Determinants of employees’ psychological ownership on budgetary slack

Abstract

The existence of budgetary slack permeates every level of private sector organisations. Employees (i.e., budget makers) usually request excessive budgetary resources in the budgeting process. Due to its dysfunctional nature, existing researchers had extensively examined the relationship between budgetary slack and employees' performance. This study adopted a survey questionnaire approach to examine the relationship between determinants of psychological ownership and employees' intention to create slack in budgeting. There were 475 budget makers from private sector organisations in the Klang Valley, Malaysia who participated in this study through a questionnaire survey. Preliminary data analysis was performed using normality, multi-collinearity, variance inflation index (VIF), common method variance, and reliability analysis. Multiple regression analysis was also applied to investigate the relationships of each dimension of employees' psychological ownership on budgetary slack. This paper is considered a pioneer empirical study that investigates the determinants of psychological ownership on budgetary slack among budget makers from the psychological perspective in the context of private sector organisations in Malaysia, where slack activities in budgeting existed.

Predicting Organizational Citizenship Behavior Through Psychological Ownership and Job Satisfaction in Four-Star Hotels

“…Therefore, personal characteristics have a stronger influence in the cultivation of extra-role behavior (OCB) than attitude (Yee et al, 2018). It also confirms that PO's direct effects in creating OCB are stronger with JS.…”

“…The findings of this study suggest that such personal characteristics (Yee et al, 2018) have a greater impact on attitudes toward extra-role behaviour (OCB). The study results also indicate that PO significantly affects OCB.…”

“…Theoretically, some previous studies suggest that the predictors of OCB are JS and organizational engagement as indicators of the attitudes of the employees. Yee, Wong Sek Khin, and Ismail (2018) explain the PO's determinants include some of an employee's personal characteristics, such as feelings of ownership in mind and practice, motivation, good sense of ownership, self-efficacy, belonging and self-identity.…”

“…Moreover, PO plays a central role in increasing OCB, and is the primary determinant. Yee et al (2018) stressed the PO's determinants include a variety of employee personality traits, including a feeling of belonging in thoughts and acts, a driven feeling, a clear sense of ownership, self-efficacy, belonging and self-identity.…”

Budgetary Slack: Does it Hurt Organisations?

“…Many previous studies have demonstrated that the manager's participation resulted in budgetary slack. Most of them, by utilizing agency theory (Baiman et al, 2000;Namazi, 1985) and psychological paradigms (Andre et al, 2016;Cheok et al, 2018;Hartmann and Maas, 2010;Young et al, 2021) have been focused on the manager's participation in budgeting and its effect on the use of budgetary slack (Macinati and Rizzo, 2014;Maiga and Jacobs, 2007;Merchant, 1985).…”