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Factors of Budget Goal Commitment

Autor:   •  February 7, 2012  •  Essay  •  780 Words (4 Pages)  •  1,623 Views

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Subordinate’s budget goal commitment is used to determine the subordinate’s performance, and might be influenced by many factors as the business world today is complicated. From the study (Niels, Per Nikolaj and Carsten, 2001), we can clearly see that there are psychological factors and situation factor are influence the subordinate’s budget goal commitment.

Firstly, we are looking at the situation factors, in this paper (Niels, Per Nikolaj and Carten, 2011), which insulated that there the participation budgeting is can situation factors. Nuori and Parker (1998) point out that the participative budgeting given subordinates the opportunity to discuss the organization issues with superiors, in which an exchange of information and idea can help to solve problems and agree future action (Oppapers, n.d). This action will create the interest and job satisfaction in their career performance.

However, the budget goal commitment also might influence by the effectiveness of the participation budgetary. The fairness will affect the participation budgeting effectively (Adam and Fred, 2007). The fairness is positive related to budget goal commitment. Top management have to better understand the importance of budget participation in enhancing fairness that, in turn lead to budget goal commitment. The fairness of the resources and opportunity need to be given to all the subordinates to enhances for the effectiveness of the participative budget (Adam and Fred, 2007). As subordinates will perceive that the decision are based on the fair process, they should more likely to commit to goal because they either believe the decision outcome is in the line with their self-interest or because their compliance affirms their group membership (Westzel, 2002).

As Argyris’s study stated that ‘the human factor is important, if you treat a human being like a human being, you can use them better and more out of them’ (Hofstede, 1968). The Psychological factor: McCelland’s (1961) ‘Big three motivation’ will affect the subordinate’s performance to goal commitment (Niels S, Per Nikolaj B and Carsten SP, 2001). These three core motivational dispositions considered are usually expressed as need: need of achievement (nAch), need of power (nPow) and need of affiliation (nAff).

Subordinate with high nAch will have the desired tendency to do things as well as possible, they will create the goal commitment as they are wish to achieve the budget goal

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