Relationships among budgeting control system, budgetary perceptions, and performance: A study of public hospitals

The environmental uncertainty of medical industry was raised from the medical expenditure controlled by the government and the third party payers. This circumstance had forced hospital managers to learn management accounting. Budgeting control system was among the most popular mechanisms used by managers to contain costs and improve performance. However, budgeting control system could not achieve effectiveness in planning, motivating, negotiating, and controlling if there was no support from the organizational members. To obtain this support, careful attention must be given to the perceptive side of budgeting control system. In view of this, this study sought to explore the factors affecting the budgetary perceptions of hospital managers and the relationships of these perceptions with performance. The empirical study was based on a sample of 132 budgeting managers from a public hospital. Empirical results supported the proposed hypotheses that when the degree of budgetary feedback and budgetary participation were high, the budgetary motivation and budgetary attitude would be high, but the propensity to budgetary slack would be low, when the degree of budgetary motivation and budgetary attitude were high, the budgetary performance would also be high.