THE EFFECT OF PARTICIPATORY BUDGETING ON PERFORMANCE WITH ORGANIZATIONAL CULTURE AND COMMITMENT AS MODERATOR VARIABLES AT PT PERKEBUNAN NUSANTARA XII (PERSERO)
Amount: THE EFFECT OF PARTICIPATORY BUDGETING ON PERFORMANCE WITH ORGANIZATIONAL CULTURE AND COMMITMENT AS MODERATOR VARIABLES AT PT PERKEBUNAN NUSANTARA XII (PERSERO)
Authors: BAMBANG WIDJANARKO
Memberships: Master of Accounting Study Program, Faculty of Economics and Business, Universitas Airlangga Surabaya
Publisher: Airlangga University
Abstract
Researchers in the accounting field have long sought to understand the effect of participatory budgeting on managerial performance and have been subject to much debate. This debate attracted the interest of researchers to conduct further research on the topic (Argyris 1952; Milani 1975; Kenis 1979; Brownell 1981; Brownell and McInness 1986).
Empirical evidence shows that there is a lack of clarity about the effect of participatory budgeting on managerial performance. The inconsistency of research results between one another allows for other variables that affect participatory budgeting on managerial performance (Govindarajan 1986; Indriantoro and Supomo 1999). In these studies, participatory budgeting is the independent variable and managerial performance is the dependent variable, and a moderator variable is added in order to know how much the independent variable increases to the dependent variable. Murray (1990:105) adds that the moderator variable plays a role in influencing the level of relationship between the two variables. In this study, two moderating variables were used, namely culture and commitment.
Atmosoeprapto (2000:73) states that a strong organizational culture or corporate culture will affect the view of a job to be more enjoyable. Therefore, it is necessary to maintain its existence so that all employees, starting from the top management to the lowest level employees, have a strong commitment that is not only physically connected, but also emotionally to the company.
On the other hand, Festinger (1957) in Riyadi (1998) with cognitive dissonance theory states that employees who have a higher commitment will correct mistakes or worry if their performance is low. To reduce errors and feelings of concern, they voluntarily try to improve their performance (Calder and Ross, 1976; Hamner and Organ, 1978) in Riyadi (1998). On the other hand, this is not the case for employees who have low commitment.
The objectives to be achieved in this study are to determine: (1) The effect of participatory budgeting on the performance of the Strategic Business Unit, (2) Participatory budgeting with PTPN XII organizational culture as a moderating variable will further improve the performance of the Strategic Business Unit, (3) Participatory budgeting with commitment as a moderating variable will further improve the performance of the Strategic Business Unit.
The population taken in this study were 34 strategic business unit managers with the following provisions: 1. Each strategic business unit manager leads and manages a strategic business unit in the work area of PTPN XII (Persero); 2. Each unit manager is responsible for achieving the level of soundness of the strategic business unit and in turn will be the basis for evaluating the performance of the individual or the manager of the strategic business unit concerned; 3. They are all managers one level below the Board of Directors and have operational areas.
The conclusions generated in this study are the influence of participatory budgeting on the performance of strategic business units; the influence of participatory budgeting variables with organizational culture as a moderating variable can significantly improve the performance of strategic business units; and the influence between the participatory budgeting variable and the commitment of strategic business unit managers as a moderator variable can significantly improve the performance of the strategic business unit.
The suggestions that are useful for PTPN XII (Persero) companies related to the results of this study are participatory budgeting which is manifested as the involvement of business unit managers in the preparation of work plans and company budgets that need to be maintained and improved more openly in the sense of more involving many levels of management under managers strategic business unit, as an effort to improve the performance of the strategic business unit and to achieve the company's overall goals, including the performance of the business unit managers themselves and their staff. In addition, to produce optimal performance of strategic business units and PTPN XII (Persero), the culture of PTPN XII (Persero) and employee commitment, especially managers in all lines, must also be maintained for their existence and consistency and well maintained because of management's participation in the preparation work plans and company budgets or participatory budgeting supported by organizational culture and commitment have been proven to improve the performance of strategic business units.
Even though PTPN XII (Persero) already has a good corporate culture and is supported by committed employees, this should not make the management of PTPN XII (Persero) satisfied with such a situation. It must be realized that everything that has been built in the past will become obsolete if it is not updated. For this reason, PTPN XII (Persero) in the future must be able to build a superior organizational or business culture based on plant cultivation and develop employee commitment to PTPN XII (Persero) in facing increasingly turbulent changes so that they are able to compete and can realize the company's vision and mission.
In this study, performance is discussed only from the company's point of view, especially the performance of strategic business units. However, future research can be carried out by relating more specifically to the performance of the individual strategic business unit managers by developing Key Performance Indicators which will be used as the basis for drafting a tiered management contract.
Keywords: Budget participation, organizational culture, commitment, performance and strategic business unit
sources: http://repository.unair.ac.id/36140/
