Understanding Participation: Situational Participation, Intrinsic Involvement, and Influence

Participation is a key concept in budgeting practice and research. While extant literature primarily focuses on the antecedents and modifiers of participation, here we focus on the measurement of participation. Building on theoretical and empirical research on user involvement and influence from the information systems, decision–making, and organizational justice literature, we develop a new theoretical perspective on budgetary participation. This new perspective recognizes the complexity of participation and separates it into three dimensions: situational participation, intrinsic involvement, and influence. We provide evidence of these new insights by testing hypotheses based on the model via results from a survey. Survey results from middle managers indicate that our three separate dimensions of budgetary participation impact motivation and satisfaction in different ways. Specifically, situational participation does not have a direct impact on either motivation or satisfaction; intrinsic involvement impacts both satisfaction and motivation; and influence impacts satisfaction, but does not impact motivation. These new insights can enhance future budgeting research as well as help managers design participative budgeting processes to improve employee motivation and satisfaction to hopefully enhance organizational performance.