets set in the budget.

Q: What are the limitations of this study?

A: The limitations of this study are:

  1. The study only investigated the effect of manager participation in the budget preparation process on managerial performance, with communication and commitment as moderating variables.
  2. The study only used primary data, which may not be representative of all PDAMs in the North Sumatra Province.
  3. The study only used a sample size of 55 managers from all PDAMs in the North Sumatra Province.

Q: What are the recommendations of this study?

A: The recommendations of this study are:

  1. Organizations should prioritize manager participation in the budget preparation process to ensure that managers are committed to achieving the targets set in the budget.
  2. Effective communication is essential for ensuring that managers understand the budget and their roles in achieving the targets set in the budget.
  3. High levels of commitment are essential for achieving managerial performance, but they are not a sufficient condition for achieving managerial performance.
  4. Organizations should consider the moderating effects of communication and commitment when investigating the relationship between budget preparation and managerial performance.

Q: What are the future research directions of this study?

A: The future research directions of this study are:

  1. Investigating the effect of other factors on managerial performance, such as managerial competencies and available resources.
  2. Using a larger sample size and collecting data from multiple sources to increase the generalizability of the findings.
  3. Investigating the effect of manager participation in the budget preparation process on managerial performance in other contexts, such as private sector organizations.

Q: What are the practical implications of this study?

A: The practical implications of this study are:

  1. Organizations should prioritize manager participation in the budget preparation process to ensure that managers are committed to achieving the targets set in the budget.
  2. Effective communication and high levels of commitment are not sufficient conditions for achieving managerial performance.
  3. Organizations should consider the moderating effects of communication and commitment when investigating the relationship between budget preparation and managerial performance.

Q: What are the theoretical implications of this study?

A: The theoretical implications of this study are:

  1. The study contributes to the development of a more comprehensive understanding of the relationship between budget preparation and managerial performance.
  2. The study highlights the importance of considering the moderating effects of communication and commitment when investigating the relationship between budget preparation and managerial performance.
  3. The study provides insights into the role of manager participation in the budget preparation process in achieving managerial performance.