THE EFFECT OF ORGANIZATIONAL · Web viewRobbins, Stephen P. 2001. Organizational Behavior. Ninth Edition. Prentice Hall, Inc., Upper Saddle River, New Jersey. Siegel, Gary., dan Helene

SNA VII DENPASAR – BALI, 2-3 DESEMBER 2004

THE ROLE OF ORGANIZATIONAL COMMITMENT AND JOB-RELEVANT INFORMATION ON THE RELATIONSHIP

BETWEEN BUDGETARY PARTICIPATION AND JOB SATISFACTION

By Mimin Nur Aisyah & Mahfud Sholihin

Abstract

The objective of this study is to investigate whether budgetary participation is associated with job satisfaction and if so, whether such relationships are indirect through organizational commitment and job-relevant information. This study hypothesizes that budgetary participation has indirect effect on job satisfaction through organizational commitment and job-relevant information. In order to test the hypotheses, this study employs a path analytical model to analyze the data collected from 76 managers of various Indonesian manufacturing companies. The results indicate that there is a significant association between budgetary participation and job satisfaction. Further analyses indicate that such relationships are partially mediated by organizational commitment and job relevant information. This means that in addition to the indirect effect via organizational commitment and job-relevant information, budgetary participation itself has a direct effect on job satisfaction.

Key words: Budgetary participation; job-relevant information; job-satisfaction; organizational commitment.

I. IntroductionBudgetary participation has been considered as one way to fulfill the need of

esteem and self actualization of organization members. There are many researches try to test the relationship between budgetary participation and job outcomes, such as job satisfaction. Prior studies on this issue suggest that there is a positive relationship between budgetary participation and job satisfaction (Cherrington & Cherrington, 1973; Milani, 1975; Kenis, 1979; Chenhall, 1986; Frucot & Shearon, 1991; Indiantoro, 1993; and Wagner, 1994). Brownell (1981, 1982), however, does not find any relationship between those two variables.

Chenhall and Brownell (1988) offer two possibilities of the inconsistency of the findings. First, it is conceivable that participation’s effect on outcome criteria can be positive in some circumstances and negative in others. The failure to carefully account for the circumstances in which participation “works”, versus those when it does not, would explain the variety of the results. This view, referred to as the contingency model view, maintains that the values taken on by certain variables (contingency variables) determine whether participation is positively related to outcome criteria, or not. A second view is that the equivocal results are due to the fact that, theoretically, the focal variables (participation and job satisfaction) are not directly related. That is, there is no theoretical argument which can support simple, direct effect of participation on job satisfaction. Instead, the effects of participation, if any, are indirect and are conveyed to outcome criteria via some intervening construct which links the variables. This view is referred to as intervening variable model,

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which, while contrasting with the contingency model, should be viewed as entirely complementary to it.

Intervening model had been used in many prior studies. Chenhall and Brownell (1988) have found the positive relationship between budgetary participation and job satisfaction through role ambiguity. Nouri and Parker (1998) study the effect of budgetary participation on performance through two intervening variables: budget adequacy and organizational commitment (OC). The results of the study show that budgetary participation increases budget adequacy, which then increases performance, indirectly through organizational commitment. Kren (1992) used job-relevant information (JRI) as an intervening variable to explain the relationship between budgetary participation and individual performance. The results show that participation effect performance, not directly, but through JRI.

Organizational commitment and job-relevant information had been separately used to explain the relation between budgetary participation and performance in the last two studies. While Nouri and Parker (1998) employ organizational commitment variable, they ignore job-relevant information. On the other hand, while Kren (1992) uses job-relevant information, he neglects the effect of organizational commitment. The selection of job satisfaction, instead of performance, is grounded on the importance of the former outcome variable in an organization to be successful. However, while the variable is important, none of researchers, at best of our knowledge, studies the model as the current study proposes. This current study tries to involve the two variables, job-relevant information and organizational commitment, in one model to test whether they together can act as intervening variables on the relationship between budgetary participation and job satisfaction.

II. Theoretical Framework and Hypotheses DevelopmentA. Linkage between Budgetary Participation and Job SatisfactionParticipation is “a process of joint decision making by two or more parties in

which the decision have further effects on those making them” Becker and Green (1978). Kenis (1979) stated that budgetary participation show manager’s participation level in budget preparation and budget’s effect to manager’s responsibility center. Budgetary participation is a process whereby subordinates are given opportunities to get involved in, and have influence on, the budget setting process (Brownell, 1982).

Budget has been proposed as a technique that can be used to enhance participant’s attitude to budget and to drive the accomplishment of budget’s goals and objectives. The main objectives of budgetary participation are: (1) to increase the acceptance of plan made, (2) to enhance employee’s and management’s morale, and (3) to enhance productivity. Brownell (1982b) shows that budgetary participation enables participants to feel that they have freedom in making a decision.

Milani (1975) stated that involvement level and employee’s influence in budget preparation process are main factors that differentiate participative budgeting with non- participative budgeting. Employee’s aspiration is more recognized in participative budgeting process rather than in non-participative budgeting process (Stedry, 1960). Participative budgeting enables managers (as subordinates) to negotiate the attainable budget target with their superiors (Brownell and McInnes, 1986; Dunk, 1990).

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Insert Figure 1 about here


Prior research in budgeting and job satisfaction show the positive relationship between participation in budgeting process and job satisfaction. The study of Cherrington and Cherrington (1973); Milani (1975); Kenis (1979); Chenhall (1986); Frucot and Shearon (1991); Indiantoro (1993) and Wagner (1994) find that budgetary participation enhances job satisfaction. In addition, Swieringa and Moncur (1975) also find higher satisfaction from manager who consults his budget compare to those whose not. In budgetary participation, subordinates get the chance of using all information and ability they have to contribute to organization. It gives recognition and appreciation of self esteem and self actualization. Based on the previous findings, therefore, it is reasonable to expect that budgetary participation enhances job satisfaction. However, such relationship may be indirect through organizational commitment and job-relevant information as will be discussed below.

B. Linkage of Budgetary Participation and Organizational Commitment

Porter et al (1974, 604) defined Organizational Commitment as “relative strength of an individual’s identification with and involvement in a particular organization” (Ketchand and Strawser, 2001). Mathieu and Zajac (1990) stated that organizational commitment is the bond that links the individual to the organization. According to Porter, et al (1974), commitment has the characteristics of: (1) internalization of the goals and values of the organization; (2) involvement in an organizational role in the context of these goals and values; (3) desire to remain in the organization over an extended period of time in order to serve its goals and values, and (4) willingness to exert effort in the interest of the organization’s goals and values apart from the instrumentality of this effort for the attainment of the individual’s goals.

Meyer and Allen (1984) differentiated organizational commitment into Affective Commitment and Continuance Commitment. Affective Commitment is defined as positive feeling of identification with, attachment to, and involvement in, the work of organization; while continuance commitment is the extent to which employees feel committed to their organizations by virtue the costs that they feel are associated with leaving (e.g. investments or lack of attractive alternatives. Affective (attitudinal) commitment has stronger relation with work outcomes, such as performance, rather than continuance (calculative) commitment (Mathieu and Zajac, 1990; Randall, 1990). Other researchers, Ketchand and Strawser (2001) divided organizational commitment in to four dimensions: affective commitment, continuance commitment, normative commitment, and instrumental commitment.

Decotiis and Summers (1986) find that commitment is central to organization life. Commitment has as its theme the notion of exchanged expectations between an organization and its members and a commitment to meet those expectations on the part of the organization and the employee. When an organization commits to meeting the need and expectations of its members, its members commit to the service of the organization in terms of its goals and values. Katz and Kahn (1978) have suggested that organizations need to go beyond attracting and holding people in the system and requiring dependable role performance, by developing high organizational commitment which maximizes innovative and spontaneous behavior (Welch and La Van, 1981).

Several prior researchers (e.g. Pachen (1965); Morries and Steers (1980), Rhodes and Steers (1981); Welch and La Van, 1981; Zahra (1984); Decotiis and Summers (1986) and Boshof and Mels (1995)) have found significant positive

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relationship between budgetary participation and organizational commitment. March and Simon (1958) argue that the more participation (of subordinates) in making policy decision, the stronger the tendency of subordinates to identify with organization. Lincoln and Kalleberg (1985) suggest that participation serves to integrate workers in the organization and commit them to organizational decisions.

Empirical study also finds that when managers tend to emotionally involved with the targeted budget if they are involved in budget preparation (Brownell, 1982). Hanson (1966) argues that by becoming involved in the creation of budget (through participative budgeting), members of the organization associate themselves more closely with and become better acquainted with budget goals. Participative budgeting increases employees’ identification not only with budgeted objectives but also with all organization goals (Nouri and Parker, 1998). Since organizational commitment involves the belief in and acceptance of the organizational goals and values, participative budgeting may increase organizational commitment. Then, we may expect the existence of positive relationship of budgetary participation and organizational commitment.

C. Linkage of Organizational Commitment and Job SatisfactionModway et al. (1979, p.226) argues that commitment differs from the

concept of job satisfaction, in which commitment emphasizes attachment to the employing organization, including its goals and values, while satisfaction emphasizes the specific task environment where employee performs his or her duties.

Studies which have specifically tested the causal relationship between organizational commitment and job satisfaction have mixed or inconclusive results. Gregson (1992) reported that satisfaction was antecedent of commitment, while Bateman and Strasser (1984) and Poznanski and Bline (1997) reported commitment to be antecedent of satisfaction.

Studies conducted by Kecthand and Strawser (2001), following Mathieu and Zajac’s (1990), consistently observed significant positive relationships between affective commitment and job/career satisfaction. High commitment usually related to individual’s job satisfaction in their organization. Job satisfaction is individual’s attitude to their job (Gibson et al, 1991). Individual will act positively to his job if he feels satisfied with his job. On the contrary, individual will tend to act negatively if he finds dissatisfaction in his job. Welsh and Lash (1981) found that organizational commitment was significantly related with two dimensions of job satisfaction: satisfaction with work and satisfaction with promotion. Some researchers such as Lee (1971) and Modway et al. (1979) have reported that highly committed individuals are more productive, better motivated, and more satisfied than their less committed co-workers.

The aforementioned discussion shows that budgetary participation is likely to associate with higher organizational commitment (part b) which may, in turn, lead to higher job satisfaction (part c). The following hypothesis therefore will be tested:

Ha1: There is an indirect relationship between budgetary participation and job satisfaction through organizational commitment.

D. Linkage of Budgetary Participation and Job-Relevant InformationInformation has been recognized as an important need for an organization to

achieve the expected excellence, especially in highly competitive environment. Drucker (1995) argues that information is the key in determining organization’s tactics and strategies. Accounting literature (Baiman, 1982; Baiman and Demski,

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1980; Tiessen and Waterhouse, 1983) has identified two primary types of information in organizations: (1) decision influencing, which is collected about a manager’s behavior for the purposes of performance evaluation; (2) job-relevant information (JRI), which help manager to improve his or her action choice through a better informed effort. JRI provides managers with a better understanding about alternatives decisions and act needed to achieve the goals. JRI improves performance because it allows more effective selection of appropriate courses of action. JRI is defined as information that facilitates job related decision making (Kren, 1992).

Kren (1992) argues that participation will facilitate the acquisition and the use of JRI. Since participation provides an opportunity to influence the budget before it is finalized, in preparing a participatory budget, a manager must generally assume a more active role. Thus, the manager becomes more involved in considering and evaluating alternative budget goals. Participation may thus increase the manager’s attempts to formulate accurate forecasts of environmental states and can focus the manager’s attention on decisions and behavior needed in the future periods. As, a consequence, budgetary participation can create an environment that encourages the acquisition and the use of JRI. Therefore, we expect that there is a positive relationship between budgetary participation and job-relevant information.

E. Linkage of Job-Relevant Information and Job SatisfactionJob satisfaction is one’s attitude to his or her job. To motivate individuals to

be satisfied with their job, they need more information related to their job. Being involved in participative budgeting, subordinates will be more enthusiastic to gather and use job-relevant information they have. Hence, it is expected that job-relevant information can facilitate subordinates to achieve a higher level of job satisfaction.

The discussion above shows that budgetary participation is likely to be positively associated with job-relevant information (part d). Job-relevant information is also expected to associate with job satisfaction. Based on the above discussion, the following hypothesis therefore, will be tested.

Ha2: There is an indirect relationship between budgetary participation and job satisfaction through job-relevant information

III. Research Method A. Data and Sample

Data for this study were collected using a questionnaire survey sent to 229 managers working in organizations listed as manufacturing companies in the Jakarta Stock Exchange. The names of the companies were published in the Indonesian Capital Market Directory (2000). The managers were selected from various manufacturing companies. This approach avoids external validity problems and enhances the possibility of generalizing results (Chong and Bateman, 2000). Only those manufacturing companies employing more than 100 employees each were studied, as firms with fewer than 100 employees may not have formalized control systems, and are unlikely to have clearly defined areas of responsibilities (Brownell and Dunk, 1991). In addition, the selection of organizations with more than 100 employees is useful for the control of the size of the organizations (Lau and Lim, 2002a).

The manufacturing sector was selected for this study because it is the largest sector (52%) published in the Indonesian Capital Market Directory. It is very common in management accounting research to study a single sector, but involving a

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number of organizations (e.g. Simon, 1986; Brownell and Dunk, 1991; Lau et al., 1995; Libby and Waterhouse, 1996; Hoque and James, 2000; Lau and Lim, 2002a, b). Listed companies were selected because almost all the largest and most advanced Indonesian companies were listed in the Jakarta Stock Exchange. This permits the selected sample to include the largest and most advanced companies in Indonesia. Although the sample was derived from manufacturing organizations, it was not the intention of this study to investigate a particular function (e.g. manufacturing). In order to ascertain if the results are generalized across functional areas, following previous management accounting studies (e.g. Hopwood, 1972; Otley, 1978; Brownell, 1982; Brownell and Dunk, 1991; Otley and Pollenan, 2000; Lau and Lim, 2002b), this study selected samples from across functional areas.

In order to provide some degree of control over the seniority of the respondents across organizations, only functional heads were selected. The functional heads were selected as follows. Telephone calls were made to the secretary of each company to obtain the names of the functional heads. This method ensured that the functional heads would receive the questionnaires and that they would be the only ones who answered the questionnaires. In addition, to avoid bias, only a maximum of 4 managers were selected from each company. On average, each company provided the names of two managers.

Based on the Indonesian Capital Market Directory (2000), there are 146 manufacturing companies. One company has less than 100 employees. Hence, it was excluded from the sample. One company regarded itself as a service rather than a manufacturing organization. Consequently, this company was also excluded from the sample. Thirty two companies informed the researchers that it was their policies not to disclose the name of their managers. As a result, the researchers were able to obtain the names of 229 managers from 112 companies. Table 1 and Table 2 present the industry types of the targeted sample companies and the sample selection process, respectively.

Insert Table 1 and 2 about here

B. Survey administration A questionnaire together with a prepaid return addressed envelope and a

covering letter explaining the objectives of the research was mailed to each of the 229 intended respondents. Three weeks after the questionnaires were sent out, a reminder letter was mailed to each of the managers. Managers who did not respond to the questionnaire two weeks after the reminder letters sent out, were contacted by phone. Out of the 229 questionnaires mailed, 83 responses (36%) were returned. Seven responses were excluded from the study because of the failure of the respondents to complete the whole questionnaire. As a result, there were 76 (33.18%) usable responses. Given that the survey was undertaken in Indonesia, such a response rate may be considered very high. Gudono and Mardliyah (2001) noted that response rates in Indonesia generally range from 10% to 16%.

C. Variables and their measurements C.1. Budgetary Participation

Budgetary participation was measured using Milani’s six item scale. The instrument is attempted to assess respondent’s involvement in and influence on budget process. The response scale was a seven point Likert type style ranging from

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one (low participation) to seven (high participation). This instrument had been broadly used in prior studies (Brownell, 1982; Brownell and Hirst, 1986; Brownell and Dunk, 1991, Nouri and Parker, 1998). Consistent satisfactory reliability and validity have been reported. In the current study, the Cronbach alpha coefficient was 0.89.

C.2. Organizational CommitmentOrganizational commitment was measured using a nine-item, developed by

Modway, et.al. (1992), and subsequently used by Price and Muller, 1981; Blau, 1987, Nouri and Parker, 1998; and Maier and Brunstein, 2001. The seven-point Likert-type scale ranging from one (strongly disagree) to seven (strongly agree). The acceptable level of reliability and validity are shown in this study by Cronbach alpha coefficient 0.82.

C.3. Job-Relevant Information Job-relevant information (JRI) was measured using instrument developed by

O’Reilly (1980). Three items were used to assess the extent to which managers perceived information availability for effective job-related decisions. Managers with adequate JRI are expected to perceive and report that they have adequate information to accomplish their job-related objectives and to evaluate important decision alternatives. The scale ranging from one (low JRI) to seven (high JRI). This instrument have been used by Kren (1992) and Chong and Chong (2002). The Cronbach alpha coefficient is 0.89.

C.4. Job Satisfaction There are two versions of the Minnesota Satisfaction Questionnaire (MSQ);

a long form (100 questions) and a short form (20 questions). The short form scales was used in this study to keep the overall questioning of the subjects within a reasonable time frame. Providing intrinsic and extrinsic job satisfaction score, this instrument used in the prior studies by Chenhall (1986), Chenhall and Brownell (1988), and Frucot and Shearon (1991). The questionnaire asked the respondents to indicate on a five point Likert-type style, which range from one (very dissatisfied) and five (very satisfied), describing how satisfied or dissatisfied they were with various dimensions of their job experience. The Cronbach alpha coefficient is 0.92.

IV. Results and discussion The study investigates whether budgetary participation is associated with job

satisfaction and if so, whether such relationships are indirect through organizational commitment and job-relevant information. A path analysis is considered as an appropriate technique to investigate such relationships. Cohen and Cohen (1983, p.126) suggest that to assess the adequacy of regression models, the residuals of the estimated values of the regression should be tested. Therefore, before testing the hypotheses, tests were performed to ensure that the inherent assumptions of the regression models were satisfied. Tests undertaken included testing for the normality of residual, homogeneity of variance of residuals and the appropriateness of the linear models. The results of these tests indicate that the inherent assumptions of the models used were validated.

In addition, it is also important to conduct non-response bias test before analyzing the data as suggested by Oppenheim (1966). The test is undertaken to

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ascertain whether there are systematic differences between responses that came in early, and those which arrived late. In conducting these tests, the responses were divided into two groups based on their dates of arrival. The first half comprises the 50 percent of responses, which came in early, and the second half comprises the last 50 percent of responses received. These tests were performed by running t-tests to compare the mean of responses for each variable between the two groups. The results indicate that there are no significant differences between the early responses and the late responses for all the variables examined in this thesis. Based on these results, it can be concluded there is no non-response bias.

The zero-order correlations between the variables examined in this study are presented in Table 3. These results provide preliminary support for all the hypotheses. Budgetary participation is positively associated with job satisfaction. Additionally, table 3 shows that both organizational commitment and job-relevant information are positively and significantly associated with job satisfaction. The results also indicate that organizational commitment and job-relevant information are positively and significantly related to each other, suggesting that multicolinearity may exist. Therefore, in addition to the three inherent assumptions of regression models, the presence of multicolinearity was also assessed by performing tolerance and variance inflation factor (VIF) tests for each regression model. The results, presented in Table 4, indicate that multicolinearity among variables was not detected. Therefore, there is no problem with the regression models used in this study.

Insert Table 3 and 4 about here

Hypotheses testing Hypothesis H1 states that there is an indirect relationship between budgetary

participation and job satisfaction through organizational commitment. Hypothesis H2 states that there is an indirect relationship between budgetary participation and job satisfaction through job-relevant information. As indicated in Table 3, there is a significant zero order correlation between budgetary participation and job satisfaction. The indirect effects of budgetary participation on job satisfaction consists of the following paths and are calculated as follows based on the values of the path coefficient in Table 5:

Path (1): BP – OC - JS = 0.307 x 0.425 = 0.130Path (2): BP - OC - JRI - JS = 0.307 x 0.294 x 0.053 = 0.005Path (3): BP - JRI - JS = 0.184 x 0.053 = 0.010Total indirect effect 0.145Path (1) indicates the indirect effect which exclusively via organizational

commitment is 0.130. Paths (2) and (3) indicate the indirect effect through job-relevant information is 0.015. These results show that the relationship between budgetary participation and job satisfaction comprises two effects. First, there is a direct effect of 0.290 (see Table 5) and second, there is an indirect effect of 0.145, which can be further decomposed into the portion attributable to organizational commitment (0.130) and the portion attributable to job-relevant information (0.015). Based on Bartol’s (1983) contention, those combined indirect effects may be considered meaningful because they exceed an absolute amount of 0.05.

Insert Table 5 about here

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Table 6 presents a summary of the decomposition of the zero-order correlations into the direct, indirect and spurious effects. In order to assess whether the relationship is fully or partially mediated by organizational commitment and job-relevant information, Baron and Kenny’s (1986) approach is used. This approach argues that a full mediation exists if a significant relationship (i.e. a significant zero order correlation) between the independent variable and dependent variable becomes insignificant (i.e. an insignificant path coefficient) after controlling for the effects of the intervening variables. On the other hand, the mediation is only partial if the relationship between the independent and dependent variable is still significant after controlling for the effects of intervening variables (Nouri and Parker, 1998; Lau and Buckland, 2001).

Insert Table 6 about here

For this study, the relationship between budgetary participation and job satisfaction is significant (r = 0.435; p<0.01, Table 3). After controlling for the indirect effects via organizational commitment (0.135) and job-relevant information (0.015), the path coefficient between budgetary participation and job satisfaction is still marginally significant (0.290, p<0.005, Table 5). This means that organizational commitment and job-relevant information mediate partially the relationship between budgetary participation and job satisfaction. In summary, apart from an indirect effect via organizational commitment and job-relevant information, budgetary participation itself has a positive and significant direct effect on job satisfaction. Based on these results, hypotheses H1 and H2 are supported.

V. Conclusions and limitations The objectives of this study are (1) to investigate whether budgetary participation affects managers’ job satisfaction; (2) if so, whether the effects are indirect through organizational commitment and job-relevant information. Consequently, this study hypothesizes that budgetary participation has indirect effects on managers’ job satisfaction through organizational commitment and job-relevant information.

In order to test these hypotheses, this study employed a path analytical model to analyze the data collected from 76 managers of various Indonesian manufacturing companies. The results indicate that there is a significant association between budgetary participation and job satisfaction. Further analyses indicate that such relationships are partially indirect and mediated by organizational commitment and job-relevant information. This means that in addition to the indirect effect via organizational commitment and job-relevant information, budgetary participation in itself has a direct effect on job satisfaction. Based on these results, the overall findings of this study are generally in accordance with expectations. That is, budgetary participation has indirect effects on job satisfaction through organizational commitment and job-relevant information.

As with other empirical studies, there are limitations associated with this study. First, there are limitations associated with the survey questionnaire method. These include low response rates and the possibility of respondents’ bias in filling in the questionnaire due to the lack of control from the researcher. Therefore, future studies could employ other methods (e.g. case study) in exploring the issues studied here. Second, although the sample of this study was selected from across functional areas, the number of responses from a particular area is small. Hence, analyses of the results

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on functional basis were not undertaken. Future research should investigate if variation across functional areas may influence the results. In addition, since the sample was selected from larger-sized organizations with more than 100 employees each, it is unclear if the results can be generalized to smaller-sized organizations with less than 100 employees. Finally, as this study only selected samples from the manufacturing sector and only among Indonesian managers, generalizing the results to non-manufacturing sectors and to other Asian countries should be made with caution. These limitations provide opportunities for future research to study these issues in other sectors and in other Asian and Western countries.

Notwithstanding the aforementioned limitations, this study, at best of our knowledge, is the first to explore the relationships between budgetary participation and job satisfaction which includes organizational commitment and job-relevant information in a single model.

Figure 1. The relationship between budgetary participation and job satisfaction

Table 1. Industry types of targeted sampleIndustry Type Number of CompaniesFood and beverages 21Tobacco 3Textile mill products 8Apparel and other textile products 15Lumber and wood products 5Paper and allied products 6Chemical and allied products 8Adhesive 4Plastics and glass products 11Cement 3Metal and allied products 11Fabricated metal products 3Stone, clay, glass and concrete products 4Machinery 2Cable 6Electrics and electronic equipment 5Automotive and allied products 16Photographic equipment 3Pharmaceuticals 8Consumer goods 4Total 146

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Organizational Commitment

Job-Relevant information

Budgetary Participation

Job Satisfaction


Table 2. Sample selection processDescription Number of

companiesTargeted company sample 146Has less than 100 employees 1Regarded itself as a service organisation 1Will not disclose the name of their managers

32

Final company sample 112

Table 3. Correlation matrix among variablesOrganizational Commitment

Job-relevant Information

Job satisfaction

Budgetary Participation

0.307** 0.274** 0.435**

Organizational Commitment

0.350** 0.533**

Job-relevant indormation

0.281**

**.correlation is significant at the 0.01 level (1 tailed)

Table 4. Multicolinearity detection with managerial performance as dependent variable.

Variable Tolerance VIFConstant n/a n/aBudgetary Participation 0.874 1.144Organizational Commitment 0.829 1.206Job Relevant Information 0.847 1.181

Table 5. Path analysis results of job satisfaction¸ budgetary participation, organizational commitment and job-relevant information.

Dependent Independent Path Coefficient

t-value p-value

OC BP 0.307 2.778 0.007JRI BP 0.184 1.621 0.109

OC 0.294 2.594 0.011JS BP 0.290 2.887 0.005

OC 0.425 4.131 0.000JRI 0.053 0.516 0.607

BP: Budgetary ParticipationOC: Organizational CommitmentJRI: Job-relevant InformationJS: Job satisfaction

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Table 6. Decomposition of the observed correlations (managerial performance)Relation Observed

correlationDirect Effect Indirect

EffectSpurious

EffectBP – OC 0.307 0.307 - -BP – JRI 0.274 0.184 0.09 -BP – JS 0.435 0.290 0.145 -OC – JS 0.533 0.425 0.015 0.093JRI - JS 0.281 0.053 - 0.228

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THE EFFECT OF ORGANIZATIONAL · Web viewRobbins, Stephen P. 2001. Organizational Behavior. Ninth Edition. Prentice Hall, Inc., Upper Saddle River, New Jersey. Siegel, Gary., dan Helene