Der Fuss 2015

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ABACUS, Vol. 51, No. 2, 2015 doi: 10.1111/abac.12046
KLAUS DERFUSS
Relating Context Variables to Participative

Budgeting and Evaluative Use of
Performance Measures: A Meta-analysis
Extant findings regarding how context variables relate to participative

budgeting and the evaluative use of accounting performance measures
(APM) are contradictory. Unlike previous reviews of such findings, this
empirical article uses a meta-analysis to examine the relations of context
variables with participative budgeting or evaluative use of APM to deter-
mine (i) how the variables relate and (ii) which factors might cause
between-correlation variance, such as statistical artefacts or moderating
influences of variable measures, sample selection, or industry differences.
All meta-analyses are based on rather small samples. Three groups of
context variables emerge. First, some relate significantly and homoge-
neously to participative budgeting or evaluative use of APM; these direct
relations should be considered explicitly in further studies. Second, for
some variables, the relations are homogeneous but not significant, such that
they are neither simple nor direct. Third, substantial variance exists in the
correlations for some context variables; these relations are contingent on
other influences. Industry differences and sample selection explain some
inconsistencies in exploratory moderator analyses and should receive addi-
tional research attention.
Key words: Context variables; Management control; Meta-analysis; Par-
ticipative budgeting; Performance evaluation; Performance measurement.
For nearly four decades, accounting research has studied how context variables
relate to two interrelated practices that demarcate the start and end of a typical
management control cycle (Hartmann, 2000). As a key part of budget preparation,
Klaus Derfuss (klaus.derfuss@fernuni-hagen.de) is Assistant Professor at the Department of Manage-

ment Accounting at the University of Hagen, Germany.
The author thanks Ralph W. Adler and Jonathan Reid, Patricia Casey Douglas and Benson Wier, and
Raili Pollanen for providing (partially) unpublished correlation coefficients, and Shaereh Shalchi for her
assistance with coding the data. For many very helpful suggestions and comments the author is grateful
to Ariela Caglio, Aldonio Ferreira, Michael Holtrup, Jens Hogreve, Jörn Littkemann, Thomas Mazzoni,
Shaereh Shalchi, and participants at the 6th Annual Conference for Management Accounting Research
2009 in Vallendar, Germany, the 32nd EAA Annual Congress 2009 in Tampere, Finland, the 9th EIASM
Manufacturing Accounting Research Conference 2009 in Muenster, Germany, and the 5th EIASM Con-
ference on Performance Measurement and Management Control 2009 in Nice, France, as well as to
Stewart Jones (Editor), Frank Hartmann (Associate Editor), and two anonymous reviewers. This paper
updates and extends earlier evidence from the author’s dissertation. Work on this paper was supported by
a grant from the ‘Nachwuchsförderfonds’ (Fund for the support of young researchers) of the University
of Hagen, Germany.
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© 2015 Accounting Foundation, The University of Sydney
R E L AT I N G C O N T E X T A N D B U D G E T I N G VA R I A B L E S
participative budgeting describes the ‘process in which individuals, whose perfor-

mance will be evaluated, and possibly rewarded, on the basis of their achievement of
budget targets, are involved in, and have influence on, the setting of these targets’
(Brownell, 1982b, p. 124). Related to performance control, the evaluative use of
accounting performance measures (APM) captures ‘the extent to which superiors
rely on, and emphasize those performance criteria which are quantified in account-
ing and financial terms, and which are prespecified as budget targets’ (Harrison,
1993, p. 319).1 To resolve apparent conflicts in investigations into the consequences
of these variables, several authors (Otley, 1978; Hirst, 1981; Brownell, 1982b) have
suggested possible contextual effects. The studies that explore such influences con-
stitute an important body of research, which Brownell and Dunk (1991, p. 703) call
‘the only organized critical mass of empirical work in management accounting’.
But alongside this growing research stream, several critical reviews express
concern that studies of contextual influences fail to resolve discrepancies and instead
are themselves conflicting (Otley, 1980; Kren and Liao, 1988; Briers and Hirst, 1990;
Chapman, 1997; Shields and Shields, 1998; Hartmann, 2000; Dunk, 2001). Such
critiques tend to focus on conflicts in theorizing and modelling practices, such as
omitted variables (Chapman, 1997; Hartmann, 2000) or an overemphasis on statis-
tical sophistication (Briers and Hirst, 1990; Hartmann and Moers, 1999). But they
also stress research design choices that might have introduced variance, such as small
samples, reliability problems, inconsistent construct measures, varying sampling pro-
cedures, and industry influences (Briers and Hirst, 1990; Lindsay, 1995; Otley and
Fakiolas, 2000; Noeverman et al., 2005).
No existing reviews use meta-analyses of extant results to test the claims statisti-
cally, even though meta-analysis is the method of choice for clarifying inconsistent
research results and their reasons (e.g., Trotman and Wood, 1991; Brown, 1996; Hay
et al., 2006; Aguinis et al., 2011). Moreover, meta-analyses that assess outcomes of
participative budgeting and the evaluative use of APM disagree with some conclu-
sions of review articles. In particular, many relations derived from the statistical
aggregation of individual studies’ results are less contingent than review articles
suggest (Greenberg et al., 1994; Derfuss, 2009). Other meta-analytic findings support
the influences of research design choices. For example, Derfuss (2009) finds that the
measurement used for the evaluative use ofAPM and industry differences can explain
inconsistencies in prior results, whereas sampling procedure influences are not appar-
ent. But no meta-analysis explores the correlations of context variables with partici-
pative budgeting and the evaluative use of APM, despite inconsistencies in the results
pertaining to these relations (Shields and Shields, 1998; Hartmann, 2000).
1
This variable appears with different labels, including budget emphasis (Brownell, 1982b) and reliance
on accounting performance measures (RAPM; Harrison, 1993). It overlaps with two constructs derived
from Swieringa and Moncur (1975): (1) evaluative use of budget, which describes budget use for
performance evaluation and practices such as requirements to explain variances or investigations of
overspent items (Abernethy and Stoelwinder, 1991); and (2) evaluation by budget, which covers both
superiors’ and subordinate managers’ uses of budgets for performance evaluation (Macintosh and
Williams, 1992). Despite some overlap with the evaluative use of APM, as defined here, these con-
structs are not included because they are conceptually broader and might cause distorted results.
239
A BAC U S
In this case, meta-analysis serves two principal purposes (Hunter and Schmidt,
2004; Geyskens et al., 2009; Aguinis et al., 2011). First, it estimates the sign and
strength of construct-level correlations and thereby offers greater statistical power
and more reliable conclusions than any individual study. Second, it estimates
between-study variance in the distribution of correlations and analyzes potential
sources, including both artefact-induced variance that can be corrected for in the
aggregation process (e.g., sampling or measurement errors)2 and non-artefactual
variance caused by substantial differences between correlations. If all variance can
be attributed to artefacts, the variables’ relation is homogeneous and generalizable
across settings. With non-artefactual variance though, moderating variables may
account for between-study heterogeneity, and research design choices offer primary
candidates, because they otherwise blur theoretical influences (e.g., Greenberg et al.,
1994; Brierley, 1999; Pomeroy and Thornton, 2008).
Therefore, this article presents a meta-analysis of findings pertaining to the rela-
tions of multiple context variables with participative budgeting or the evaluative use
of APM. Furthermore, it explores which factors cause variance across studies, the
influence of statistical artefacts, and the moderating influences of research design
choices regarding variable measurement, sample selection, or industry differences.
Following Hunter and Schmidt (2004), this study summarizes correlations from 53
independent samples that relate participative budgeting to eleven context variables
and the evaluative use of APM to eight context variables. Therefore, it makes several
contributions to the literature. It is the first study to meta-analyze these relations, so
it complements prior analyses that focus on the consequences of participative bud-
geting or the evaluative use of APM, such as managerial performance, job satisfaction,
or job-related tension (Greenberg et al., 1994; Derfuss, 2009).The summary of results
for many relevant context variables (i.e., those related to participative budgeting or
evaluative use of APM) also offers an update and extension to existing reviews.
Furthermore, meta-analysis is valuable because it affords control and enables
researchers to identify which variables have been well addressed by empirical
studies and those that are less well researched but demand further study
(Viswesvaran and Ones, 2002; Carlson and Ji, 2011). The findings of only three to
nine correlations for each relation are especially disconcerting; after several decades
of study, there is still a long way to go before it is possible to draw robust cumulative
knowledge from this body of research.
By offering close estimates of the relations’ sign, strength, and variability, this
meta-analysis in turn informs future theory development and empirical research
(Schmidt, 1992). Challenging previous beliefs about the variability of context vari-
able influences, the results indicate eight homogeneous relations. Of these, five
significant results indicate substantial relations, but for three relations, the variables
2
Hunter and Schmidt (2004) identify 11 artefacts that affect study outcomes: sampling error; measure-
ment error in the independent and dependent variables; range variations in the independent and
dependent variables; dichotomizations of continuous independent and dependent variables; devia-
tions from perfect construct validity of independent and dependent variables; reporting or coding
errors; and variance due to extraneous uncontrollable factors.
240
appear unrelated, such that the relations are neither simple nor direct. Another
eleven relations are marked by non-artefactual variance. Exploratory moderator
analyses reveal important differences among manufacturing and service industry
samples with regard to the relationship between task difficulty and participative
budgeting, as well as across random and non-random samples in the information
asymmetry–participative budgeting relation. Claims about the variance-inflating
influence of these differences thus appear valid and should be explored as boundary
conditions for theories of both participative budgeting and the evaluative use of
APM (Malmi and Granlund, 2009).
BACKGROUND AND RESEARCH QUESTIONS
Relations of Context Variables to Participative Budgeting and

Evaluative Use of APM
The study of context influences evolved from an important dilemma in research on
participative budgeting and the evaluative use of APM: studies examining the
impact of both variables on managerial and organizational outcomes have reported
conflicting results (e.g., Kren and Liao, 1988; Shields and Shields, 1998). For example,
studies of participative budgeting indicate positive (Brownell and McInnes, 1986)
and non-significant (Milani, 1975) effects on managerial performance; those on the
evaluative use of APM similarly find positive (Hopwood, 1972) and non-significant
(Otley, 1978) relations with job-related tension.
In response to these conflicts, several authors have proposed potential contextual
variables that might capture systematic differences in the influences on participative
budgeting (Brownell, 1982b), the evaluative use of APM (Otley, 1978; Hirst, 1981),
and the respective outcomes of each aspect. Traditionally, context variables are
‘considered to be outside of the control of the organization’ (Otley, 1980, p. 422), but
in addition to truly exogenous variables, such as environmental or cultural influ-
ences, analyses frequently explore strategic or organizational structure choices (e.g.,
Chia and Koh, 1996; Chenhall, 2003). Brownell (1982b) notes that the context
variables used in extant studies fall into four broad categories: cultural, organiza-
tional, interpersonal, and individual. Table 1 summarizes the variables for which at
least three correlations—with participative budgeting, the evaluative use of APM, or
both variables—have arisen in prior research.3
3
More variables can describe the context, such as organizational variables regarding the environment,
technology, organization structure (Bruns and Waterhouse, 1975; Hirst and Yetton, 1984; Merchant,
1984; Leung and Dunk, 1992; Collins et al., 1995; Dunk, 1996; Lal et al., 1996; Abernethy and Brownell,
1997; Dunk and Lal, 1999; Winata and Mia, 2005), or organizational culture (Goddard, 1997a, b;
Subramaniam and Ashkanasy, 2001; Subramaniam and Mia, 2003); interpersonal variables, like initia-
tion structure leadership style (Brownell, 1983), managerial roles (Macintosh and Williams, 1992;
Williams et al., 1997), or superior–subordinate relationships (Mia and Patiar, 2002); and individual
variables, including authoritarianism (Hofstede, 1967; Chenhall, 1986), cognitive style (Dunk et al.,
1996), flexibility (Collins, 1978; Seiler and Bartlett, 1982), need for achievement (Subramaniam et al.,
2002; Yuen, 2007), or value orientation towards innovation (Nor Yahya et al., 2008; Subramaniam and
Mia, 2001). But for these variables, only one or two correlations are available, at best.
241
Table 1
VARIABLES USED TO MEASURE CONTEXT INFLUENCES
Brownell’s (1982b) Variables used1 Description2 Results in studies on . . .

category
Participative Evaluative
budgeting3 use of APM
Cultural variables National culture Nationality of respondents as proxy for national culture; cultural differences are controlled for using –/0 –/0
Hofstede’s (2001) dimensions (Harrison, 1992).
Organizational Company size Logarithm of firm’s total sales, taken from annual reports (Govindarajan, 1988), or total number of 0
variables employees (Lillis and van Veen-Dirks, 2008).
Decentralization The amount of authority to make decisions delegated to a manager (Gordon and Narayanan, 1984). 0/+ 0/+
Environmental The predictability of the external environment, as perceived by key decision makers (Gordon and 0 –/0/+
uncertainty Narayanan, 1984).
Hierarchical level The hierarchical level a manager occupies in an organization (Dunk, 1992b). –/0
Business unit The way a business unit can gain competitive advantages over competitors with either a low cost –/0/+
strategy position or high product differentiation (Govindarajan, 1988).

Task uncertainty The amount of perceived uncertainty associated with the work environment and the task 0 –/0
242
requirements (Withey et al., 1983).
A BAC U S
Task difficulty The degree of complexity of work and the amount of problem solving required, one of the –/0/+ –/0
dimensions of task uncertainty (Withey et al., 1983).4
Unit size Logarithm of number of business units’ full-time employees (Govindarajan, 1988) or sales (Van der 0/+
Stede, 2001).
Interpersonal Consideration The degree to which a superior pays attention to subordinates’ well-being, status, contributions, and +
variables (leadership style) comfort (Stogdill, 1963).
Information The degree of difference in information about local conditions between superior and subordinate –/0/+ 0
asymmetry managers (Dunk, 1993).
Individual Ethical idealism The degree to which a manager believes that good consequences can be obtained in all cases 0/+
variables (Forsyth, 1980).
Ethical relativism The degree to which a manager believes that there are several ways of looking at ethical issues –/0/+
instead of believing in generally applicable moral rules (Forsyth, 1980).
Locus of control The degree of managers’ acceptance of personal responsibility for the outcomes of his or her actions –/0
(Rotter, 1966).
Notes:
1. Variables displayed are those for which three or more correlations are available in prior literature.
2. Descriptions are derived, as far as possible, from the sources of the most frequently used measures of the respective variables.
3. —indicates negative, 0 is non-significant, and + indicates a positive relation (non-directional, p < 0.05) in prior studies.
4. For task variability, the second dimension of task uncertainty (Withey et al., 1983), only two correlations were retrieved.
To support their inclusion of specific context variables, researchers draw on dif-

ferent organizational (e.g., contingency; Brownell, 1985), economic (e.g., principal
agent; Moers, 2006), and psychological (e.g., personality; Mia, 1987) theories. At the
theoretical level (e.g., Chenhall and Moers, 2007), various studies propose different
relations among contextual variables, participative budgeting, and the evaluative use
of APM, together with their respective outcomes (Shields and Shields, 1998;
Hartmann and Moers, 1999; Donaldson, 2001; Luft and Shields, 2003; Gerdin and
Greve, 2004, 2008). First, adopting a selection approach, researchers model partici-
pative budgeting or the evaluative use of APM as managerial choices, in response to
context influences, but do not link them theoretically to outcome variables. Second,
studies that take a mediation approach instead propose that the respective context
variable has a significant indirect effect on a dependent variable through participa-
tive budgeting or the evaluative use of APM. Third, some studies assume that a
context variable moderates the relationship between participative budgeting or the
evaluative use of APM and an outcome variable. In this case, the context variable is
theoretically unrelated to either budgeting or the outcome variable.
However, studies on the links of the same context variables with participative
budgeting or the evaluative use of APM tend to use different theoretical models.4 For
example, in line with a selection or mediation approach, Shields and Shields (1998;
also see Covaleski et al., 2003) draw on principal agent, psychological, and contin-
gency theories to cite environmental and task uncertainty as antecedents of partici-
pative budgeting. According to principal agent theory, the principal would use
participative budgeting to gather private information from the agent and then use
that information to design adequate incentive contracts. Because information asym-
metry increases with greater uncertainty, participative budgeting becomes more
important for contracting, such that it is caused by uncertainty. Similarly, psycho-
logical theory depicts participative budgeting as a mechanism for information trans-
fer between superiors and subordinates that can suggest budget levels that will
motivate subordinates. Because the attainability of these budgets depends on the
degree of uncertainty, participative budgeting is more important in uncertain situa-
tions. Finally, from a contingency theory perspective, uncertainty again causes par-
ticipative budgeting, because participation stimulates information transfer, such that
it serves as an integrative mechanism in differentiated organizations. Yet several
studies also propose that environmental and task uncertainty moderate the relations
of participative budgeting with outcome variables, such as performance or job
satisfaction (e.g., Brownell, 1985, 1987; Brownell and Hirst, 1986; Govindarajan,
1986; Lau et al., 1995). To obtain favourable outcomes, the necessary degree of
participative budgeting is contingent on the level of uncertainty: under high uncer-
tainty, more participation is needed to set budgets that can adequately address this
4
Here, only the relations of environmental and task uncertainty with participative budgeting serve as
examples, because these two variables have received considerable attention in participative budgeting
research (see Shields and Shields, 1998) and thus should offer good examples of existing theoretical
and empirical discrepancies. Similar problems also pertain to many other variables (see Table 1). A
detailed discussion of all such inconsistencies is beyond the scope of this article.
243
A BAC U S
uncertainty and produce the intended outcomes. But according to Shields and
Shields (1998), each context variable theoretically can be a cause or a moderator, but
not both. The latter approach thus is incompatible with economic and behavioural
theories.
At the empirical level (Chenhall and Moers, 2007), the three theoretical
approaches imply different correlations of the respective context variables with
participative budgeting or the evaluative use of APM (Baron and Kenny, 1986;
Shields and Shields, 1998; Hartmann and Moers, 1999; Gerdin and Greve, 2004,
2008). Selection and mediation approaches demand significant correlations, because
they assume substantial theoretical relations. But because moderation implies that
the respective context variable is theoretically uncorrelated with participative bud-
geting or the evaluative use of APM, their empirical correlation should be non-
significant too.
Instead, the correlations that emerge from extant findings are inconclusive
(Table 1, columns 4 and 5) and not always consistent with the theory that underlies
the particular study. For example, a positive correlation supports Ezzamel’s (1990)
prediction that environmental uncertainty is an antecedent of participative budget-
ing, but Govindarajan (1986) finds that environmental uncertainty moderates the
participative budgeting–performance relation and indicates a corresponding non-
significant environmental uncertainty–participative budgeting correlation. Lau and
Tan (1998) find a significant task difficulty–participative budgeting correlation,
though they analyze the moderating influence of task difficulty. Then, using a similar
theoretical model, Lau et al. (1995) find that this correlation is non-significant.
As these examples illustrate, the narrative integration of extant findings is diffi-
cult; meta-analysis provides a feasible alternative to achieve clarity regarding the
context variables’ influences by controlling for important statistical artefacts and
providing close estimates of construct-level relations (Hunter and Schmidt, 2004).
The meta-analysis results could indicate three potential categories of relations.5
First, a relation could be homogeneous and significant. Because the mean corre-
lation of a homogeneous relation generalizes across settings, such substantial rela-
tions reflect theories in which the context variable is an antecedent of participative
budgeting or the evaluative use of APM, such as selection and mediation approaches
(Donaldson, 2001; Gerdin and Greve, 2004).6
Second, a relation might be homogeneous but indicate a non-significant correla-
tion, which aligns with at least three competing theoretical explanations (Gerdin and
Greve, 2008). The respective variables could be theoretically unrelated, such that
participative budgeting or the evaluative use of APM should be equally effective at
5
Any interpretation of the meta-analytic findings also must account for the number of studies that get
analyzed, because meta-analyses of small samples of studies offer only low power (Aguinis et al.,
2008).
6
However, a selection approach appears less appropriate, because review articles and meta-analyses
demonstrate meaningful theoretical relations of participative budgeting or the evaluative use of APM
with several outcome variables (e.g., Briers and Hirst, 1990; Greenberg et al., 1994; Hartmann, 2000;
Derfuss, 2009).
244
every level of this context variable. Alternatively, the relations might not be direct
but rather mediated by omitted intervening variables with opposing effects (Luft
and Shields, 2003), which would demand further specification of the theory. Finally,
the context variable might moderate the relations of participative budgeting or the
evaluative use of APM with outcome variables, if two further conditions were met:
The context variable would have to be unrelated to the outcome variable (Baron
and Kenny, 1986), and the outcome relation needs to vary across settings (Schmidt,
1992).7 Whether moderation is a tenable alternative also depends on the outcome
variable being used. For example, several important outcome variables for which
Derfuss (2009) meta-analytically has revealed significant, homogeneous relations
with participative budgeting (e.g., job satisfaction, organizational commitment) and
the evaluative use of APM (e.g., procedural justice, trust) failed to meet the second
condition.
Third, correlations might be heterogeneous, such that the relation is contingent on
a third variable (Schmidt, 1992). In this case, the data do not allow any easy judg-
ment about the influence of the context variable, but meta-analytic moderator
analyses may shed light on possible moderators. Accordingly, the first research
question asks:
RQ1: How are the context variables analyzed in prior studies related to partici-
pative budgeting and the evaluative use of APM?
Sources of Conflict
This study examines potential reasons for variance among the correlations that have
been identified in prior review articles. Specifically, the focus centers on artefactual
influences and moderators pertaining to research design.
Important artefacts identified in prior research include the small samples used in
many studies and the reliability problems of some variables (Briers and Hirst, 1990;
Noeverman et al., 2005). Small samples have two important consequences. First, the
results of complex statistical models, such as those of moderated regression analyses,
are relatively unstable in small samples (Hartmann, 2000), and second, small
samples introduce random between-study variation or sampling error into the
results (Hunter and Schmidt, 2004). Imperfect measurement reliability or measure-
ment error might cause further between-study variance, if different studies measure
the same variable with different levels of reliability (Hunter and Schmidt, 2004). But
the small sample sizes and reliability problems usually are mentioned merely as
additional reasons for conflicts rather than central matters of concern (e.g.,
Hartmann, 2000; Otley and Fakiolas, 2000; Noeverman et al., 2005). In contrast,
meta-analysis literature indicates that research findings might not be as contradic-
tory as they appear, because many conflicts are due to sampling and measurement
7
This condition is absolutely necessary for the strength type of moderation. For some variations of the
form type of moderation, the outcome relation also must change across settings, or else non-monotonic
symmetrical or cross-over and disordinal interaction effects would be impossible (Hartmann and
Moers, 1999; Gerdin and Greve, 2004, 2008).
245
A BAC U S
errors (Schmidt, 1992; Hunter and Schmidt, 2004). Meta-analyses in accounting

reaffirm this claim (Trotman and Wood, 1991; Brierley, 1999; Greenberg et al., 1994).
Furthermore, several research design choices, including construct measurement,
sample selection, and industry influences, could be important sources of conflict
(e.g., Briers and Hirst, 1990; Lindsay, 1995) that might be usefully addressed by a
meta-analysis.
The diversity of construct measurement is a persistent matter of concern. On the
one hand, the measurement of some context variables appears problematic, because
for many variables, different instruments apply, without any assessment of their
convergence (Otley, 1980). For example, comparisons of measures of environmental
uncertainty show inequivalent results pertaining to different operationalizations
(Downey et al., 1975; Tymon et al., 1998), though Withey et al. (1983) find that the
measures of task uncertainty commonly used in budgetary research (Van de Ven and
Delbecq, 1974; Van de Ven and Ferry, 1980; Daft and Macintosh, 1981) actually
converge. On the other hand, the evaluative use of APM causes controversy too
(Briers and Hirst, 1990; Otley and Fakiolas, 2000; Noeverman et al., 2005). Different
measures apply different data collection procedures (e.g., rankings versus ratings,
Hopwood, 1972; Brownell, 1985) and assess different ways to use APM for perfor-
mance evaluations, focused on either the absolute importance accorded to APM
(Brownell, 1985; Hirst, 1983; Van der Stede, 2000) or importance relative to subjec-
tive evaluations (Govindarajan, 1984; Harrison, 1993) or non-financial criteria
(Moers, 2006). Some studies explicitly link the evaluative use of APM to incentive
systems (e.g., Govindarajan, 1984; Moers, 2006; O’Connor et al., 2006; Hartmann and
Slapničar, 2009), whereas this link is only implicit in other measures (e.g., Brownell,
1985). All measures assess the extent of the evaluative use of APM, yet the original
concern voiced by Hopwood (1972) and Otley (1978) was the manner of APM use.
Although all these instruments have been adopted to assess the evaluative use of
APM, their convergent validity seems questionable (Otley and Fakiolas, 2000;
Vagneur and Peiperl, 2000; Noeverman et al., 2005; Derfuss, 2009).
The sample selection and frequency of non-random samples also is open to
criticism (Brownell and Dunk, 1991; Lindsay, 1995; Van der Stede et al., 2005). Lau
et al. (1995) propose that differences in sampling procedures may explain their
failure to replicate Brownell and Hirst’s (1986) results. Random samples ensure that
every element in the population has the same probability of being selected. The
representativeness, external validity, and ensuing generalizability of the results to the
entire population are strong arguments in favour of random sample selection
(Birnberg et al., 1990). Yet carefully selected non-probability samples might help
control for unmeasured influences that otherwise would introduce bias into the
results (Chenhall and Moers, 2007). Using carefully specified models in various
well-known settings thus may help clarify processes of interest (Otley and Pollanen,
2000), though such an approach might hamper the generalizability of findings and
diminish their external validity.
Several studies stress the likely impact of the difference between manufacturing
and service industries (e.g., Lau and Tan, 1998; Otley and Pollanen, 2000). Empirical
evidence underscores this difference; for example, using data from financial service
246
organizations, Lau and Tan (1998) were unable to replicate Brownell and Dunk’s
(1991) results, which are based on data collected from manufacturing companies.
Service providers’ core offering is a service that entails a performance or deed.
Therefore, services are more intangible than manufactured goods, and it is impos-
sible to inventory or display them. Compared with manufacturing, services also are
characterized by a higher degree of customer co-production, in which consumers
participate in service production, usually by providing necessary inputs (Zeithaml
et al., 1985; Edvardsson et al., 2005). Some studies indicate that budgets in service
industries serve as vehicles for information exchange and organizational learning,
rather than performance control and motivation, because service firms demand
information exchange and cannot anticipate outcomes precisely enough to support
evaluation or rewards (Lowry, 1990; Marginson, 1999). Similar to manufacturing
organizations that increase their levels of customization and flexibility (Abernethy
and Lillis, 1995; Bouwens and Abernethy, 2000; Eggert et al., 2014), however, service
companies usually offer a range of services with varying levels of customization to
meet diverse customer demands (Modell, 1996; Bouwens and Abernethy, 2000). The
level of uncertainty also varies with the degree of customization (Modell, 1996). In
this sense, both manufacturing and service companies internalize the challenges of
their respective industries and devise appropriate strategies for coping with their
specific context (Zeithaml et al., 1985; Modell, 1996; Bouwens and Abernethy, 2000).
Industry characteristics thus should moderate the relations of context variables (e.g.,
organization design, environmental uncertainty, task uncertainty) with participative
budgeting or evaluative use of APM (Abernethy and Lillis, 1995; Modell, 1996;
Shields, 1998; Bouwens and Abernethy, 2000).
Furthermore, the distinction between private and public sector organizations
appears influential. First, the influence of political demands is likely stronger in the
public sector, because these organizations must support political ends (Berry et al.,
1985; Hoque and Hopper, 1997; Jermias and Setiawan, 2008). Second, information
systems and reward structures differ in public and private organizations, insofar as
managers are held accountable by different stakeholders, such as top managers
versus politicians, and a broader set of non-financial performance criteria are impor-
tant in the public sector (Brown, 1996; ter Bogt, 2003; Budding, 2004). Third, pro-
fessional socializations by members of organizations (e.g., differences between
administrative and medical staff in hospitals) lead to their dissimilar preferences
regarding the design and use of management accounting systems (Abernethy and
Stoelwinder, 1991; Brown, 1996; Naranjo-Gil and Hartmann, 2006). These influences
might induce different uses of budgets and, at the extreme, reduce budgeting and
associated practices, such as participation or the evaluative use of APM, to ritualistic
but largely disregarded efforts in public sector organizations (Hoque and Hopper,
1997).
As the preceding discussion shows, sampling and measurement error and differ-
ences in construct measurement, sampling procedures, and industries are persistent
matters of concern. Controlling for these influences offers an important step,
because they all might explain differences in correlations across studies.Accordingly,
the second research question is:
247
A BAC U S
RQ2: Which reasons for conflicts discussed in prior literature explain variation
among the correlations: artefacts or the moderating influences of construct
measurement, sampling procedures, or industry differences?
METHOD
Selection and Coding of Studies

A thorough literature search gathered as complete a sample of studies as was
possible. First, relevant review papers were reviewed for appropriate citations (Kren
and Liao, 1988; Birnberg et al., 1990; Briers and Hirst, 1990; Chapman, 1997; Shields
and Shields, 1998; Hartmann, 2000; Dunk, 2001; Chenhall, 2003; Covaleski et al.,
2003; Luft and Shields, 2003; Noeverman et al., 2005; Van der Stede et al., 2005).
Second, additional studies were identified from the selected articles’ reference sec-
tions. Third, all accounting journals listed in a German accounting journal quality
ranking, the VHB-Jourqual,8 as well as Advances in Accounting, Advances in
Accounting Behavioral Research, Advances in International Accounting, and
Advances in Management Accounting, were searched for further studies.9 Fourth,
searches of the Business Source Complete, emeraldinsight, and ScienceDirect elec-
tronic databases used the variable names as keywords.
Studies were included if they met the following criteria: they must have been
published in an international academic journal or scholarly book by the end of 2009,
and they must explicitly refer to participation and performance evaluations in a
budgeting or management accounting context. For example, articles on participative
goal setting or decision making were excluded, because Hofstede (1967) and
Brownell (1982b) indicate that reactions to participation may differ for different
types of goals. The studies also must mirror respondents’ own experiences; other-
wise, the analyses might be biased by perceptual differences (Moers, 2006). For
example, studies using accountants’ (e.g., Shields and Young, 1993; Sharma, 2002) or
top managers’ (e.g., Naranjo-Gil and Hartmann, 2006; Widener et al., 2008) reports
of their organizations’ or their own practices were excluded. Finally, the studies must
be based on survey research. Experimental studies frequently contain simple pro-
duction tasks (e.g., Fisher et al., 2006), rarely comparable to realistic management
situations (Kren and Liao, 1988; Birnberg et al., 1990). Moreover, generalizing
experimental results seems problematic, considering the number of experimental
periods (Lau and Eggleton, 2003; Fisher et al., 2006). The exclusion of experiments
thus ensured a sample that was representative of actual managerial work situations
and provided reliable conclusions (Brown, 1996; Stewart, 2006; Bobko and Roth,
8
The VHB-Jourqual is the journal quality ranking of the German Academic Association for Business
Research. This study uses the subsection on accounting (‘Teilranking Rechnungswesen und Control-
ling’), available at http://vhbonline.org/en/service/jourqual/jq1/teilranking-rechnungswesen-und
-controlling/ (retrieved 13 June 2014).
9
The search also included the tables of contents of Advances in Accounting Education and Advances in
Public Interest Accounting, but they yielded no usable results.
248
2008). Furthermore, effect sizes might depend on how exactly an independent vari-
able is manipulated, such that experimental effects are partly parameter specific. The
integration of results of multivariate analyses of variance into a meta-analysis also
was statistically impossible (Hunter and Schmidt, 2004).
Regarding the correlations to include in the meta-analysis, this study focused on
the content of the variables used, rather than the variable names, because similar
variables frequently appear with different labels (Luft and Shields, 2003). Participa-
tive budgeting is defined as involvement and influence in budget setting, but studies
only measuring influence (e.g., Douglas and Wier, 2000; Jermias and Setiawan, 2008)
also appeared in the analyses, because managers that can influence budgeting deci-
sions necessarily are involved in budgeting. Studies only measuring involvement
(e.g., Yuen, 2004) were excluded though, because involved managers are not always
influential. Regarding culture, only correlations from four studies that used Austra-
lian and Singaporean samples appeared in the analyses (Harrison, 1992; Lau et al.,
1997; Lau and Tan, 1998; Lau and Eggleton, 2004).10 Other studies comparing
different cultures were excluded (Daley et al., 1985; Anyane-Ntow, 1991; Bailes and
Assada, 1991; Ueno and Sekaran, 1992; Ueno and Wu, 1993; Chow et al., 1999; Van
der Stede, 2003). Most did not report correlations, and even if other statistics were
transformed into correlations, the meta-analytic results would no longer be inter-
pretable, because they would relate to different countries. Several further studies
that did not report correlations also did not appear in the sample.11 The sample
selection procedure also excluded studies that used Kendall’s Tau correlations
(Hopwood, 1973, 1974; Ezzamel, 1990; Moores and Sharma, 1998), because their
statistical assumptions would differ from those associated with Pearson or Spearman
correlations (Nunnally, 1978), which can be combined in the meta-analysis (Hunter
and Schmidt, 2004). This selection process resulted in a data set of 53 independent
samples that originally appeared in 72 articles.
The coding of the 53 samples focused on several sample and design characteris-
tics.12 In addition to the primary studies’ correlations, sample sizes, and reliabilities,
10
In these studies, culture was measured as a binary variable, 0 for Australian and 1 for Singaporean
(e.g., Harrison, 1992; Lau et al., 1997). A negative correlation indicates that higher levels of partici-
pative budgeting or the evaluative use of APM are associated more with an Australian than with a
Singaporean national culture.
11
The following studies are excluded (in alphabetical order): Aidemark and Lindkvist (2004), Belkaoui
(1990), Bento and White (2006), Brownell (1982a, 1983, 1985, 1987), Brownell and Hirst (1986),
Budding (2004), Chenhall (1986), Collins (1978), Dunk (1992a), Dunk and Lysons (1997), Frucot and
Shearon (1991), Hansen and Van der Stede (2004), Imoisili (1989), Keating (1997), Linn et al. (2001),
Macintosh and Daft (1987), Maiga (2005), Orpen (1992), Rahman and McCosh (1976), Ross (1995),
Searfoss and Monczka (1973), Seiler and Bartlett (1982), Shields and Shields (1998), Swieringa and
Moncur (1975), and Taylor (1996a, b). An email request, asking for unpublished correlations, sent to
most of the authors of these excluded articles outlined the purpose of the request but prompted
disappointing results. Not all authors replied, and most who did stated that they could not retrieve
their data sets.
12
A trained graduate student and the author coded the data separately, compared their individual
codes, discussed any differences, and corrected them by referring to the respective studies. Full lists of
the samples included in each meta-analysis are available on request.
249
A BAC U S
coding categories referred to each moderating variable. If the respective information

was not reported, the moderator was coded as missing. The coding of the variable
measurement thus relied on information from the studies’ methods sections. The
sampling procedure codes included random or non-random; studies that did not
explicitly indicate random sampling were classified as non-random. Industry could
be coded: (1) as manufacturing, services (including retailing, see Lowry, 1990), or
mixed; and (2) as private, public (including non-profit organizations), or mixed.
Meta-analytic Procedures
Consistent with prior meta-analyses that focus on related topics in accounting and
organization research (e.g., Wagner and Gooding, 1987; Greenberg et al., 1994;
Derfuss, 2009), this study applies the random effects artefact distribution meta-
analysis procedures developed by Hunter and Schmidt (2004), with corrections for
sampling and measurement errors. All calculations use the Comprehensive Meta
Analysis, Version 1.0.23 (Borenstein and Rothstein, 1999), software package. The
artefact distribution procedure first computes the weighted mean correlation (rcum)
across all k studies. To correct for sampling error, the respective correlations are
weighted by the studies’ sample sizes (n). The observed variance between correla-
tion coefficients, corrected for sampling error, and the resulting standard deviation
(SDrcum), then get calculated in the next step. Finally, the rcum and SDrcum are corrected
for measurement error to estimate the weighted mean corrected correlation (ρcum)
and associated standard deviation (SDρcum). Not all studies provide reliability data,
such as Cronbach’s (1951) alpha, so the means of the reliability distributions for the
respective variables (see Appendix) enter into the calculations of ρcum and SDρcum. If
no reliability statistics are reported but the inter-correlations among the items of a
scale are given (e.g., Brownell, 1985), reliability coefficients can be computed with
the Spearman-Brown formula (Hunter and Schmidt, 2004).
Although meta-analytic estimates might be calculated for any relation with k ≥ 2
(Hunter and Schmidt, 2004), better estimates of ρcum and SDρcum can be obtained in
meta-analyses with many samples of relatively large sizes. But this problem is more
severe for SDρcum than ρcum (Hunter and Schmidt, 2004; Carlson and Ji, 2011), and the
estimated SDρcum thus should be interpreted with caution in cases of low k, because
it is uncertain which of the two opposing effects influencing SDρcum is stronger:
Cornwell and Ladd (1993) show in a simulation study that SDρcum gets underesti-
mated, but Hunter and Schmidt (2004) point out that SDρcum gets overestimated in
most practical cases, because it is impossible to account for all artefacts. Notwith-
standing these concerns, a small sample meta-analysis is valuable for the process
control it affords. That is, even if they provide only tentative results, small sample
analyses still constitute the best estimates of the respective effects, indicating what
research has achieved thus far and highlighting unsettled issues that create avenues
for further research (Viswesvaran and Ones, 2002; Carlson and Ji, 2011). The aim
of meta-analysis is not to shut down research on a topic but rather to provoke
further theory development (Schmidt, 1992; Bobko and Roth, 2008; Aguinis et al.,
2011). Therefore, this study reports meta-analytic estimates for every relation with k
≥ 3, because for a result to be reasonably interpreted, Dalton et al. (2003, p. 18)
250
recommend that ‘three studies would seem to be a reasonable minimum’. Moderator

analyses apply to relations with k ≥ 6 and a minimum of k = 3 per subgroup. Because
this scenario implies small subgroup data sets, all the moderator analyses are
exploratory.
To guarantee statistically independent samples, detection of duplicate studies
follows Wood’s (2008) procedure. If publications are based on one data set (e.g., Van
der Stede, 2000, 2001), only the correlation reported for the largest (partial) sample
appears in the analyses.13 If a study contains conceptual replications, such as
subscales for one variable (e.g., Abernethy and Brownell, 1997; Dunk, 1996), com-
posite correlations and their respective reliability coefficients adjust for interdepen-
dence (Hunter and Schmidt, 2004).
This study uses two tests of homogeneity to assess whether included studies
estimate a common population correlation, the 75% rule and a 95% credibility
interval. According to the 75% rule (Koslowsky and Sagie, 1994; Hunter and
Schmidt, 2004), moderating variables should be analyzed only if less than 75% of the
variance can be attributed to artefacts. The 95% credibility intervals instead refer to
a parameter’s observed distribution and are constructed around the ρcum, using
SDρcum. Outliers or moderators might exert some influence if the credibility intervals
are large or include zero. Wide intervals that do not include zero indicate that an
otherwise heterogeneous finding may be generalized, at least in terms of the direc-
tion of the effect (Hunter and Schmidt, 2004). However, caution is necessary when
applying these procedures, because simulation studies consistently reveal high
Type-I error rates and insufficient power for meta-analyses of few studies of small
average sample size (e.g., Sackett et al., 1986; Koslowsky and Sagie, 1993; Sagie and
Koslowsky, 1993; Aguinis et al., 2008). Together though, the procedures allow rela-
tively secure conclusions about homogeneity (Sagie and Koslowsky, 1993; Cortina,
2003). For ρcum to estimate a homogeneous relation, 75% or more of the observed
variance must be attributable to sampling and measurement errors, and the cred-
ibility interval must be narrow and exclude zero unless ρcum is very small (Geyskens
et al., 2009).
Using the standard error of ρcum (SEρcum), calculated with a formula for artefact
distribution-corrected correlations (Hunter and Schmidt, 2004, p. 207), the con-
structed 95% confidence intervals help determine the significance of ρcum. However,
because k is the relevant sample size for computing SEρcum, the respective confidence
intervals might have low power and thus should be interpreted only as approximate,
if the number of studies is small (Cornwell and Ladd, 1993; Hunter and Schmidt,
2004; Schmidt et al., 2009).
13
The following studies analyzed the same data sets, though they used different research questions: (1)
Brownell and Dunk (1991) and Dunk (1993, 1995a, b, 1996); (2) Douglas and Wier (2000, 2005); (3)
Dunk (1992a, b); (4) Govindarajan (1984), Govindarajan and Gupta (1985), Gupta and Govindarajan
(1986), and Gupta (1987); (5) Harrison (1992, 1993); (6) Hassel (1991) and Hassel and Cunningham
(1993, 1996, 2004); (7) Kren (2003) and Kren and Maiga (2007); (8) Lal et al. (1996) and Dunk and Lal
(1999); (9) Lau and Eggleton (2003, 2004); (10) Lau et al. (1995, 1997); (11) Merchant (1981, 1984,
1985), Brownell and Merchant (1990), and Hughes and Kwon (1990); (12) Van der Stede (2000, 2001,
2003); and (13) Williams et al. (1990), Macintosh and Williams (1992), and Williams and Liu (1995).
251
A BAC U S
Hunter and Schmidt (2004) recommend using hierarchical moderator analyses to

assess the moderating variables sequentially. But to avoid capitalization on chance
and second-order sampling error, which stems from sampling studies for the meta-
analysis, they recommend these analyses only for relations with relatively large k (see
Aguinis et al., 2011). The full sample can be divided into subgroups, corresponding to
the first moderator’s categories, with separate meta-analyses performed on each
subgroup. If a considerable amount of variance remains unexplained in one subgroup,
it is submitted to further analysis.A moderating influence reveals itself through: (1) a
marked difference between the subgroup ρcum; and (2) a lower average corrected
variance (and also SDρcum) across subgroups than in the overall analysis. Confidence
intervals around the difference of the subgroup ρcum (Hunter and Schmidt, 2000),
together with a Šidák correction to adjust α to an overall level of 0.05 for comparisons
of multiple categories (Abdi, 2007), provide the formal test of subgroup differences.
The caveat regarding a small k also applies to these confidence intervals.
Two further issues merit attention: quality of publication outlet and level of
analysis. First, this meta-analysis is based exclusively on published research, so it
might be affected by publication bias and exclude studies with correlations equal to
zero that remain unpublished due to reviewers’ and editors’ biases toward positive
hypothesis tests (Lindsay, 1994; Pomeroy and Thornton, 2008). To address this issue
methodologically, a fail-safe n (nfs) displays the number of missing studies with null
findings that would be needed to reduce the estimated ρcum to a critical level of 0.04
(Hunter and Schmidt, 2004). This value cannot be rounded to a small effect size (i.e.,
r = 0.10), as Cohen (1988) expects for many relations in social sciences. In addition,
journal quality provides a supplemental measure of the possibility of a publication
bias. If effects reported in lower quality journals differ substantially from those in
higher quality journals, correlations from unpublished research likely differ even
more from those in higher quality journals. Also, higher quality journals should
provide better quality study design and execution and thus more robust findings.
However, some articles might appear in better journals simply because of first-
mover advantages, with replications published in less prestigious journals or remain-
ing unpublished (Hay et al., 2006). For this analysis, this study uses two binary
proxies and codes journals as either quality or other. Samples are categorized with
reference to the highest quality journal, if publications are based on one sample (e.g.,
Wentzel, 2002, 2004; Parker and Kyj, 2006; Kyj and Parker, 2008; also see footnote
13). For the first proxy (SSCI/Jourqual), journals included in the Social Science
Citation Index (SSCI, e.g., Management International Review) or with A+, A, or B
rankings in VHB-Jourqual (e.g., Abacus or Accounting, Organizations and Society)
represent quality journals. For the second proxy (high-quality), the list of high-
quality journals used by Hay et al. (2006) is adapted to a management accounting
context,14 such that Accounting, Organizations and Society, Behavioral Research in
14
For their analyses, Hay et al. (2006) include Auditing: A Journal of Practice and Theory, Contemporary
Accounting Research, Journal of Accounting and Economics, Journal of Accounting Research, and The
Accounting Review as high quality. No studies published in Contemporary Accounting Research and
the Journal of Accounting and Economics appear in the current analysis.
252
Accounting, Journal of Accounting Research, Journal of Management Accounting

Research, Journal of International Accounting Research, Management Accounting
Research, and The Accounting Review represent quality journals.
Second, some selected studies ask respondents to provide organizational-level
responses, such as assessing their organization’s use of participative budgeting or
evaluative use of APM (Douglas and Wier, 2000, 2005; O’Connor et al., 2006;
Douglas et al., 2007), whereas others call for individual-level responses. To judge the
influence of the level of analysis, the meta-analytic findings appear both with and
without the related correlations.
RESULTS
Overall Effects
Tables 2 and 3 summarize the bivariate results. Unlike other meta-analyses (e.g.,
Brown, 1996; Stewart, 2006), all these results indicate small samples of three to nine
correlations. Although small samples are not uncommon in meta-analyses in
accounting (Brierley, 1999; Pomeroy and Thornton, 2008), this result is nevertheless
striking, considering the volume of empirical research on participative budgeting
and the evaluative use of APM (Shields and Shields, 1998; Hartmann, 2000). For this
study, estimates of ρcum of 0.10, 0.30, and 0.50 are small, medium, and large, respec-
tively, in line with Cohen (1988).
Table 2 summarizes the results for eleven context variable–participative budget-
ing relations, sorted by the four categories of influence (i.e., cultural, organizational,
interpersonal, and individual context variables) outlined by Brownell (1982b). For
three relations, more than 75% of the variance can be attributed to artefacts, and all
credibility intervals are sufficiently narrow; the correlations thus seem to generalize
across contexts. The bulk of the explained variance, up to 100%, can be attributed to
sampling error, whereas measurement error is less important. Regarding the orga-
nizational variables, the ρcum for environmental uncertainty (ρcum = −0.010, k = 7) and
task uncertainty (ρcum = 0.064, k = 5) are not significant, whereas for the interpersonal
variables, the ρcum for consideration (ρcum = 0.387; k = 3) is medium, significant, and
positive.
Conversely, participative budgeting appears heterogeneously related to eight
context variables; the artefact-related variance is less than 50% for all analyses, and
the wide credibility intervals include zero in all but one case. First, regarding the
heterogeneous relation with culture (ρcum = −0.107, SDρcum = 0.085, k = 4), the upper
bound of the credibility interval is small (95% CrI: −0.274, 0.060), so only negative
and non-significant subgroups likely result from moderator analyses. Second, for the
organizational variables, between-correlation variance occurs for ρcum for decentral-
ization (ρcum = 0.295, SDρcum = 0.272, k = 6), hierarchical level (ρcum = 0.264, SDρcum =
0.091, k = 4), and task difficulty (ρcum = 0.123, SDρcum = 0.156, k = 9). Because the
credibility interval excludes zero (95% CrI: 0.086, 0.442), the strength, but not the
direction, of the hierarchical level–participative budgeting correlations varies across
potential subpopulations. Third, the relation with the interpersonal variable of
information asymmetry (ρcum = 0.276, SDρcum = 0.289, k = 8) is heterogeneous, but
253
Table 2
META-ANALYSIS RESULTS FOR CONTEXT VARIABLE–PARTICIPATIVE BUDGETING RELATIONS
Relation k1 N rcum SDrcum VarSE ρcum2 SDρcum 95% CI 95% CrI % Var. nfs SEρcum
unacc.
lower upper lower upper
Cultural variables
Culture 4 700 −0.099 0.109 47.499 −0.107 0.085 −0.222 0.008 −0.274 0.060 52.329 7 0.059
Organizational variables
Decentralization 6 409 0.233 0.247 21.915 0.295* 0.272 0.045 0.545 −0.238 0.828 77.445 38 0.128
Environmental uncertainty 7 406 −0.007 0.117 100.000 −0.010+ 0.000 −0.134 0.114 −0.010 −0.010 0.000 0 0.063
Hierarchical level 4 656 0.243 0.113 42.768 0.264*+ 0.091 0.144 0.384 0.086 0.442 56.260 22 0.061
Task uncertainty 5 774 0.051 0.086 87.067 0.064 0.038 −0.031 0.159 −0.010 0.138 12.652 3 0.048

Task difficulty 9 1233 0.095 0.149 32.313 0.123 0.156 −0.003 0.249 −0.183 0.429 67.112 19 0.064
254
Interpersonal variables
A BAC U S
Consideration 3 237 0.335 0.072 100.000 0.387*+ 0.000 0.293 0.481 0.387 0.387 0.000 26 0.048
Information asymmetry 8 895 0.220 0.251 12.957 0.276* 0.289 0.058 0.494 −0.290 0.842 86.752 47 0.111
excl. Douglas and Wier 6 533 0.116 0.280 14.156 0.143 0.315 −0.133 0.419 −0.474 0.760 85.805 15 0.141
(2000, 2005)
Individual variables
Ethical idealism 4 662 0.123 0.185 17.155 0.162 0.219 −0.077 0.401 −0.267 0.591 82.660 12 0.122
Ethical relativism 4 662 0.054 0.265 8.614 0.072 0.333 −0.274 0.418 −0.581 0.725 91.368 3 0.177
Locus of control 5 657 −0.154 0.124 47.644 −0.199* 0.114 −0.339 −0.059 −0.422 0.024 52.030 20 0.072
Notes:
1. k is the number of correlations per relation; N is the total number of respondents across k samples; rcum is the weighted mean correlation; SDrcum is the
standard deviation for rcum; VarSE is the percentage of variance attributed to sampling error; ρcum is the weighted mean correlation corrected for artefacts;
SDρcum is the standard deviation for the estimated ρcum; CI is the confidence interval; CrI is the credibility interval; % Var. unacc. is the percentage of
unexplained variance in correlations; nfs is the fail-safe n; and SEρcum is the standard error for the estimated ρcum.
2. * The 95% confidence interval does not include 0.000. + The 95% credibility interval does not include 0.000.
Table 3
META-ANALYSIS RESULTS FOR CONTEXT VARIABLE–EVALUATIVE USE OF APM RELATIONS
Relation k1 N rcum SDrcum VarSE ρcum2 SDρcum 95% CI 95% CrI % Var. nfs SEρcum
unacc.
lower upper lower upper
Cultural variables
Culture 4 700 −0.083 0.073 100.000 −0.100*+ 0.000 −0.186 −0.014 −0.100 −0.100 0.000 6 0.044
Organizational variables
Company size 3 695 0.041 0.048 100.000 0.048+ 0.000 −0.016 0.112 0.048 0.048 0.000 1 0.032
excl. O’Connor et al. 2 193 0.029 0.089 100.000 0.034+ 0.000 −0.111 0.179 0.034 0.034 0.000 0 0.074
(2006)
255
Decentralization 3 681 0.163 0.157 17.071 0.206 0.179 −0.019 0.431 −0.145 0.557 82.748 12 0.115
excl. O’Connor et al. 2 179 −0.100 0.014 100.000 −0.113*+ 0.000 −0.135 −0.091 −0.113 −0.113 0.000 4 0.011
(2006)
Environmental uncertainty 7 564 0.055 0.270 17.102 0.080 0.350 −0.211 0.371 −0.606 0.766 82.837 7 0.148
Strategy 4 404 0.040 0.173 33.433 0.058 0.202 −0.188 0.304 −0.338 0.454 66.557 2 0.125
Task uncertainty 5 587 −0.148 0.080 100.000 −0.212*+ 0.000 −0.312 −0.112 −0.212 −0.212 0.000 22 0.051
Task difficulty 7 897 −0.164 0.049 100.000 −0.230*+ 0.000 −0.281 −0.179 −0.230 −0.230 0.000 33 0.026
Unit size 3 379 0.085 0.073 100.000 0.093*+ 0.000 0.003 0.183 0.093 0.093 0.000 4 0.046
Notes:
1. k is the number of correlations per relation; N is the total number of respondents across k samples; rcum is the weighted mean correlation; SDrcum is the
standard deviation for rcum; VarSE is the percentage of variance attributed to sampling error; ρcum is the weighted mean correlation corrected for artefacts;
SDρcum is the standard deviation for the estimated ρcum; CI is the confidence interval; CrI is the credibility interval; % Var. unacc. is the percentage of
unexplained variance in correlations; nfs is the fail-safe n; and SEρcum is the standard error for the estimated ρcum.

A BAC U S
additional analysis is necessary to exclude two organizational-level correlations

(Douglas and Wier, 2000, 2005). It results in a smaller ρcum with a large SDρcum (ρcum
= 0.143, SDρcum = 0.315, k = 6), which might indicate an influence of the level of
analysis, or else could result from a variable measurement effect. Specifically,
Douglas and Wier (2000, 2005) combine measures from Onsi (1973) and Jaworski
and Young (1992) to assess information asymmetry and integrate items from Onsi
(1973) and Merchant (1981) to measure participative budgeting. In contrast, the six
individual-level studies measure these variables using Dunk’s (1993) information
asymmetry and Milani’s (1975) participative budgeting items. Considering this dif-
ference in the results, only the latter group enters the moderator analyses, to avoid
any confounding level-of-analysis influence. Finally, heterogeneous relations emerge
for the individual variables of ethical idealism (ρcum = 0.162, SDρcum = 0.219, k = 4),
ethical relativism (ρcum = 0.072, SDρcum = 0.333, k = 4), and locus of control (ρcum =
−0.199, SDρcum = 0.114, k = 5). For locus of control, only negative and non-significant
subgroups are probable because the upper bound of the credibility interval is just
positive (95% CrI: −0.422, 0.024).
Table 3 summarizes the results for eight relations between context variables and
the evaluative use of APM. For five analyses, the bulk of the variance derives from
statistical artefacts, with up to 100% of the variance attributed to sampling error,
whereas measurement error is less important. The credibility intervals support
homogeneity, and the relations generalize across contexts. The evaluative use of
APM relates negatively to culture (ρcum = −0.100, k = 4), with a small and significant
ρcum. For the organizational variables of task uncertainty (ρcum = −0.212, k = 5) and
task difficulty (ρcum = −0.230, k = 7), the ρcum are small, negative, and significant,
whereas for unit size, ρcum is small, positive, and just significant (ρcum = 0.093, k = 3,
95% CI: 0.003, 0.183). For company size, ρcum is not significant, regardless of
whether O’Connor et al.’s (2006) organizational-level study is included (ρcum =
0.048, k = 3) or not (ρcum = 0.034, k = 2). Therefore, the level of analysis does not
appear influential.
However, the respective homogeneity statistics suggest that significant heteroge-
neity affects the relations of the evaluative use of APM with the organizational
variables of decentralization (ρcum = 0.206, SDρcum = 0.179, k = 3), environmental
uncertainty (ρcum = 0.080, SDρcum = 0.350, k = 7), and strategy (ρcum = 0.058, SDρcum
= 0.202, k = 4). Decentralization is a special case though, insofar as the level of
analysis appears to influence this relation. Excluding the organizational-level study
(O’Connor et al., 2006), reveals a small, negative, and significant value (ρcum =
−0.113, SDρcum = 0.000, k = 2), with all variance attributable to sampling error.
However, this result might be driven by the study’s sample size (n = 502) or mea-
surement or cultural differences, because the measurement of the variables differs
across studies. O’Connor et al. (2006) also use data from Chinese state-owned
enterprises, whereas the other studies (Gupta, 1987; Govindarajan, 1988) focus on
private US companies.
In summary, in response to RQ1, the relations of some context variables with
either participative budgeting or the evaluative use of APM appear homogeneous,
with significant or non-significant ρcum, but other relations are heterogeneous.
256
Regarding RQ2, the variance in the homogeneous relations can be attributed

entirely to artefacts, whereas the heterogeneous relations might be affected by
moderators.
Moderator Analyses
Most heterogeneous findings are based on small k, so moderator analyses in prin-
ciple are only feasible for the four relations for which k ≥ 6. But in all the analyses
of the decentralization–participative budgeting (k ≥ 6) and environmental
uncertainty–evaluative use of APM (k ≥ 7) relations, at least one subgroup would be
too small for analysis (k = 2), so no moderator analyses are possible for these
relations. Moreover, no analysis is possible for differences between private and
public sector organizations, because no subgroups can be formed for this difference.
Table 4 reports the corresponding findings.
First, neither the measurement of task difficulty with Daft and Macintosh’s (1981)
(ρcum = 0.198, SDρcum = 0.086, k = 3, subgroup 1) versus Van de Ven and Delbecq’s
(1974) (ρcum = 0.068, SDρcum = 0.203, k = 4, subgroup 2) items nor random (ρcum =
0.169, SDρcum = 0.103, k = 6, subgroup 3) versus non-random (ρcum = −0.051, SDρcum =
0.199, k = 3, subgroup 4) sampling moderates the task difficulty–participative bud-
geting relation. The respective subgroup ρcum differ, but not significantly, because the
confidence intervals around their differences include zero (95% CIdiff (1)–(2):
−0.144, 0.404; 95% CIdiff (3)–(4): −0.085, 0.525). The SDρcum also do not average
markedly lower across the respective subgroups than in the overall analysis (SDρcum
= 0.156). In contrast, differences between manufacturing and service industries
moderate this relation. The ρcum for mixed industries (i.e., subgroup 4) is non-
significant (ρcum = −0.051, k = 3), and the SDρcum is high (SDρcum = 0.199). For
manufacturing industries (subgroup 5), the ρcum is homogeneous but not significant
(ρcum = 0.017, k = 3), whereas the ρcum for service industries (subgroup 6) is homo-
geneous, significant, positive, and of medium strength (ρcum = 0.286, k = 3).The SDρcum
average is considerably lower across these subgroups than in the overall analysis.
Moreover, the confidence interval around the difference between ρcum for subgroups
5 and 6 excludes zero (95% CIdiff (5)–(6): −0.395, −0.143), whereas those for
subgroups 4 and 5 (95% CIdiff (4)–(5): −0.416, 0.280) and for subgroups 4 and 6
(95% CIdiff (4)–(6): −0.700, 0.026) both include zero. This latter finding is not
unexpected though, because subgroup 4 summarizes mixed industry samples.
Second, for the information asymmetry–participative budgeting relation, all
individual-level studies measure the variables with Dunk’s (1993) and Milani’s
(1975) items, so no subgroups can be formed. Sample selection appears to moderate
this relation, however, because the ρcum differ markedly for random (ρcum = 0.339,
SDρcum = 0.134, k = 3) versus non-random (ρcum = −0.202, SDρcum = 0.251, k = 3)
samples. The confidence interval around the difference between the ρcum excludes
zero (95% CIdiff (1)–(2): 0.153, 0.929), and the SDρcum also are considerably lower on
average across the subgroups than in the overall analysis. However, the SDρcum are
still large, and subgroup 1 contains one study from a service industry and two from
manufacturing settings, whereas subgroup 2 combines studies using mixed industry
samples with a study from a service industry. Therefore, sample selection might not
257
Table 4
EXPLORATORY MODERATOR ANALYSES
Relation1 k2 N rcum SDrcum VarSE ρcum3 SDρcum 95% CI 95% CrI % Var. nfs SEρcum 95% CIdiff
unacc.
lower upper lower upper comp. lower upper
Task difficulty–Participative budgeting 9 1233 0.095 0.149 32.313 0.123 0.156 -0.003 0.249 -0.183 0.429 67.112 19 0.064
(1) Daft and Macintosh (1981)–Milani 3 372 0.166 0.115 58.411 0.198*+ 0.086 0.043 0.353 0.029 0.367 40.979 12 0.079 (1)–(2) −0.144 0.404
(1975)
(2) Van de Ven and Delbecq 4 647 0.050 0.169 21.691 0.068 0.203 −0.157 0.293 −0.330 0.466 78.223 3 0.115
(1974)–Milani (1975)

(3) random 6 960 0.133 0.114 46.646 0.169* 0.103 0.053 0.285 −0.033 0.371 51.811 19 0.059 (3)–(4) −0.085 0.525
258
(4) non-random/industry mix 3 273 −0.037 0.181 33.870 −0.051 0.199 −0.333 0.231 −0.441 0.339 66.070 1 0.144 (4)–(5) −0.416 0.280
A BAC U S
(5) manufacturing, based on (3) 3 403 0.014 0.031 100.000 0.017+ 0.000 −0.026 0.060 0.017 0.017 0.000 0 0.022 (5)–(6) −0.395 −0.143
(6) services, based on (3) 3 557 0.219 0.064 100.000 0.286*+ 0.000 0.191 0.381 0.286 0.286 0.000 18 0.048 (4)–(6) −0.700 0.026
Information asymmetry–Participative 6 533 0.116 0.280 14.156 0.143 0.315 −0.133 0.419 −0.474 0.760 85.805 15 0.141
budgeting
(1) random 3 340 0.276 0.141 38.054 0.339*+ 0.134 0.143 0.535 0.076 0.602 61.092 22 0.100 (1)–(2) 0.153 0.929
(2) non-random 3 193 −0.164 0.240 25.990 −0.202 0.251 −0.537 0.133 −0.694 0.290 73.905 12 0.171
Notes:
1. Lines in bold repeat meta-analyses for the full sample, as reported in Tables 2 and 3. Lines in italics denote subsamples submitted to further analyses.
2. k is the number of correlations per relation; N is the total number of respondents across k samples; rcum is the weighted mean correlation; SDrcum is the standard deviation for
rcum; VARSE is the percentage of variance attributed to sampling error; ρcum is the weighted mean correlation corrected for artefacts; SDρcum is the standard deviation for the
estimated ρcum; CI is the confidence interval; CrI is the credibility interval; % Var. unacc. is the percentage of unexplained variance in correlations; nfs is the fail-safe n; SEρcum is
the standard error for the estimated ρcum; CIdiff is the confidence interval around the difference of the ρcum; and comp. indicates the respective comparison.
be the most important moderator; instead, industry differences might help explain
the heterogeneity. However, because all possible subgroups would consist of only
two studies, no analysis of industry differences is possible for this relation.
Table 5 provides the results regarding journal quality differences. Journal quality
does not emerge as an important influence, nor can it explain heterogeneity. Again,
no analyses are possible for the decentralization–participative budgeting and envi-
ronmental uncertainty–evaluative use of APM relations, because in all the analyses,
at least one subgroup would be too small for analysis. For the task difficulty–
participative budgeting relation, the ρcum for the SSCI/Jourqual subgroups differ
(ρcum = 0.051, k = 6 for subgroup 1; ρcum = 0.253, k = 3 for subgroup 2), and the SDρcum
average is lower across the subgroups than in the overall analysis. But the confidence
interval for the difference between the ρcum barely excludes zero (95% CIdiff (1)–
(2): −0.384, −0.020), and the wide credibility interval of subgroup 1 contains zero
(95% CrI: −0.272, 0.374), as well as the ρcum of subgroup 2. Moreover, for the
high-quality proxy, the subgroup ρcum (ρcum = 0.146, k = 3 for subgroup 3; ρcum = 0.110,
k = 6 for subgroup 4) do not differ significantly (95% CIdiff (3)–(4): −0.221, 0.293),
and the SDρcum also do not average markedly lower across the subgroups than in the
overall analysis. The previously described moderating effect of industry differences
thus better explains the existing heterogeneity. For the information asymmetry–
participative budgeting relation, similar to the moderator analysis detailed previ-
ously, this analysis only uses the six individual-level studies, to avoid any
confounding level-of-analysis influence. The SDρcum average is lower across the sub-
groups than in the overall analysis, but the difference between the subgroup ρcum is
not significant (ρcum = 0.024, k = 3 for subgroup 1; ρcum = 0.224, k = 3 for subgroup 2;
95% CIdiff (1)–(2): −0.688, 0.288). Therefore, the previously described moderating
influence of sample selection better explains the between-correlation variation.
Finally, for all homogeneous relations with significant ρcum reported in Tables 2 to
4, the nfs are larger than k; that is, quite a lot of unpublished studies with a trivial ρcum
would be needed to overturn the present findings. A similar conclusion is impossible
for heterogeneous relations though, because the calculation of the nfs cannot incor-
porate heterogeneity (Hunter and Schmidt, 2004).
In summary, in response to RQ2, the findings show that of the four moderators
proposed, sample selection likely moderates the information asymmetry–
participative budgeting relation, whereas industry differences between manufactur-
ing and service industries influence the task difficulty–participative budgeting
relation.
DISCUSSION AND LIMITATIONS
This study provides an initial meta-analysis of the correlations between frequently

studied context variables and either participative budgeting or the evaluative use of
APM. In line with Brownell (1982b), context variables fall into the four categories of
cultural, organizational, interpersonal, and individual variables. Prior evidence indi-
cates that context variables’ influences vary across studies (e.g., Chapman, 1997;
Shields and Shields, 1998; Otley and Fakiolas, 2000; Chenhall, 2003), though these
259
Table 5
ANALYSIS OF PUBLICATION QUALITY
Relation1 k2 N rcum SDrcum VarSE ρcum3 SDρcum 95% CI 95% CrI % Var. nfs SEρkum 95% CIdiff
unacc.
lower upper lower upper comp. lower upper
Task difficulty–Participative budgeting 9 1233 0.095 0.149 32.313 0.123 0.156 −0.003 0.249 −0.183 0.429 67.112 19 0.064
(1) SSCI/Jourqual: quality 6 786 0.040 0.158 30.795 0.051 0.165 −0.110 0.212 −0.272 0.374 69.131 2 0.082 (1)–(2) −0.384 −0.020
(2) SSCI/Jourqual: other 3 447 0.192 0.056 100.000 0.253*+ 0.000 0.169 0.337 0.253 0.253 0.000 16 0.043

(5) High-quality: quality 3 462 0.112 0.135 35.127 0.146 0.139 −0.053 0.345 −0.126 0.418 64.048 8 0.102 (3)–(4) −0.221 0.293
260
(6) High-quality: other 6 771 0.085 0.157 31.417 0.110 0.165 −0.053 0.273 −0.213 0.433 68.163 11 0.083
A BAC U S
Information asymmetry–Participative 6 533 0.116 0.280 14.156 0.143 0.315 −0.133 0.419 −0.474 0.760 85.805 15 0.141
budgeting
(1) High-quality: quality 3 216 0.019 0.074 100.000 0.024+ 0.000 −0.082 0.130 0.024 0.024 0.000 0 0.054 (1)–(2) −0.688 0.288
(2) High-quality: other 3 317 0.182 0.342 7.628 0.224 0.399 −0.252 0.700 −0.558 1.006 92.308 14 0.243
Notes:
1. Lines in bold repeat meta-analyses as reported in Table 2.
2. k is the number of correlations per relation; N is the total number of respondents across k samples; rcum is the weighted mean correlation; SDrcum is the standard deviation for
rcum; VARSE is the % of variance attributed to sampling error; ρcum is the weighted mean correlation corrected for artefacts; SDρcum is the standard deviation for the estimated ρcum;
CI is the confidence interval; CrI is the credibility interval; % Var. unacc. is the percentage of unexplained variance in correlations; nfs is the fail-safe n; SEρcum is the standard error
for the estimated ρcum; CIdiff is the confidence interval around the difference of the ρcum; and comp. indicates the respective comparison.
variables were introduced to solve prior conflicts regarding the relations of partici-
pative budgeting or the evaluative use of APM with outcome variables (Brownell,
1982b; Otley, 1980; Hirst, 1981). To address this problem meta-analytically, this study
asks, first, how the context variables relate to participative budgeting or the evalu-
ative use of APM and, second, which drivers explain between-study variation of the
correlations. In so doing, it complements existing meta-analyses that have focused on
the outcomes of participative budgeting or the evaluative use of APM (Greenberg
et al., 1994; Derfuss, 2009), and it updates earlier review articles (e.g., Briers and
Hirst, 1990; Shields and Shields, 1998; Hartmann, 2000).
The first important finding is that only three to nine correlations exist for all
relations. After several decades of study, this finding is extremely disconcerting. The
small samples of correlations clearly show that research on how context variables
relate to participative budgeting or the evaluative use of APM remains ‘embryonic’
(Otley and Pollanen, 2000, p. 494; also see Lindsay and Ehrenberg, 1993), rather than
offering an ‘organized critical mass of empirical work’ (Brownell and Dunk, 1991,
p. 703). Moreover, for all four categories of context variables (i.e., cultural, organi-
zational, interpersonal, and individual), the selection of variables appears piecemeal.
With few exceptions regarding the organizational context (Bruns and Waterhouse,
1975; Merchant, 1981, 1984), no category has been studied systematically. Despite
extant calls (Lindsay and Ehrenberg, 1993), replication also is still an exception,
rather than a common practice. In addition, the attainment of cumulative knowledge
has been restricted by repeated uses of data sets (see footnote 13), leading to
duplicate correlations. This lack of cumulative and generalizable knowledge even
might explain practitioners’ lack of interest in, and criticisms of, research findings
(Hansen et al., 2003). From a methodological point of view, these small samples of
correlations likely affect the stability of the meta-analytic estimates, which makes
only tentative inferences possible. Because they provide the best possible estimate of
what research has achieved so far though (Viswesvaran and Ones, 2002; Carlson and
Ji, 2011), small sample meta-analyses are valuable. They also may give impetus to
further theory development and research (Bobko and Roth, 2008; Aguinis et al.,
2011). Although additional research is needed for all relations, the continuing impor-
tance of participative budgeting and the evaluative use of APM (Anderson et al.,
2010; Libby and Lindsay, 2010) means that the meta-analytic findings offer key
implications, significant challenges, and open questions to resolve.
In particular, these findings suggest three groups of relations: homogeneous rela-
tions that are either significant or not and heterogeneous relations. The eight homo-
geneous relations show that sampling and measurement errors are important drivers
of conflict, a result that complements findings by Greenberg et al. (1994) and Derfuss
(2009) and that is consistent with other meta-analyses in accounting (e.g., Trotman
and Wood, 1991; Brierley, 1999). Sampling and measurement error thus should be
included in discussions of any new findings that appear inconsistent with prior
results. However, in line with extant findings (e.g., Shields and Shields, 1998;
Hartmann, 2000; Derfuss, 2009), 13 relations remain heterogeneous, even after
controlling for sampling and measurement errors. This implies that these relations
are contingent on other influences that condition their strength and direction.
261
A BAC U S
Despite prior studies’ proposals of reasons for this heterogeneity, including con-
struct measurement, sample selection, and industry influences (e.g., Briers and Hirst,
1990; Lindsay, 1995; Shields, 1998), most available data sets simply are too small to
perform moderation analyses. Further clarification of the heterogeneity of many
relations must await more studies.
Regarding participative budgeting, with comparatively large data sets, this study
shows that it is not significantly associated with either environmental (ρcum = −0.010,
k = 7) or task (ρcum = 0.064, k = 5) uncertainty. This result contradicts Shields and
Shields (1998), who draw on economic and psychological theory to specify environ-
mental and task uncertainty as important antecedents of participative budgeting.
The non-significant correlations might indicate that these relations are not simple,
direct effects. First, they might be mediated by other variables, such as strategy,
organizational structure, information asymmetry, or leadership style, but with oppos-
ing indirect effects (e.g., Tymon et al., 1998; Luft and Shields, 2003), such that any
theory focused only on the direct effects would be underspecified.
Second, these non-significant relations might reflect averages of the specific influ-
ences of both uncertainty variables’ dimensions in different industries. Challenging
the non-significant relation with environmental uncertainty, Hoque and Hopper
(1997) find positive, non-significant, and negative correlations of participative bud-
geting with environmental factors, such as politics, industrial relations, competition,
and regulation. Similarly, Chong and Johnson (2007) and Williams et al. (1997) both
report non-significant correlations of participative budgeting with task difficulty, but
for task variability, their correlations are negative and non-significant, respectively.
Together with the industry influence on the task difficulty–participative budgeting
relation revealed in the moderator analysis, these findings contest the non-significant
task uncertainty–participative budgeting relation.
Third, inconsistent with economic and psychological theories (Shields and
Shields, 1998), the non-significant findings also might suggest that environmental
or task uncertainty moderate participative budgeting–outcome relations (e.g.,
Govindarajan, 1986; Brownell and Dunk, 1991; Lau et al., 1995). Yet moderation is
not only inconsistent with theory but also generally not plausible: it would demand
that the outcome relations vary across settings (Schmidt, 1992), but Derfuss (2009)
meta-analytically derives homogeneous, significant relations of participative budget-
ing with important outcome variables, such as job satisfaction, organizational com-
mitment, and role ambiguity. In summary, instead of just exploring the relations of
environmental and task uncertainty with participative budgeting, additional studies
should analyze the influences of different dimensions of both uncertainty constructs,
as well as the mediating effects of other contextual variables, to help explain the
non-significant overall effects.
Moreover, the moderator analysis of industry influences suggests that task diffi-
culty is an antecedent of participative budgeting in service (ρcum = 0.286, k = 3) but
not manufacturing (ρcum = 0.017, k = 3) industries, because the mean correlation is
homogeneous and positive for the former industry subgroup and homogeneous but
not significant for the latter. Industry differences thus should be included as bound-
ary conditions on any related theory. On the one hand, service organizations seem to
262
rely on the budget setting process to cope with task difficulty more than manufac-
turing firms, perhaps because service managers lack other resources that would
enable them to solve difficult tasks, such as inventories (Lau and Tan, 1998). Instead
of the budgeting system, managers in manufacturing organizations can use the
operational target setting process to handle task difficulty. On the other hand,
because some studies use respondents from different functional areas (e.g., Lau
et al., 1997; Lau and Buckland, 2000), the non-significant relation for the manufac-
turing sample might just as easily result from averaging across managerial functions
(see Brownell, 1985; Dunk, 1995a). That is, in manufacturing organizations, mana-
gerial tasks differ inherently across functional areas, such as marketing or produc-
tion (Dunk, 1995a; Subramaniam and Mia, 2003), and thus the task difficulty–
participative budgeting relation also may vary across managerial functions. To
establish which of these competing interpretations accounts for the moderating
influence, ongoing studies should address various managerial functions in different
industries and report correlations by function and industry.
Regarding the interpersonal context variables, this study indicates that superiors’
consideration, a dimension of leadership style, is an important antecedent of partici-
pative budgeting, according to their positive, homogeneous relation (ρcum = 0.387).
Considerate superiors actively encourage and achieve higher participation (Kyj and
Parker, 2008). Modelling participative budgeting as a moderator of a consideration–
outcome variable relation (e.g., Brownell, 1983) thus fails to receive meta-analytical
support. Yet again, the small data set (k = 3) suggests that further studies are
necessary to substantiate this finding.
For the information asymmetry–participative budgeting relation, influences of
random (ρcum = 0.339, SDρcum = 0.134, k = 3) versus non-random (ρcum = −0.202, SDρcum
= 0.251, k = 3) sample selection partly explain the heterogeneity in the overall
analysis of the individual-level correlations. Caution thus is warranted, if this rela-
tion is studied among non-random samples, because of the limited generalizability of
the findings. However, this finding also needs to be placed in context: Both sub-
groups are very heterogeneous, so sample selection is neither the only nor the most
important moderator. Because it is not observed for the task difficulty–participative
budgeting relation, random versus non-random sample selection also does not affect
different context variables systematically. Thus, a substantial clarification of the
influence of sample selection on the information asymmetry–participative budgeting
relation requires further studies that systematically compare both random and non-
random samples in different industries, because too few correlations are currently
available for sufficient analyses of industry differences.
Regarding the evaluative use of APM, it is weaker in Singapore than in Australia,
as indicated by the significant, negative national culture correlation (ρcum = −0.100, k
= 4). Therefore, in line with comparative studies of other cultures, such as the US and
Japan (e.g., Daley et al., 1985; Chow et al., 1999), culture seems to determine the
degree of the evaluative use of APM rather than to moderate its outcomes.
For participative budgeting, the cultural influence is similar but appears less impor-
tant, because the relation is also negative but heterogeneous (ρcum = −0.107,
SDρcum = 0.085, k = 4), with a small positive upper bound of the credibility interval
263
A BAC U S
(95% CrI: −0.274, 0.060). That is, this cultural effect likely is non-significant in some
circumstances that future studies might illuminate. But evidence of cultural influ-
ences is still relatively scarce, and many countries remain completely ignored, which
leaves ample room for more comparative studies.
Turning to the organizational context, homogeneous results based on relatively
large data sets show that the evaluative use of APM is weaker with greater task
uncertainty (k = 5) and task difficulty (k = 7), such that these factors appear to
condition superiors’ evaluative use of APM. This finding is consistent with theory
that states that the means to achieve set targets are uncertain with greater task
uncertainty and that the clarity of targets, which APM offer, alone might not help
reduce ambiguity. Thus, APM should be de-emphasized if task uncertainty is a
matter of concern (Hirst, 1981; Hartmann, 2005, 2007). Furthermore, this finding is
inconsistent with modelling task uncertainty or difficulty as moderators of the evalu-
ative use of APM–outcome variable relations, as well as with three-way interactions
involving task uncertainty or difficulty, the evaluative use of APM, and participative
budgeting. Such models demand uncorrelated variables (e.g., Baron and Kenny,
1986; Gerdin and Greve, 2004), whereas this study reveals negative correlations of
task uncertainty (ρcum = −0.212) and task difficulty (ρcum = −0.230) with the evaluative
use of APM, along with a positive task difficulty–participative budgeting relation
(ρcum = 0.286) in service industries.
Finally, consistent with the evaluative use of APM being defined as a superior’s
task, its relation with unit size is significant, positive, and homogeneous (ρcum = 0.093,
k = 3), whereas the homogeneous relation with company size (ρcum = 0.048, k = 3) is
not significant. That is, larger business units are more important from a superior’s
perspective and thus more tightly controlled. This is facilitated by APM that provide
aggregated information about unit performance (Van der Stede, 2001). For company
size, a similar interpretation is impossible though. Top managers of large companies
may exercise tighter control, such that the emphasis on APM might be stronger in
larger compared with smaller organizations (Chenhall, 2003). But the influence of
company size on superiors’ evaluative use of APM likely is not direct. Instead, this
influence might be mediated by organizational and control system designs (Bouwens
and Abernethy, 2000; Chenhall, 2003; Lillis and van Veen-Dirks, 2008) and by the
way superiors themselves are evaluated by top management (Hopwood, 1974). But
because company and unit size frequently appear as control variables (e.g.,
Govindarajan, 1988; Van der Stede, 2001; O’Connor et al., 2006), this theory clearly
is not sufficiently developed, and more studies are necessary to explore these issues
in depth.
Several further points are noteworthy. First, regarding variable measurement, the
absence of a measurement influence lends support to Withey et al.’s (1983) conclu-
sion about the equivalence of the measures of task uncertainty (Van de Ven and
Delbecq, 1974; Van de Ven and Ferry, 1980; Daft and Macintosh, 1981). This con-
clusion also holds for the task difficulty dimension, whereas research currently is too
scarce for analyses of the task variability dimension. However, finding no measure-
ment influence is inconsistent with research on environmental uncertainty (e.g.,
Tymon et al., 1998) and the evaluative use of APM (e.g., Otley and Pollanen, 2000;
264
Vagneur and Peiperl, 2000; Noeverman et al., 2005; Derfuss, 2009). But this result
might just follow from the high number of measures used to assess both constructs
and the associated small data sets, which precluded any further analysis. Second,
research is scarce in service and public sector organizations; the analysis of industry
differences was barely possible. At the very least though, the distinction between
manufacturing and service industries is important, as indicated by the significant
moderating influence on the task difficulty–participative budgeting relation. Third,
for all homogeneous relations, the mean correlations offer only small or medium
strength.This challenges the use of single context variables, such as environmental or
task uncertainty (e.g., Chapman, 1997; Shields and Shields, 1998; Hartmann, 2000),
rather than several variables in studies that tease out their joint influence. Fourth,
different correlations emerge for the information asymmetry–participative budget-
ing and decentralization–evaluative use of APM relations, whether the analyses
include only individual-level or also feature organizational-level studies. Therefore,
the level of analysis might influence the comparability of the respective findings.
Because all organizational-level studies (Douglas and Wier, 2000, 2005; O’Connor
et al., 2006; Douglas et al., 2007) measure the variables differently than do their
individual-level counterparts, no definitive conclusion is possible about the influence
of the level of analysis though. In summary, to develop a more comprehensive
understanding, studies situated in diverse industries and cultures would be
valuable—assuming they cover all four categories of context variables systematically
by including multiple variables at different levels of analysis and measuring them
with different instruments.
As is any empirical research, this study is subject to several limitations. First,
because the meta-analysis summarizes quantitative findings, case studies cannot be
included, despite the important empirical evidence they provide. A comprehensive
review of case studies could usefully supplement this analysis. Second, developments
over time might be important (see Shields and Shields, 1998; Otley and Fakiolas,
2000) but cannot be assessed with the small data sets. Combining older with more
recent evidence should yield valid conclusions though, because APM are still used
for performance evaluation, and targets are still set through participation (Anderson
et al., 2010; Libby and Lindsay, 2010).Third, this study only controls for sampling and
measurement errors, not for range restriction or imperfect construct validity, two
other important artefacts. Range restrictions are evident in several studies (e.g.,
Kyj and Parker, 2008) and might attenuate observed correlations (Hunter and
Schmidt, 2004). Yet because they also may result from differences in context and
accounting systems across companies, corrections do not seem warranted. Most
variable measures also use self-rating scales that could be biased by common
method effects (Podsakoff et al., 2003). But because few studies provide the neces-
sary information, corrections are impossible. Studies testing for these biases do not
generally uncover significant validity threats (e.g., Chong and Johnson, 2007;
Hartmann, 2007). Fourth, the mean correlations might be inflated by variance due to
common antecedents, mediators, or theoretical moderators (Chenhall and Moers,
2007). Yet it remains impossible to categorize studies to analyze, for example, the
influence of functional areas (Brownell, 1985), types of responsibility centers
265
A BAC U S
(Otley, 1978), or companies’ profitability (Imoisili, 1989), because the studies do not
report the necessary details.
Despite these limitations, this study offers an important first step in meta-analytic
research into context influences on participative budgeting and the evaluative use of
APM. To advance understanding of these influences, further meta-analyses might
supplement the findings by summarizing studies of management accountants’ (e.g.,
Shields and Young, 1993; Sharma, 2002) and top managers’ (e.g., Naranjo-Gil and
Hartmann, 2006; Widener et al., 2008) perspectives. Bivariate meta-analysis results
regarding the context and consequences of participative budgeting and the evalua-
tive use of APM also might be combined to examine causal models. Finally, meta-
analyses of further budgeting and performance measurement variables could situate
the present findings in a broader context.
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APPENDIX
Table A1
RELIABILITY DISTRIBUTIONS OF ANALYZED VARIABLES
Variable and reference No.1 Mean α2 SD α
Participative budgeting
Douglas and Wier (2000) 4 0.726 0.100
Milani (1975) 66 0.845 0.076
Kren (1992), reduced Milani (1975) 3 0.830 0.072
Hassel and Cunningham (1993) 3 0.6363 0.309
Swieringa and Moncur (1975) 10 0.6613 0.171
Vroom and Mann (1960) 1 0.920
Evaluative use of APM
Brownell (1985) 19 0.6903 0.132
Harrison (1992) 1 0.715
Hartmann and Slapničar (2009) 1 0.882
Hirst (1983) 1 0.760
Lillis and van Veen-Dirks (2008) 1 0.700
Moers (2006) 1 0.920
O’Connor et al. (2006) 1 0.800
Van der Stede (2000) 2 0.790 0.057
Consideration (Leadership style), Stogdill (1963) 3 0.884 0.015
Decentralization
Gordon and Narayanan (1984) 7 0.761 0.066
O’Connor et al. (2006) 1 0.740
Tannenbaum (1962) 1 0.770
Vancil (1979) 2 0.860 0.014
Environmental uncertainty
Chong et al. (2005) 1 0.840
Downey et al. (1975) 1 0.740
Duncan (1972) 3 0.747 0.072
Duncan (1972), dynamism dimension 1 0.760
Hoque and Hopper (1997) 1 0.730
Miles and Snow (1978) 5 0.670 0.109
Information asymmetry, Dunk (1993) 6 0.784 0.021
Locus of control, Rotter (1966) 1 0.710
Strategy
Govindarajan (1988) 3 0.630 0.044
Miller and Roth (1994) 1 0.6053
Task uncertainty
Hirst (1983) 1 0.770
Scott and Tiessen (1999) 1 0.870
Van de Ven and Delbecq (1974) 1 0.400
Van de Ven and Ferry (1980) 3 0.785 0.059
Withey et al. (1983) 5 0.781 0.100
Task difficulty
Daft and Macintosh (1981) 3 0.837 0.058
Van de Ven and Delbecq (1974) 6 0.632 0.122
Van de Ven and Ferry (1980) 1 0.810
Withey et al. (1983) 3 0.851 0.051
Notes:
1. Number of studies reporting reliability coefficients for the respective variables in budgeting literature.
2. Mean and standard deviation (SD) of the respective distribution of reliability coefficients (α).
3. Computed with the help of the Spearman-Brown formula.
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ABACUS, Vol. 51, No. 2, 2015 doi: 10.1111/abac.12046

Relating Context Variables to Participative

Extant findings regarding how context variables relate to participative

Klaus Derfuss (klaus.derfuss@fernuni-hagen.de) is Assistant Professor at the Department of Manage-

participative budgeting describes the ‘process in which individuals, whose perfor-

BACKGROUND AND RESEARCH QUESTIONS

Relations of Context Variables to Participative Budgeting and

VARIABLES USED TO MEASURE CONTEXT INFLUENCES

Brownell’s (1982b) Variables used1 Description2 Results in studies on . . .

© 2015 Accounting Foundation, The University of Sydney

To support their inclusion of specific context variables, researchers draw on dif-

errors (Schmidt, 1992; Hunter and Schmidt, 2004). Meta-analyses in accounting

Selection and Coding of Studies

coding categories referred to each moderating variable. If the respective information

recommend that ‘three studies would seem to be a reasonable minimum’. Moderator

Hunter and Schmidt (2004) recommend using hierarchical moderator analyses to

Accounting, Journal of Accounting Research, Journal of Management Accounting

META-ANALYSIS RESULTS FOR CONTEXT VARIABLE–PARTICIPATIVE BUDGETING RELATIONS

© 2015 Accounting Foundation, The University of Sydney

META-ANALYSIS RESULTS FOR CONTEXT VARIABLE–EVALUATIVE USE OF APM RELATIONS

© 2015 Accounting Foundation, The University of Sydney

additional analysis is necessary to exclude two organizational-level correlations

Regarding RQ2, the variance in the homogeneous relations can be attributed

EXPLORATORY MODERATOR ANALYSES

© 2015 Accounting Foundation, The University of Sydney

DISCUSSION AND LIMITATIONS

This study provides an initial meta-analysis of the correlations between frequently

ANALYSIS OF PUBLICATION QUALITY

© 2015 Accounting Foundation, The University of Sydney

*Indicate empirical studies included in the meta-analyses.

Chapman, C. S. (1997), ‘Reflections on a Contingent View of Accounting’, Accounting, Organizations and

Hartmann, F. G. H. and F. Moers (1999), ‘Testing Contingency Hypotheses in Budgetary Research:

Keating, A. S. (1997),‘Determinants of Divisional Performance Evaluation Practices’, Journal of Account-

Moores, K. J. and D. S. Sharma (1998), ‘The Influence of Perceived Environmental Uncertainty on

RELIABILITY DISTRIBUTIONS OF ANALYZED VARIABLES

Variable and reference No.1 Mean α2 SD α

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