Date of Award

1-1-1999

Degree Type

Thesis

Degree Name

Master of Business

Faculty

Faculty of Business and Public Management

First Advisor

Dr. Chong Man Lau

Abstract

Results of early studies (eg. Hopwood, 1972; Otley, 1978) on the effects of supervisory styles on subordinates’ job related tension have been contradictory. Subsequent studies using the contingency model to resolve these conflicting results have identified budgetary participation (Brownell, 1982a) and trust (Ross, 1994) as important moderating variables. With respect to participation, a number of prior studies found that a compatible combination of high budget emphasis and high participation was associated with better behavioural outcomes (eg. lower job related tension), than other combinations of budget emphasis and participation. Yet there has been relatively little research to investigate why this particular combination of budget emphasis and participation is associated with better behavioural outcomes. This thesis therefore investigates a number of important issues. First, it investigates whether different combinations of budget emphasis and participation affect subordinates' propensity to create slack and job related tension differently. Second, it examines whether a high budget emphasis-high participation combination results in lower subordinates' propensity to create slack and lower job related tension than a low budget emphasis-high participation combination. Third, it investigates the reasons why a high budget emphasis-high participation combination leads to lower propensity to create slack and lower job related tension. The interaction between budget emphasis and participation was dealt with by testing a model on supervisory styles in a high participatory environment. Norway was hypothesised to have a high participatory environment because of its high power distance culture and its highly centralised and formalised industrial relations systems which emphasise democratic work environment. Moreover, its highly homogeneous population and society are likely to result in a small diversity within its national culture, which in turn, leads to a smaller range of participation. Hence participation in Norway is expected to be not only high, but also widespread. This means that a high budget emphasis situation in Norway is similar to a high budget emphasis and high participation combination, whilst a low budget emphasis situation in Norway is similar to a low budget emphasis-high participation combination. This allows a high budget emphasis-high participation (Norway) situation to be compared with a low budget emphasis-high participation (Norway) situation. Consequently, a high budget emphasis situation in Norway, which is similar to a high budget emphasis and high participation situation, is therefore expected to be associated with lower job related tension than a low budget emphasis in Norway. In order to investigate the reason why a high budget emphasis-high participation combination promotes lower propensity to create slack and job related tension, path analytical models, which investigate the intervening effects of participation, trust and organisational commitment on the relationship between budget emphasis and propensity to create slack/job related tension, were developed. Testing these models in Norway permits two issues to be investigated. These are: (i) the interaction between budget emphasis and participation affecting propensity to create slack/job related tension, and (ii) the intervening effects of participation, trust and organisational commitment on the relationship between budget emphasis and propensity to create slack/job related tension. The results support the expectation that Norwegian managers generally enjoy very high level of budgetary participation. Second, they also support the expected significant negative relationship between budget emphasis and job related tension. Third, a high budget emphasis situation in Norway (high participatory) was found to have only a small and insignificant direct effect of job related tension. Instead, there is a strong indirect effect through trust. Based on these results, it is possible to conclude that a high budget emphasis and high participation combination will lead to lower job related tension. The reason for this is partly because this combination promotes higher trust between the subordinates and their superior. Trust, in turn, leads to lower subordinates' job related tension. These results provide valuable insights which help to explain why a compatible combination of high budget emphasis and high participation, found by a number of prior studies with the contingency model, can lead to better behavioural outcomes than other combinations of budget emphasis and participation.

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