THE EFFECT OF PARTICIPATORY BUDGET ON PERFORMANCE WITH ORGANIZATIONAL CULTURE AND COMMITMENT AS MODERATOR VARIABLES AT PT PERKEBUNAN NUSANTARA XII (PERSERO)

Title: THE EFFECT OF PARTICIPATORY BUDGET ON PERFORMANCE WITH ORGANIZATIONAL CULTURE AND COMMITMENT AS MODERATOR VARIABLES AT PT PERKEBUNAN NUSANTARA XII (PERSERO)

Author: BAMBANG WIDJANARKO

Affiliations: Master of Accounting Study Program, Faculty of Economics and Business, Universitas Airlangga Surabaya

Publisher: Universitas Airlangga

Abstract

Researchers in the field of accounting have long sought to understand the influence of participatory budgeting on managerial performance and have experienced 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 Mclnness 1986).

Empirical evidence shows that there is an unclear influence between participatory budgeting on managerial performance. The inconsistency of research results between one another allows for the existence of other variables that influence participatory budgeting on managerial performance (Govindarajan 1986; Indriantoro and Supomo 1999). In these researches, participatory budgeting is the independent variable and managerial performance is the dependent variable, and a moderator variable is added which is intended to show how much the independent variable increases 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 research, two moderator variables were used, namely culture and commitment.

Atmosoeprapto (2000:73) states that a strong organizational culture or company culture will influence the view of a job to be more enjoyable. Therefore, it is necessary to maintain its existence so that all employees, starting from top management to the lowest level employees, have a strong commitment that is not only connected physically, but also emotionally to the company.

On the other hand, Festinger (1957) in Riyadi (1998) with cognitive dissonance theory states that employees who have higher commitment will correct mistakes or worry if their performance is low. To reduce these mistakes and feelings of worry, 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 research 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 moderator variable will further improve the performance of the Strategic Business Unit, (3) Participatory budgeting with Commitment as a moderator variable will further improve the performance of the Strategic Business Unit.

The population taken in this research was 34 strategic business unit managers with the following conditions: 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 health level of the strategic business unit and this in turn will become the basis for assessing the performance of the individual or manager of the strategic business unit concerned; 3. They are all managers one level below the Directors and own operational land.

The conclusion produced in this research is that there is an influence of participatory budgeting on the performance of strategic business units; the influence of participatory budgeting variables with organizational culture as a moderator variable can significantly improve the performance of strategic business units; and the influence between the participatory budgeting variable and the strategic business unit manager's commitment as a moderator variable can significantly improve the performance of the strategic business unit.

The suggestions that are useful for the company PTPN strategic business unit, as an effort to improve the performance of the strategic business unit and to achieve overall company targets, including the performance of the business unit managers themselves and their staff. Apart from that, to produce optimal performance of the strategic business unit and PTPN XII (Persero), the culture of PTPN Company work plans and 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 company culture and is supported by committed employees, this should not make the management of PTPN 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 at PTPN

In this research, performance is discussed only from the company's perspective, especially the performance of strategic business units. However, future research can be carried out by linking more specifically to the performance of individual strategic business unit managers by developing Key Performance Indicators which will be used as a basis for preparing management contracts in stages.

Keywords: Budget participation, organizational culture, commitment, performance and strategic business unit

Sources: http://repository.unair.ac.id/36140/