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Budget Participation and Job Performance of South Korean
Managers Mediated by Job Satisfaction and Job Relevant Information
Maria A. Leach-López*
Assistant Professor
Auburn University Montgomery
PO Box 244023
Montgomery, AL 36124-4023
Phone: 334-244-3274
Fax: 334-244-3792
mleach@mail.aum.edu
William W. Stammerjohan
Associate Professor
Louisiana Tech University
Ruston, LA
Phone: 318-257-3828
Fax: 318-257-4253
Wstammer@cab.latech.edu
Kyoo Sang Lee
Professor
Mokwon University
Deajeon, Korea
Telephone: 82-42-829-7732
Fax: 82-42-823-2707
kslee@mokwon.ac.kr
June 8, 2007
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Budget Participation and Job Performance of South Korean
Managers Mediated by Job Satisfaction and Job Relevant Information
ABSTRACT
This study extends the stream of participative budgeting literature to South Korean
managers. This study employs the path model introduced to this literature by Leach-López et al.
(2007) to examine and compare the budget participation-performance relationship for South
Korean managers working either for US controlled or Asian controlled companies in South
Korea. The Leach-López et al. path model allows the examination of the direct effects of budget
participation on performance and the indirect effects between budget participation and
performance that run through job satisfaction and job relevant information.
The primary findings of this study are that while there are strong associations between
budget participation and performance for both samples of managers, the causal mechanisms
connecting budget participation to performance are different among these two groups. The
information-communication connection between budget participation and performance is
stronger among the South Korean managers working for US controlled companies.
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Budget Participation and Job Performance of South Korean
Managers Mediated by Job Satisfaction and Job Relevant Information
INTRODUCTION
The relationship between budget participation and performance has a long history in the
managerial accounting literature (e.g., Argyris 1952; Brownell 1981, 1982a, 1983; Frucot and
Shearon 1991; Kren 1992; Chow et al. 1991, 1994, 1996, 1999). Using meta-analysis, Greenberg
et al. (1994) summarized the empirical literature up to that time and found that, on average, the
positive correlations between participation and performance had been supported by both survey
and experimental studies. We contribute to this literature by examining the relationship between
budget participation and performance among Korean managers working for either US controlled
or Asian controlled companies.
We specifically extend the work of Leach-López, Stammerjohan, and McNair (2007)
(hereafter LSM) by applying the LSM theories and models to a sample of Korean managers. Our
study is similar to LSM in that we have host country managers working for US controlled
companies in a foreign country. Our study differs from LSM in that the setting is Korea vs.
Mexico and that the referent group in our study is Korean managers working for Asian (host
culture) controlled companies as opposed to the referent group in LSM which was US managers
working within the US. Our results are similar to LSM in that we find the role of job relevant
information is more important in the budget participation-performance link among the Korean
managers working for US controlled companies than it is among their peers. Our results differ
from LSM in that we also find that job satisfaction plays a significant mediating role between
budget participation and performance among our Korean managers working for US controlled
companies.
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Hofstede (1999) asserts that management systems in the 21st Century will not be basically
different from management systems in the 20th Century. However, he expects that successful
multinational companies will consider culture when trying to adapt their management control
systems in foreign settings. Hofstede believes that research is needed to determine the
transferability of management control systems from one country to another.
Schoenfeld (1994) examines managerial accounting in multinational companies. He
argues that, in spite of its importance for decision-making, management accounting of foreign
operations is a neglected subject. While foreign operations may have been seen as too small to
merit much attention, and while multinationals may have believed that domestic managerial
accounting procedures could be applied to foreign operations without modification, these factors
may no longer apply. The sheer expansion of global operations and the documented unique
needs in specific situations leads Schoenfeld to conclude that managing foreign operations now
represents a major challenge to managers and accountants.1
THEORY AND HYPOTHESIS-DEVELOPMENT
Our review of the pertinent literature, our theory, and our hypothesis-development, are
presented in two sections. We first review the literature and second we develop our hypotheses
regarding the relationship between budget participation and performance.
Budget Participation and Performance
While prior research has commonly measured the relationships between budget
participation and performance, and between budget participation and job satisfaction separately
(e.g., Brownell 1981, 1982b, 1983; Frucot and Shearon 1991), we follow several recent studies
1
For example, when budgets are used as a control mechanism, they require a more detailed procedure for
international subsidiaries than for domestic operations. Also, the unique situation of each subsidiary may require a
highly individualized budgeting procedure.
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that use performance as the sole dependent variable (e.g., Nouri and Parker 1998; Shields et al.
2000; Leach-López et al. 2007) and avoid reliance on the assumption that satisfaction leads to
performance by using the LSM model that includes both job satisfaction and job relevant
information as mediating variables.
The choice of variables and relationships in the LSM model are grounded in the
“antecedents” findings of Shields and Shields (1998) and in the arguments made. Shields and
Shields document in Appendix A, Table A1 (71-75) that among the 47 studies they examined, 25
listed motivation (performance), 23 listed information sharing, and 14 listed satisfaction as the
assumed reasons that participative budgeting exists. Shields and Shields provide motivation for
inclusion of satisfaction as a mediating variable by noting that most of the studies that listed
satisfaction as an antecedent used motivation-performance as the dependent variable.
The LSM path model includes one independent variable, budget participation (PART);
one dependent variable, performance (PERF); and two mediating variables, job satisfaction
(SAT) and job relevant information (JRI). The six theorized relationships between these
variables are described as Paths A-F in Figure1 and, as argued in LSM, the motivation behind the
proposed relationship between each pair of variables is presented below.
FIGURE 1
LSM Path Model
Job Relevant Information
JRI
D
B
D
Budget Participation
PART
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D
Job Satisfaction
SAT
A
A
D
5
F
D
C
D
Performance
PERF
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Path A: PART → PERF
Shields and Shields (1998) cite three studies that found direct positive relationships
between budget participation and performance (Milani 1975; Kenis 1979; Brownell and McInnes
1986). In a path analysis study, Chenhall and Brownell (1988) failed to find evidence of a direct
effect. Frucot and Shearon (1991) find mixed results on this relationship. LSM include Path A in
their model to capture the direct effect and to provide comparability with prior research.
Path B: PART → SAT
Shields and Shields (1998) cite Hofstede (1967) as a study that found a positive
relationship between budget participation and satisfaction. Chenhall and Brownell (1988) find
both a significant direct relationship between budget participation and satisfaction and a
significant indirect relationship between budget participation and satisfaction running through
role ambiguity. Frucot and Shearon (1991) find a significant positive relationship between
budget participation and satisfaction over parts of the sample. Lau and Tan (2003) find a
significant path coefficient linking budget participation and job satisfaction among Singaporean
managers.
Path C: SAT → PERF
LSM include this path to better understand the complex relationships between
participation and performance and to model a relationship that is commonly assumed, but not
tested, in the existing budget participation-performance literature.2
2
See Luft and Shields (2003, 209-211) Appendix A for a comprehensive mapping of numerous budgeting
relationships modeled at the individual employee (manager) level in the extant literature. Note further that among
the 42 studies mapped in Appendix A, 21 include performance as a dependent variable, 11 include satisfaction as a
dependent variable, and that none model the relationship between satisfaction and performance modeled by our Path
C.
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Path D: PART → JRI
Kren (1992) introduced a path model with job relevant information as an intervening
variable between budget participation and performance. Kren theorized and found evidence that
increased budget participation leads to increased job relevant information and that increased job
relevant information leads to increased performance. Many other studies have theorized and/or
found evidence of either a positive relationship between budget participation and information or
a negative relationship between participation and role ambiguity (e.g., Chenhall and Brownell
1988; Brownell and Dunk 1991; O’Connor 1995; Hassel and Cunningham 1996; Magner et al.
1996; Covaleski et al. 2003; Lau and Tan 2003).
Path E: JRI → SAT
Lau and Tan (2003) theorize and find a positive relationship between job relevant
information and satisfaction. Insofar as job relevant information reduces role ambiguity, the
negative relationship between role ambiguity and satisfaction theorized and found by Chenhall
and Brownell’s (1988) also supports LSM’s expectation of a positive relationship between job
relevant information and satisfaction.
Path F: JRI → PERF
Path F represents the final path in Kren’s (1992) model of an indirect relationship
between budget participation and performance running through job relevant information. LSM’s
expectation of a positive relationship between job relevant information and performance is
supported by Kren’s findings and by the logic attributed to the psychology-based literature by
Covaleski et al. (2003, 37), “Participation in this sense can improve performance by providing a
forum for the superior to communicate information to subordinates…”
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Budget Participation-Performance Hypotheses
Hypothesis, H1 is a simple hypothesis that predicts a direct relationship between budget
participation and performance modeled by Path A. Our remaining budget participationperformance hypotheses are joint hypotheses of the relationships modeled by Paths B-F. Support
for hypotheses H2-H4 requires significance of each path included in the respective hypothesis.
Hypothesis H3 represents the joint hypothesis proposed by Kren (1992). Hypotheses H2 and H4
include job satisfaction as a second mediating variable. The four formal budget participationperformance hypotheses stated in the alternative form are:
H1:
Increased budget participation leads directly to increased performance.
Path A: PART → PERF
H2:
Increased budget participation leads to increased job satisfaction and increased job
satisfaction leads to increased performance.
Path B and Path C: PART → SAT → PERF
H3:
Increased budget participation leads to increased job relevant information and increased
job relevant information leads to increased performance.
Path D and Path F: PART → JRI → PERF
H4:
Increased budget participation leads to increased job relevant information, increased job
relevant information leads to increased job satisfaction, and increased job satisfaction
leads to increased performance.
Path D, Path E, and Path C: PART → JRI → SAT → PERF
Importance of Communication Hypothesis
Leach-López et al. (2007), LSM, find that job relevant information (JRI) played a much
more important role in explaining the overall relationship between participative budgeting and
performance among their Mexican managers working for US controlled companies in Mexico
than it did among US managers work for US owned companies in the US. Based on these
findings we expect job relevant information (JRI) to play a more significant role in explaining
the overall relationship between participative budgeting and performance among our Korean
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managers working for US controlled companies in Korea than among our Korean managers
working for Asian controlled companies.
H5:
The strength of the joint relationship modeled by hypothesis H3, Path D and Path F:
PART → JRI → PERF, will be stronger among Korean managers working for US
controlled companies in Korea than among Korean managers working for Asian
controlled companies.
RESEARCH DESIGN
Data for this study were collected by having each mid-level manager complete a survey
instrument written in Korean.3 Hypotheses H1-H4 (budget participation to performance) are
tested by estimating the models described below.
Path Model Variables
The level of budget participation (PART) is measured with a six-item scale developed by
Milani (1975). This measure sums each item score measured with a seven-point Likert-type
scale. This scale has been widely used in participative budget research (e.g., Brownell 1982c,
1983; Chenhall and Brownell 1988; Mia 1989; Frucot and Shearon 1991; Nouri and Parker 1998;
Tsui 2001; Lau and Tan 2003; Hassel and Cunningham 2004). This scale has consistently
produced reliable Cronbach (1951) alpha coefficients from 0.71 (Chenhall and Brownell 1988)
to 0.91 (Mia 1989).
Performance (PERF) is measured with an eight-dimension scale developed by Mahoney
et al. (1963). The Mahoney et al. scale measures eight performance dimensions: planning,
investigating, coordinating, evaluating, supervising, staffing, negotiating, and representing.
PERF is the sum of these eight individual measures. The appropriateness of using self-reported
3
Two procedures were performed to insure the equivalency of the English and Korean versions of our instrument.
First, two individuals who both were born in Korea, residing in Korea, and both highly proficient in English and
Korean prepared translations of the English version into Korean. The few differences were then corrected as needed.
Second, following the method suggested by Hui and Triandis (1985), two subjects answered both the English and
Korean versions. The answers were consistent and indicated no need for further changes in the instrument.
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measures of performance and the reliability of the Mahoney et al. scale are well documented
(Heneman 1974). This scale has been widely used in participative budgeting research (e.g.,
Brownell 1982b, 1983; Brownell and Hirst 1986; Brownell and McInnes 1986; Frucot and
Shearon 1991; Tsui 2001). Self-reported performance is also used in other recent studies. Nouri
and Parker (1998) employ a self reported measure of performance adapted from Govindarajan
and Gupta (1985) and Shields et al. (2000) develop their own self-reported measure of
performance.4
The level of job satisfaction (SAT) is measured with the short-form of the Minnesota
Satisfaction Questionnaire (MSQ) (Weiss et al. 1967). The short-form version of the MSQ has
been supported for its reliability and validity (Weiss et al. 1967), and has been used extensively
in both applied psychology (e.g., Pulakos and Schmitt 1983; Butler 1983) and managerial
accounting research (e.g., Brownell 1981, 1982b, 1982c; Harrison 1992, 1993; Lau and Tan
2003).5
The level of job relevant information (JRI) is measured with a scale developed by Kren
(1992). The objective of this variable is to measure the manager’s perception of the availability
of information for effective job related decisions. JRI consists of the sum of three questions
answered on a scale of one to five, with anchors of “strongly disagree” and “strongly agree.”
Kren documented the validity of his scale that continues to be used in the management
accounting literature (e.g., Lau and Tan 2003; Leach-López et al. 2007).
4
See Bommer et al. (1995) for a complete discussion of the implications of self-reported performance measures.
We use the modified rating categories advocated by Weiss et al. (1967). The modified ratings anchor on “not
satisfied” and “extremely satisfied.” This modification overcomes the “ceiling effect” of response means located
close to the maximum possible score when the categories are anchored on “very dissatisfied” and “very satisfied,”
and centered on “neither satisfied nor dissatisfied.”
5
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LSM Path Model
While multiple regression is an appropriate tool for measuring the incremental effects of
two or more independent variables on a single dependent variable, multiple regression does not
capture the phenomenon where the correlation between an explanatory variable and the
dependent variable flows through one or more mediating variables. Luft and Shields (2003, 191)
provide a clear explanation of why an additive model (multiple regression) would be
inappropriate for our analysis.
The LSM path model captures both the direct and indirect effects of budget participation
on performance by including budget participation as the sole independent variable, performance
as the sole dependent variable, and satisfaction and job relevant information as mediating
variables.6 The path coefficients are estimated by solving the set of simultaneous equations
represented by model (1).
PERFi = A*PARTi + C*SATi + F*JRIi + e1i
SATi
= B*PARTi + E*JRIi + e2i
JRIi
= D*PARTi + e3i
(1)
where
PERF is performance measured using the Mahoney et al. (1963) eight-item scale;
6
Other studies have also found significant mediating variables between participative standard setting and job
performance (e.g., Nouri and Parker 1998; Shields et al. 2000). Nouri and Parker found that the paths between
budget participation and performance that ran through budget adequacy and organizational commitment were both
significant. Shields et al. found that the paths between participative standard setting and performance that flow
through standard tightness and the level of standard-based incentives are only significant when the level of jobrelated stress was inserted between standard tightness and job performance, and between the level of standard-based
incentives and job performance. In the interest of a parsimonious model we restrict our mediating variables to the
two most common variables found in the extant literature, job relevant information and job satisfaction, as
documented by Shields and Shields (1998).
While our path model falls into the “causes and effects of budgeting at the individual level” described by the map in
Appendix A of Luft and Shields (2003, 209), our path model is not fully described by any of the specific maps in
their appendix. While some of the studies reviewed by Luft and Shields included job relevant information as an
mediating variable, job satisfaction was only included as a dependant variable.
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PART is budget participation measured as the sum of the six-item scale developed by
Milani (1975);
SAT
is job satisfaction measured using a modified form of the Minnesota Satisfaction
Questionnaire (Weiss et al. 1967); and
JRI
is job relevant information measured as the sum of the three-item scale developed
by Kren (1992).
The estimated path coefficients A-F are used to test hypotheses H1-H4. Differences in
the univariate strength of the Path D and Path F coefficients provide support for hypothesis H3.
The difference between the relative strength of the joint Path D-Path F for managers working for
the US controlled vs. the Asian controlled companies are used to test hypothesis H5.
SAMPLE AND SUMMARY STATISTICS
Sample
The sample includes mid-level Korean managers working for manufacturing companies
located in South Korea that are subsidiaries of US parent companies and mid-level Korean
managers working for companies located in South Korea owned by Korean companies or by
Korean/Japanese joint ventures. Each manager completed a survey instrument written in Korean.
The responses were obtained by contacting one manager from each of 60 different companies
with a US parent and one manager from each of 20 different companies with either Korean or
joint Korean/Japanese ownership. The questionnaires were both distributed and returned by mail.
The final sample included 54 managers working for companies with a US parent (the US
controlled sample) and 17 managers working for Korean companies or Korean/Japanese joint
ventures (the Asian controlled sample).7
7
The response rates are quite high, 90% (54/60) for the US controlled sample, and 85% (17/20) for the Asian
controlled sample.
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Demographics
Table 1 provides summary demographics and Table 2 provides means and a test of means
between the managers (subjects) working for either US controlled or Asian controlled
companies. As can be seen in Table 1, the vast majority of our subjects are between 30 and 49
years of age, are predominately male, and that the majority of our subjects have at least attended
college. The tests of differences in mean responses reported in Table 2 indicate that the two
samples do not vary significantly over any of the path model or demographic variables,
p≥0.2317.
[Please insert Tables 1 and 2 about here.]
BUDGET PARTICIPATION-PERFORMANCE RESULTS
The simple correlations between the four path variables, PART, JRI, SAT, and PERF,
measured over the full (combined), US controlled, and Asian controlled samples are reported in
Panels A-C of Table 3. The estimated path coefficients are presented in Table 4 for our two
samples. The path model results are also reported graphically in Figures 2, 3 and 4. The path
model coefficients are estimated by solving the system of equations in model (1) using the
CALIS procedure (Covariance Analysis of Linear Structural Equations) provided by SAS (SAS
Institute Inc. 1990, 292-365).
The simple correlations reported in Table 3 aid in our basic understanding of the
interrelationships among our path variables. The path coefficients provide our tests of hypotheses
H1-H4, the simple and complex participation-performance relationships. The joint hypotheses
(H2-H4) p-values are based on the joint probabilities of the individual path coefficients. The
correlations in Table 3, path coefficients and differences in path coefficients in Table 4, and the
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path coefficients in Figures 2, 3, and 4 with p-values ≤0.05 are reported in bold. The hypotheses
H2-H4 joint p-values are reported at the bottom of Table 4.
[Please insert Tables 3, 4 and Figures 2, 3, and 4 about here.]
Simple Correlations
As reported in Table 3, Panels A and B, all four path variables, performance (PERF), job
relevant information (JRI), job satisfaction (SAT), and budget participation (PART), are highly
correlated among our full (combined) and US controlled samples, p≤0.0006 and p≤0.0004,
respectively. While, as reported in Table 3, Panel C, performance (PERF) is highly correlated
with the other three path model variables, job relevant information (JRI), job satisfaction (SAT),
and budget participation (PART), p≤0.0415, these three path model variables, job relevant
information (JRI), job satisfaction (SAT), and budget participation (PART), are not significantly
correlated with one another, p≥0.1972.
Hypotheses H1, H2, H3, H4, H5 Path Model Tests
Similar to the Leach-López et al. (2007) (LSM) Mexican manager results, the direct path
between budget participation (PART) and performance (PERF) modeled by Path A and
described by hypothesis H1 is not fully supported by any of our Korean samples, p≥0.0538. Also
similar to LSM’s Mexican manager results, the indirect relationship between budget participation
(PART) and performance (PERF) running through job relevant information (JRI) described by
hypothesis H3 is fully supported by our full (combined) sample and US controlled sample, joint
probability≤0.0489. Similar to LSM’s US manager results, the indirect relationship between
budget participation (PART) and performance (PERF) running through job relevant information
(JRI) described by hypothesis H3 is not supported by our Asian controlled sample, joint
probability=0.1009. In contrast to any of LSM’s results, our combined and US controlled results
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support both the relationship between budget participation (PART) and performance (PERF) that
runs through job satisfaction (SAT) described by hypothesis H2 and the more complex
relationship between budget participation (PART) and performance (PERF) that runs through job
relevant information (JRI and job satisfaction (SAT) described by hypothesis H4, joint
probabilty≤0.0221 and joint probabilty≤0.0292, respectively.
The hypothesis H5 results regarding our prediction that the information aspect of the
budget participation process would play a stronger role among the Korean manager working for
US controlled companies as compared to the Korean manager working for Asian controlled
companies are mixed. While, as reported in the US vs. Asian column of Table 4, an incremental
change in the level of job relevant information (JRI) has a significantly larger impact on
performance among our Korean managers working for Asian controlled companies, p=0.0208,
an incremental change in the level of participation (PART) has a smaller impact on the level job
relevant information (JRI) among the Asian controlled sample. While the univariate difference in
the participation (PART) to job relevant information (JRI) is not significantly different between
the two samples, p=0.4650, the overall effect of the joint relationships connecting budget
participation (PART) to performance (PERF) through job relevant information (JRI) described
by hypothesis H3 is significant among the US controlled sample and not significant among the
Asian controlled sample.
CONCLUSIONS, LIMITATIONS, AND FUTURE RESEARCH
The primary findings of this study are that while there are strong associations between
budget participation and performance among all of our South Korean managers, the causal
mechanisms connecting budget participation with performance are slightly different for our two
samples. Similar to the finding of Leach-López et al. (2007) (LSM), the overall information-
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communication connection between budget participation and performance appears to be more
important for the Korean managers working for US controlled companies. While our findings
corroborate the findings of LSM that the information-communication aspect of budget
participation may become more important as the level of difficulty that foreign managers face
when communicating with their US parent companies, becomes larger, our findings also
substantiate the subtle differences that may exist in each location. While LSM did not find that
job satisfaction played a significant role in the connection between budget participation and
performance among their Mexican managers working for US controlled companies in Mexico,
our results indicate that job satisfaction plays a significant role in the connection between budget
participation and performance among our Korean managers working for US controlled
companies in Korea.
Our study suffers from three common limitations found in all cross-sectional survey
research: (1) the lack of temporal precedence between the independent and dependent variables;
(2) any limitations imbedded in the scales used to measure our variables; and, (3) the
generalizability of our samples. While the lack of temporal precedence between budget
participation, job relevant information, job satisfaction, and performance precludes formal tests
of causality, and while we cannot say that better performers are not provided more job relevant
information and allowed greater participation, the primary implications of our findings are
largely unaffected by the direction of these relationships. Our finding that job relevant
information plays a role among foreign managers working for US controlled companies offers
insights to US multinationals whether the process starts with participation or performance. While
our scales may contain their own limitations, we employ scales that have been well tested.
Finally, while our samples may not fully represent all South Korean managers, our study is the
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first study we are aware of that allows a comparison of South Korean managers who work for
either US controlled or Asian controlled companies.
We also acknowledge the potential limitation of using self-reported measures of budget
participation and performance. Locke et al. (1997) define these single-source measures as the
percept-percept method. While the findings of both Greenberg et al. (1994) and Locke et al.
(1997) suggest that the single source method may produce higher correlations than multi-source
methods, both Locke et al. and Greenberg et al. find that the positive correlations persist in the
multi-source studies. Self-reported levels of participation may be more relevant than external
measures of participation because it should be the subject’s perception of budget participation
that influences behavior. While external measures of performance have some documented
benefits, self-reported measures of performance remain a common practice in the literature (e.g.,
Nouri and Parker 1998; Shields et al. 2000; Leach-López et al. 2007).
Even with the enumerated limitations, the findings of this study should have important
implications for US companies employing US management techniques in their foreign
operations. The findings of this study also suggest several avenues for future research. While the
information provided by this study has implications for US multinational companies operating in
South Korea, similar research may be warranted across a variety of locations. Further research is
needed to determine whether the findings of this study are driven by the uniqueness of the
Korean managers in our study, managers who have “self-selected” to work for US controlled
companies; or whether the information-communication aspect of budget participation may prove
to be useful in other settings where communication difficulty is high.
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TABLE 1: Demographics
Full
Respondents:
%
71
Sample
US
Controlled
%
54
Asian
Controlled
%
17
Sex:
Male
Female
68
3
96%
4%
51
3
94%
6%
17
0
100%
0%
Age:
24 or less
25-29
30-34
35-39
40-49
50-59
60+
1
1
8
25
33
3
0
1%
1%
11%
35%
46%
4%
0%
1
0
5
21
26
1
0
2%
0%
9%
39%
48%
2%
0%
0
1
3
4
7
2
0
0%
6%
18%
24%
41%
12%
0%
Education:
Up to 9th grade
0
0%
0
0%
0
0%
4
52
15
6%
73%
21%
4
38
12
7%
70%
22%
0
14
3
0%
82%
18%
th
th
10 to 12 grade
Come college
Post graduate
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TABLE 2: Comparison of Sample Means
N
PERF
PART
JRI
SAT
FYR
JYR
SEX
SCH
AGE
PERF
PART
JRI
US Controlled
Asian Controlled
Sample
Sample
t-statistic
p-value
53-54
17
47.85
50.06
-0.88
0.3831
30.72
28.47
1.02
0.3130
17.24
19.71
-1.33
0.2735
65.30
64.94
0.13
0.8997
9.40
9.80
0.02
0.9828
2.71
3.59
-1.21
0.2317
0.94
1.00
na
na
16.15
16.41
-0.54
0.5929
5.37
5.35
0.07
0.9450
- Performance measured using the Mahoney et al. (1963) eight-item scale.
- Budget participation measured as the sum of the six-item scale developed by Milani
(1975).
- Job relevant information measured as the sum of the three-item scale developed by
Kren (1992).
SAT
- Job satisfaction measured using a modified form of the Minnesota Satisfaction
Questionnaire (Weiss et al. 1967).
FYR
JYR
SEX
SCH
AGE
-
Years with the company.
Years in current position.
Sex, where 1 equals male and 0 equals female.
Years of school.
Age reported in ranges, <20=1, 20-24=2, 25-29=3, 30-34=4, 35-39=5, 40-49=6, 5059=7, and ≥60=8.
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TABLE 3: Simple Correlations
Panel A - Full (Combined ) Sample N=71
PERF
PERF
1
JRI
JRI
0.54405
(<0.0001)
SAT
0.52559
(<0.0001)
PART
0.46768
(<0.0001)
Panel B - US Controlled Sample N=54
PERF
PERF
1
PART
1
1
0.39642
(0.0006)
0.47159
(<0.0001)
0.42467
(0.0002)
1
JRI
SAT
PART
JRI
0.48880
(0.0002)
SAT
0.53044
(<0.0001)
PART
0.48528
(0.0002)
Panel C - Asian Controlled Sample N=17
PERF
PERF
1
SAT
1
1
0.46874
(0.0004)
0.53125
(<0.0001)
0.48774
(0.0002)
1
JRI
SAT
PART
JRI
1
0.73842
(0.0007)
SAT
0.13065
1
0.53617
(0.0265)
(0.6172)
PART
0.32903
0.17728
1
0.49893
(0.0415)
(0.1972)
(0.4961)
The correlations with p-values ≤0.05 are reported in bold
PERF
- Performance measured using the Mahoney et al. (1963) eight-item scale.
PART
- Budget participation measured as the sum of the six-item scale developed by
Milani (1975).
JRI
- Job relevant information measured as the sum of the three-item scale developed
by Kren (1992).
SAT
- Job satisfaction measured using a modified form of the Minnesota Satisfaction
Questionnaire (Weiss et al. 1967).
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TABLE 4: Path Analysis Results
Sample
Path Names, Path Descriptions,
and Hypotheses Numbers
Diff.
N
df
corr.
t-stat
p-value
Full
70
61
0.1750
1.62
0.0549
US
Controlled
53
44
0.2089
1.54
0.0658
Asian
Controlled
17
8
0.2243
1.81
0.0538
US vs.
Asian
70
52
-0.0154
0.03
0.9726
A
H1
PART → PERF
B
PART → SAT
corr.
t-stat
p-value
0.3066
2.56
0.0065
0.3339
2.43
0.0095
0.1506
0.58
0.2890
0.1833
0.85
0.3995
C
SAT → PERF
corr.
t-stat
p-value
0.3164
3.06
0.0017
0.3193
2.45
0.0092
0.4167
3.53
0.0038
-0.0974
-1.19
0.2394
D
PART → JRI
corr.
t-stat
p-value
0.4716
4.44
0.0000
0.5312
4.52
0.0000
0.3290
1.39
0.1005
0.2022
0.74
0.4650
E
JRI → SAT
corr.
t-stat
p-value
0.2504
2.09
0.0204
0.2896
2.11
0.0202
0.0811
0.31
0.3814
0.2085
1.69
0.0972
F
JRI → PERF
0.3357
3.16
0.0012
0.0082
0.0013
0.0221
0.2271
1.69
0.0489
0.0186
0.0489
0.0292
0.6102
4.97
0.0005
0.2917
0.1009
0.4457
-0.3831
-2.38
0.0208
H2
H3
H4
corr.
t-stat
p-value
PART→SAT→PERF
joint prob.
PART→JRI→PERF
joint prob.
PART→JRI→SAT→PERF joint prob.
The path coefficient p-values are based on one sided tests and the difference p-values are based on two-sided
test. The joint hypotheses p-values are based on joint probabilities. The path coefficients and differences in
path coefficients with p-values ≤0.05 are reported in bold
PERF
PART
JRI
-
SAT
-
Performance measured using the Mahoney et al. (1963) eight-item scale.
Budget participation measured as the sum of the six-item scale developed by Milani (1975).
Job relevant information measured as the sum of the three-item scale developed by Kren
(1992).
Job satisfaction measured using a modified form of the Minnesota Satisfaction Questionnaire
(Weiss et al. 1967).
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7th Global Conference on Business & Economics
ISBN : 978-0-9742114-9-7
FIGURE 2
Full Sample — Path Model
JRI
0.4716
(0.0000)
D
0.2504
(0.0204)
E
F
0.3357
(0.0012)
SAT
0.3066
(0.0065)
B
0.3164
(0.0017)
C
A
PART
PERF
0.1750
(0.0549)
P-values are reported in parentheses and the path coefficients with p-values ≤0.05 are reported in
bold.
FIGURE 3
US Controlled Sample — Path Model
JRI
0.5312
(0.0000)
D
0.2896
(0.0202)
E
F
0.2271
(0.0489)
SAT
0.3339
(0.0095)
B
PART
0.3193
(0.0092)
C
A
PERF
0.2089
(0.0658)
P-values are reported in parentheses and the path coefficients with p-values ≤0.05 are reported in
bold.
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7th Global Conference on Business & Economics
ISBN : 978-0-9742114-9-7
FIGURE 4
Asian Controlled Sample — Path Model
JRI
0.3290
(0.1005)
D
0.0811
(0.3814)
E
F
0.6102
(0.0005)
SAT
0.1506
(0.2890)
B
PART
0.4167
(0.0038)
C
A
PERF
0.2243
(0.0538)
P-values are reported in parentheses and the path coefficients with p-values ≤0.05 are reported in
bold.
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