Relationship between leadership style, encouragement of budgetary participation and budgetary participation/Relacion entre estilo de liderazgo, incentivo de la participacion y participacion presupuestaria/Relacao entre o estilo de lideranca, o incentivo a a participacao e a participacao orcamentaria.
| Autor | Lunardi, Micheli Aparecida |
| Cargo | Research article |
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Introduction
The focus of leadership theory developed in the 1970s is the relationship that leaders develop with their subordinates (Niemeyer & Cavazotte, 2016). The theory of leadership styles as well as the attitudes and behaviors of individuals in response to leadership style have been developed and tested in the US and other developed countries (Yukl, 1989). The core of their approach is that leadership is a process as a result of interaction between leaders and subordinates. The relationship between the leader and the followers can vary according to the degree of respect, trust and support (Niemeyer & Cavazotte, 2016).
From this perspective, leadership theory assumes that the leader behavior has profound effects on subordinates (Bass, 1990). There is a link between the personality of managers and leaders and the management model of their organizations (Bianchi, Quishida & Foron, 2017). The leader plays an essential role that can encourage subordinates to participate in organizational processes. According to Dunk (1993) and Li, Nan and Mo (2010), without adequate incentives for effective communication, some benefits may not be perceived or missed. Young (1985), Shields and Young (1993) and Kyj and Parker (2008) explain that incentives to participate in the budget should occur only if the subordinate is free to establish a reward estimate without undue pressure or interference from senior management.
The management control procedures frequently used in organizations involve the participation of managers and their subordinates. Of these, the budgetary participation is highlighted (Silva & Gomes, 2010). Budget participation is defined as an administrative process in which a subordinate is involved and has influence over the determination as well as the budgeting (Covaleski, Evans, Luft & Shields, 2006; Shields & Shields, 1998; Milani, 1975).
The budget is one of the widely researched topics in managerial accounting (Luft & Shields, 2003), and budget participation is an emerging theme in the behavioral approach to accounting (Birnberg, Luft & Shields, 2006). According to Covaleski et al. (2006) and Buzzi, dos Santos, Beuren & de Faveri (2014), researchers have noted the importance of the budget and have conducted research related to the topic, but the results have been conflicting. In this context, the purpose of this study is to evaluate the relationship between leadership style, the incentive to budget participation and budgetary participation of controllers with budgetary responsibility in companies operating in Brazil. The problem question that guides the research is: what is the relationship between leadership style, incentive participation and budget participation of controllers?
The basic paradigm to evaluate the history of the use of the participation in the budget is presupposed that all action is triggered by the anticipated accomplishment of the objectives of the entity (Mahlendorf, Schaffer & Skiba, 2015). Understanding leadership is one of the oldest human tasks. For Carvalhal and Muzzio (2015) it was around 2,300 before Christ (BC) that the Egyptians recorded the first writing on the subject. From the nineteenth century, lead ership studies were systematically organized. Currently, there are numerous approaches, perspectives, and recurrent definitions of leadership (Azevedo, 2002). Among the pieces of evidence found in research on the subject, there is a consensus among scholars that leadership reveals the influence of the leader over the subordinates (Almada & Policarpo, 2016; Carvalhal & Muzzio, 2015).
The studies on the topic of leadership have been important to organizations (Loiola & Bastos, 2003; Mulki, Caemmerer & Heggde, 2015) since an appropriate leadership style is a decisive strategy for companies to achieve innovation and competitiveness. The leadership style has been investigated as the behavior of the leader in the context of the work capable of being modified in the perspective of training (Azevedo, 2002). The leader is a change agent who strives for a balance in the conduct of his work activities in order to influence the subordinates to reach the established goals.
It is from this perspective that the topic of leadership in this research is addressed, seeking to observe the effects of the leader's behavior as an antecedent element to the participation of subordinate managers in the budget processes, a convergent approach adopted by Kyj and Parker (2008) and Otley and Pierce (1995). In this way, this study seeks to provide from its results important contributions for organizational behavior and literature on budget participation and leadership style. By perceiving the reasons superiors encourage participation in the budget, it is possible to understand the causes of subordinate participation. In addition, it is possible to verify how participation affects the relationship between superior and subordinate (Kyj & Parker, 2008).
To investigate the proposed relationships, a questionnaire was applied to 316 controllers in Brazilian companies. Structural equations were used to statistically evaluate the hypotheses. In relation to leadership style, incentive budget participation and budget participation, statistical results reveal a positive and significant association between leadership style and the incentive of budget participation, and the incentive of budget participation, in turn, is significantly associated budget participation.
The findings suggest that when superiors encourage budget participation, subordinates are more likely to participate in budgeting; however, when the incentive to budget participation does not occur, subordinate budget participation is mitigated. In this way, budget participation can demonstrate the superior's leadership style.
This article is structured in five sections: the first comprises the introduction of the research. In the second one, the antecedents and hypotheses of the research are presented. The third section describes the method used. Then, the results of the model tested are demonstrated. Finally, in the fifth section, the conclusion of the study is verified.
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Theoretical framework
Theorists approach leadership as a collective process. In a group, there is usually one person who has greater influence and carries out some leadership functions (Niemeyer & Cavazotte, 2016). Yukl (1989) emphasizes that some theorists limit the definition of leadership to an exercise of influence of an individual resulting in the commitment of followers.
Leadership theory shows that leader behavior has profound effects on subordinates, even as they relate to their leaders as well as to each other (Bass, 1990). The core of this approach is that leadership is a process, because of interaction between leaders and subordinates. In this way, the relationship between the leader and the followers can become a high level of a partnership through the degree of respect, trust and support exchanged between them (Niemeyer & Cavazotte, 2016).
Brownell (1981) has shown that the superior's leadership style is directly linked to budget share. According to Milani (1975), budget participation is a concept used to delineate the extent to which a subordinate can define his course of action, and this design may generate certain types of human reactions. Appropriate leadership styles and human resource practices that drive engagement between the superior and the subordinate need to be promoted in organizations to drive managerial performance (Popli & Rizvi, 2016).
Under the budget context, as Kyj and Parker (2008) and Yukl (1989) point out that a leader can use budget participation incentives to accurately and clearly reach the role of his subordinates in the organization. Superiors encourage budget participation for a variety of reasons, among which Kyj and Parker (2008) emphasize motivating open and communicative relationships, and access to private information that is under the power of subordinates. Studies in managerial accounting have examined how the leader's incentive affects the subordinate's individual effort (Tuttle & Burton, 1999).
According to Fleishman and Harris (1962, 1998), managers who respect subordinates and develop with these relationships based on trust and open communication are likely to encourage subordinates to participate during the budget process (Kyj & Parker, 2008). Business leaders engage in opportunity-focused activities. Thus, their involvement makes them influence their subordinates, motivating them and encouraging them in management processes and business standards.
Kyj and Parker (2008) and Brownell (1982) propose that leadership style positively influences the subordinate's incentive to participate in the budget. In this way, the first hypothesis of the research is to verify the influence of the leadership style on the incentive of the subordinates' budgetary participation:
* [H.sub.1]: leadership style is positively associated with the incentive to budget participation.
Budgetary participation provides opportunities to influence the budget, from the time leaders assume more active roles in budget participation (Kren, 2003). For Harrison and Lock (2004), the effect of a superior leadership style on budget participation is an important issue to be considered in managerial accounting.
The results of researches conducted by Popli and Rizvi (2016), Niemeyer and Cavazotte (2016), Otley and Pierce (1995) and Fleishman and Harris (1962), presented significant relationships between leadership style and individuals' participation in the budget process. The role of the leader and his/her leadership styles are very important to reach goals (Kasiati & Minarsih, 2015), and the participation of subordinates is seen as a key strategy for organizational success (Popli & Rizvi, 2016).
In this research, considering the predominant evidence found in the previous revisited studies, it is suggested that leadership style positively influences...
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