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7th Global Conference on Business & Economics ISBN : 978-0-9742114-9-4
Budget Participation and Job Performance of South Korean
Managers Mediated by Job Satisfaction and Job Relevant Information
Maria A. Leach-Lpez*
Assistant ProfessorAuburn University Montgomery
PO Box 244023
Montgomery, AL 36124-4023Phone: 334-244-3274
Fax: 334-244-3792
William W. StammerjohanAssociate ProfessorLouisiana Tech University
Ruston, LA
Phone: 318-257-3828Fax: 318-257-4253
Kyoo Sang Lee
Professor
Mokwon UniversityDeajeon, Korea
Telephone: 82-42-829-7732
Fax: [email protected]
June 8, 2007
October 13-14, 2007Rome, Italy
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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-Lpez 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-Lpez 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-Lpez, 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.
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
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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 that
use performance as the sole dependent variable (e.g., Nouri and Parker 1998; Shields et al. 2000;
Leach-Lpez et al. 2007) and avoid reliance on the assumption that satisfaction leads to
1For example, when budgets are used as a control mechanism, they require a more detailed procedure forinternational subsidiaries than for domestic operations. Also, the unique situation of each subsidiary may require a
highly individualized budgeting procedure.
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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
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Job Relevant Information
JRI
Job Satisfaction
SAT
Budget ParticipationPART
PerformancePERF
D
A
A
D
B
D
E
D
C
D
F
D
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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; OConnor 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
Brownells (1988) also supports LSMs expectation of a positive relationship between job relevant
information and satisfaction.
Path F: JRI PERF
Path F represents the final path in Krens (1992) model of an indirect relationship between
budget participation and performance running through job relevant information. LSMs
expectation of a positive relationship between job relevant information and performance is
supported by Krens 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 participation-
performance 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 participation-
performance 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 leadsto increased performance.
Path D, Path E, and Path C: PART JRI SAT PERF
Importance of Communication Hypothesis
Leach-Lpez 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 managers
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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 controlledcompanies 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 measures
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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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 managers 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-Lpez et al. 2007).
4 See Bommer et al. (1995) for a complete discussion of the implications of self-reported performance measures.
5We use the modified rating categories advocated by Weiss et al. (1967). The modified ratings anchor on notsatisfied 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.
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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 + e1iSATi = B*PARTi + E*JRIi + e2i (1)JRIi = D*PARTi + e3i
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 job-
related stress was inserted between standard tightness and job performance, and between the level of standard-basedincentives 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, asdocumented 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, p0.2317.
[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
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.
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[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, p0.0006 and p0.0004,
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), p0.0415, these three path model variables, job relevant information
(JRI), job satisfaction (SAT), and budget participation (PART), are not significantly correlated
with one another, p0.1972.
Hypotheses H1, H2, H3, H4, H5 Path Model Tests
Similar to the Leach-Lpez 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, p0.0538. Also similar to
LSMs 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
probability0.0489. Similar to LSMs 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 LSMs results, our combined and US controlled results
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
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between budget participation (PART) and performance (PERF) that runs through job relevant
information (JRI and job satisfaction (SAT) described by hypothesis H4, joint probabilty0.0221
and joint probabilty0.0292, 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-Lpez et al. (2007) (LSM), the overall information-
communication connection between budget participation and performance appears to be more
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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 first study we are
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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 subjects 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-Lpez 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
Sample
US Asian
Full % Controlled % Controlled %
Respondents: 71 54 17
Sex: Male 68 96% 51 94% 17 100%
Female 3 4% 3 6% 0 0%
Age: 24 or less 1 1% 1 2% 0 0%
25-29 1 1% 0 0% 1 6%
30-34 8 11% 5 9% 3 18%
35-39 25 35% 21 39% 4 24%40-49 33 46% 26 48% 7 41%
50-59 3 4% 1 2% 2 12%
60+ 0 0% 0 0% 0 0%
Education: Up to 9th grade 0 0% 0 0% 0 0%
10th to 12th grade 4 6% 4 7% 0 0%
Come college 52 73% 38 70% 14 82%
Post graduate 15 21% 12 22% 3 18%
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TABLE 2: Comparison of Sample Means
US Controlled
Sample
Asian Controlled
Sample t-statistic p-value
N 53-54 17
PERF 47.85 50.06 -0.88 0.3831
PART 30.72 28.47 1.02 0.3130
JRI 17.24 19.71 -1.33 0.2735
SAT 65.30 64.94 0.13 0.8997
FYR 9.40 9.80 0.02 0.9828
JYR 2.71 3.59 -1.21 0.2317
SEX 0.94 1.00 na na
SCH 16.15 16.41 -0.54 0.5929
AGE 5.37 5.35 0.07 0.9450
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).
FYR - Years with the company.
JYR - Years in current position.
SEX - Sex, where 1 equals male and 0 equals female.
SCH - Years of school.
AGE - Age reported in ranges,
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TABLE 3: Simple Correlations
Panel A - Full (Combined ) Sample N=71
PERF JRI SAT PART
PERF 1
JRI 0.54405 1
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TABLE 4: Path Analysis Results
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Sample Diff.
Full
US
Controlled
Asian
Controlled
US vs.
Asian
Path Names, Path Descriptions,
and Hypotheses NumbersN 70 53 17 70
df 61 44 8 52A PART PERF corr. 0.1750 0.2089 0.2243 -0.0154
H1 t-stat 1.62 1.54 1.81 0.03
p-value 0.0549 0.0658 0.0538 0.9726
B PART SAT corr. 0.3066 0.3339 0.1506 0.1833
t-stat 2.56 2.43 0.58 0.85
p-value 0.0065 0.0095 0.2890 0.3995
C SAT PERF corr. 0.3164 0.3193 0.4167 -0.0974
t-stat 3.06 2.45 3.53 -1.19
p-value 0.0017 0.0092 0.0038 0.2394
D PART JRI corr. 0.4716 0.5312 0.3290 0.2022
t-stat 4.44 4.52 1.39 0.74
p-value 0.0000 0.0000 0.1005 0.4650
E JRI SAT corr. 0.2504 0.2896 0.0811 0.2085
t-stat 2.09 2.11 0.31 1.69
p-value 0.0204 0.0202 0.3814 0.0972
F JRI PERF corr. 0.3357 0.2271 0.6102 -0.3831
t-stat 3.16 1.69 4.97 -2.38p-value 0.0012 0.0489 0.0005 0.0208
H2 PARTSATPERF joint prob. 0.0082 0.0186 0.2917
H3 PARTJRIPERF joint prob. 0.0013 0.0489 0.1009
H4 PARTJRISATPERF joint prob. 0.0221 0.0292 0.4457
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 inpath coefficients 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 .
FIGURE 2
Full Sample Path Model
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0.4716 0.2504(0.0000) (0.0204) 0.3357
D E F (0.0012)
0.3066 0.3164(0.0065) (0.0017)
B C
A
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
0.5312 0.2896
(0.0000) (0.0202) 0.2271D E F (0.0489)
0.3339 0.3193(0.0095) (0.0092)
B C
A
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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JRI
SAT
PART
PERF
JRI
SAT
PART
PERF
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FIGURE 4
Asian Controlled Sample Path Model
0.3290 0.0811
(0.1005) (0.3814) 0.6102D E F (0.0005)
0.1506 0.4167(0.2890) (0.0038)
B C
A
0.2243
(0.0538)
P-values are reported in parentheses and the path coefficients with p-values 0.05 are reported in
bold.
JRI
SAT
PART PERF