Effect of Manager’s Characteristics on Budget Participation mediated by Perception of Procedural Justice

Rodrigo Rengel, Januário José Monteiro, Rogério João Lunkes, Carlos Eduardo Facin Lavarda, Darci Schnorrenberger


Objective: To examine the relationship between managerial characteristics, perception of procedural fairness and budget participation.

Method: A survey was conducted with 94 managers of large hotels in Brazil. We adopted the technique of Structural Equation Modeling for data analysis, performed in the software SmartPLS version 3.

Originality/Relevance: The proposal indicates that decisions taken during the budget process are related to managers’ characteristics. These characteristics influence budget participation and the perception of procedural justice. The relevance of the research is to check the mediation of procedural justice in the relationship between managers’ characteristics and budget participation.

Results: The results indicate that managers’ characteristics are directly related to budget participation, and managers' perception of procedural justice is related to budget participation. Also, it has a mediating relationship between managers’ characteristics and budget participation. Based on the findings, it appears that the characteristics of Brazilian hotel managers determine the way managers feel procedurally justified and improve their budget participation.

Theoretical/Methodological contributions: This paper makes a relevant contribution to the literature on the study theme, as there is still little knowledge of how procedural justice can mediate this relationship between managerial characteristics and budget participation.

Social/management contributions: The present research contributes to hotel management because it is a sector characterized by a high level of competition and risk, in which budget efficiency can be one of the key success factors.


Upper Echelon Theory (UET); Characteristics of TMT; Budget Participation; Procedural justice; Hotels.


Abdel-Kader, M., Luther, R. (2006). Management accounting practices in the British drink and food industry. British Food Journal, 108(5), 336-57. https://doi.org/10.1108/00070700610661321

Andrade, S. M. de, Fischer, A. L., & Stefano, S. R. (2013). Justiça distributiva: um estudo sobre as variáveis demográficas dos funcionários e sua percepção sobre o ambiente de trabalho. Revista Cesumar – Ciências Humanas e Sociais Aplicadas, 18(1), 7-30.


Bantel, K. A., & Jackson, S. E. (1989). Top management and innovations in banking: does the composition of the top team make a difference?. Strategic management journal, 10(S1), 107-124. https://doi.org/10.1002/smj.4250100709

Barker III, V. L., & Mueller, G. C. (2002). CEO characteristics and firm R&D spending. Management Science, 48(6), 782-801. https://doi.org/10.1287/mnsc.48.6.782.187

Baron, R. M., & Kenny, D. A. (1986). The moderator–mediator variable distinction in social psychological research: conceptual, strategic, and statistical considerations. Journal of personality and social psychology, 51(6), 1173. doi:10.1037/0022-3514.51.6.1173

Bedford, D. S., Bisbe, J., & Sweeney, B. (2019). Performance measurement systems as generators of cognitive conflict in ambidextrous firms. Accounting, Organizations and Society, 72(1), 21-37. https://doi.org/10.1016/j.aos.2018.05.010

Bido, S. D., & da Silva, D. (2019). SmartPLS 3: especificação, estimação, avaliação e relato. Administração: Ensino e Pesquisa, 20(2), 1-31. doi:10.13058/raep.2019.v20n2.1545

Bortoluzzi, D. A., Zakaria, J., Santos, E. A., & Lunkes, R. J. (2016). A influência das características dos executivos de alto escalão sobre a estrutura de capital: um estudo em empresas listadas na BM&FBovespa. Espacios, 37(37), 1-24. https://www.revistaespacios.com/a16v37n37/16373730.html.

Brooks, C., Sangiorgi, I., Hillenbrand, C., & Money, K. (2018). Why are older investors less willing to take financial risks?. International Review of Financial Analysis, 56, 52-72. https://doi.org/10.1016/j.irfa.2017.12.008

Carpenter, M. A., Geletkanycz, M. A., & Sanders, W. G. (2004). Upper echelons research revisited: Antecedents, elements, and consequences of top management team composition. Journal of management, 30(6), 749-778. https://doi.org/10.1016/j.jm.2004.06.001

Castro, J.K., Santos, G.R., Souza, P., Lunkes, R.J. (2012). Prácticas presupuestarias aplicadas a la empresa hotelera de Brasil: un estudio de la ciudad de Florianópolis. Revista Estudios y Perspectivas em Turismo, 21(4), p. 904-924. https://www.redalyc.org/pdf/1807/180724056006.pdf

Child, J. (1997). Strategic choice in the analysis of action, structure, organizations and environment: Retrospect and prospect. Organization studies, 18(1), 43-76. https://doi.org/10.1177/017084069701800104

Chin, W. W. (1998). The partial least squares approach to structural equation modeling. Modern methods for business research, 295(2), 295-336.

Codesso, M.M., Lunkes, R.J., Suave, R. (2013). Práticas orçamentárias aplicadas em empresas hoteleiras no Brasil: um estudo na cidade de Balneário Camboriú – SC. Turismo – Visão e Ação, 15(2), 279-294. https://doi.org/10.14210/rtva.v15n2.p279-294

Coet, L. J., & McDermott, P. J. (1979). Sex, instructional set, and group make-up: Organismic and situational factors influencing risk-taking. Psychological Reports, 44(3 suppl), 1283-1294. https://doi.org/10.2466/pr0.1979.44.3c.1283

Cohen, J. (1977). Statistical power analysis for the behavioral sciences (revised ed.). New York: Academic Press.

Covaleski, M., Evans III, J. H., Luft, J., & Shields, M. D. (2007). Budgeting research: three theoretical perspectives and criteria for selective integration. In. Chapman, C. S.; Hopwood, A. G.; Shields, M. D. Handbooks of Management Accounting Research, 2(6),

- 624. https://doi.org/10.2308/jmar.2003.15.1.3

Cyert, R. M., & March, J. G. (1963). A behavioral theory of the firm (2. ed.). New Jersey, USA: Englewood Cliffs.

Dohmen, T., Falk, A., Huffman, D., Sunde, U., Schupp, J., & Wagner, G. G. (2011). Individual risk attitudes: neasurement, determinants, and behavioral consequences. Journal of the European Economic Association, 9(3), 522-550. https://doi.org/10.1111/j.1542-4774.2011.01015.x

Fornell, C., & Larcker, D. F. (1981). Structural equation models with unobservable variables and measurement error: Algebra and statistics. Journal of Marketing Research, XVIII, 382-388. https://doi.org/10.1177/002224378101800313

Francis, B., Hasan, I., Park, J. C., & Wu, Q. (2015). Gender differences in financial reporting decision making: Evidence from accounting conservatism. Contemporary Accounting

Research, 32(3), 1285-1318. https://doi.org/10.1111/1911-3846.12098

Geetha, S. N., & Selvakumar, M. M. (2016). An analysis on the factors influencing risk tolerance level of individual investors. International Journal of Business Excellence, 9(2), 253-264. https://doi.org/10.1504/IJBEX.2016.074867

Gibbons, P. T., & O'Connor, T. (2005). Influences on strategic planning processes among Irish SMEs. Journal of Small Business Management, 43(2), 170-186. https://doi.org/10.1111/j.1540-627x.2005.00132.x

Goddard, A. (1997). Organizational culture and budget related behavior: a comparative contingency study of three local government organizations. The International Journal of

Accounting, 32(1), 79-97. https://doi.org/10.1016/S0020-7063(97)90006-6

Gomez-Conde, J., Lunkes, R. J., & Rosa, F. S. (2019). Environmental innovation practices and operational performance. The joint effects of management accounting and control systems and environmental training. Accounting, Auditing & Accountability Journal, 32(5), 1325-1357. https://doi.org/10.1108/AAAJ-01-2018-3327.

Grable, J. E. (2000). Financial risk tolerance and additional factors that affect risk taking in everyday money matters. Journal of Business and Psychology, 14(4), 625-630. https://doi.org/10.1023/A:1022994314982

Grable, J. E., & Joo, S. H. (2004). Environmental and biophysical factors associated with financial risk tolerance. Journal of Financial Counseling and Planning, 15(1), 73-82.

Hair Jr, J. F., Hult, G. T. M., Ringle, C., & Sarstedt, M. (2016). A primer on partial least squares structural equation modeling (PLS-SEM). Sage Publications, Los Angeles.

Hallahan, T. A., Faff, R. W., & McKenzie, M. D. (2004). An empirical investigation of personal financial risk tolerance. Financial Services Review-Greenwich, 13(1), 57-78.

Hambrick, D. C., & Mason, P. A. (1984). Upper echelons: The organization as a reflection of its top managers. Academy of management review, 9(2), 193-206. https://doi.org/10.5465/amr.1984.4277628

Hambrick, D. C. (2007).Upper echelons theory: An update. Academy of Management Review, 32, 334-343. doi: 10.5465/AMR.2007.24345254

Henderson, A. D., Miller, D., & Hambrick, D. C. (2006). How quickly do CEOs become obsolete? Industry dynamism, CEO tenure, and company performance. Strategic Management Journal, 27(5), 447-460. https://doi.org/10.1002/smj.524

Johnson, J. E., & Powell, P. L. (1994). Decision making, risk and gender: Are managers different?. British Journal of Management, 5(2), 123-138. https://doi.org/10.1111/j.1467-


Kor, Y. Y. (2006). Direct and interaction effects of top management team and board compositions on R&D investment strategy. Strategic management journal, 27(11), 1081-1099. https://doi.org/10.1002/smj.554

Lau, C. M., & Lim, E. W. (2007). The relationship between procedural justice and managerial performance: the effect of participation. http://citeseerx.ist.psu.edu/viewdoc/download?doi=

Lau, C. M.; Tan, S. L. C. (2006). The effects of procedural fairness and interpersonal trust on job tension in budgeting. Management Accounting Research, 17(2), 171-186. https://doi.org/10.1016/j.mar.2005.10.001

Lavarda, C. E. F., & Fank, O. L. (2014). Relação da assimetria da informação, da participação orçamentária e do risco na criação da folga orçamentária. Contextus – Revista Contemporânea de Economia e Gestão, 12(1). https://doi.org/10.19094/contextus.v12i1.32172

Leach-López, M. A.; Stammerjohan, W. W.; Mcnair, F. M. (2008). Effects of budgetary participation conflict on job performance of Mexican and US managers. Advances in Accounting, 24(1), 49-64. https://doi.org/10.1016/j.adiac.2008.05.008

Li, Y., & Tan, C. H. (2009). Aligning CIO characteristics to business strategy: an empirical investigation. In: 2009 42nd Hawaii International Conference on System Sciences (pp. 1-10). IEEE. 10.1109/HICSS.2009.55

Libby, R., & Luft, J. (1993). Determinants of judgment performance in accounting settings: Ability, knowledge, motivation, and environment. Accounting, organizations and society, 18(5), 425-450. https://doi.org/10.1016/0361-3682(93)90040-D

Libby, T., & Lindsay, R. M. (2010). Beyond budgeting or budgeting reconsidered? A survey of North-American budgeting practice. Management accounting research, 21(1), 56-75. https://doi.org/10.1016/j.mar.2009.10.003

Libby, T., Lindsay, R. M. (2010). Beyond budgeting or budgeting reconsidered? A survey of North-American budgeting practice. Management Accounting Research, 21, 56-75. https://doi.org/10.1016/j.mar.2009.10.003

Lidia, T. G. (2015). An analysis of the existence of a link between budgets and performance in economic entities. Procedia Economics and Finance, 32, 1794-1803. https://doi.org/10.1016/S2212-5671(15)01483-5

Lima Filho, R., Bruni, A. L., & Sampaio, M. (2012). A influência do gênero, idade e formação na presença de heurísticas em decisões de orçamento: um estudo quase experimental (The influence of gender, age and formation in the presence of heuristics in

budgeting decisions: a almost experimental study). Revista Universo Contábil, 8(2), 103-117. doi:10.4270/ruc.2012215

Lindquist, T. M. (1995). Fairness as an antecedent to participative budgeting: Examining the effects of distributive justice, procedural justice and referent cognitions on satisfaction and performance. Journal of Management Accounting Research, 7, 122.

Lunardi, M. A., Degenhart, L., & Zonatto, V. C. S. (2019). Estilo de Liderança, Assimetria de Informação e Uso Avaliativo do Orçamento Constituem-se Antecedentes a Participação Orçamentária?. Revista Contemporânea de Contabilidade, 16(38), 3-34. http://dx.doi.org/10.5007/2175-8069.2019v16n38p3

Lunkes, R. J., Pereira, B. D. S., Santos, E. A., & Rosa, F. S. (2019). Analysis of the relationship between the observable characteristics of CEOs and organizational performance. Contaduría y Administración, 64(4),1-22. http://dx.doi.org/10.22201/fca.24488410e.2018.1785

Lunkes, R. J., Bortoluzzi, D. A., Anzilago, M., & Rosa, F. S. (2019). Influence of online hotel reviews on the fit between strategy and use of management control systems. A study among small- and medium-sized hotels in Brazil. Journal Applied Accounting Research,

(in press). https://doi 10.1108/JAAR-06-2018-009.

Maxfield, S., Shapiro, M., Gupta, V., & Hass, S. (2010). Gender and risk: women, risk taking and risk aversion. Gender in Management: An International Journal, 25(7), 586-604. https://doi.org/10.1108/17542411011081383

Mazzioni, S.; Politelo, L.; Lavarda, C. E. F. (2015). A percepção dos gestores em relação à participação orçamentária, à justiça processual e ao desempenho gerencial. Sociedade,

Contabilidade e Gestão, 9(2), 136-151.

McClelland, P. L., Barker III, V. L., & Oh, W. Y. (2012). CEO career horizon and tenure: Future performance implications under different contingencies. Journal of Business Research, 65(9), 1387-1393. https://doi.org/10.1016/j.jbusres.2011.09.003

Mcfarlin, D. B.; Sweeney, P. D. (1992). Distributive and procedural justice as predictors of satisfaction with personal and organizational outcomes. Academy of management Journal, 35(3), 626-637. https://doi.org/10.5465/256489

Meier-Pesti, K., & Goetze, E. (2005). Masculinity and femininity as predictors of financial risk-taking: Evidence from a priming study on gender salience. ACR European Advances, 7, 45-46. https://www.acrwebsite.org/volumes/13766/eacr/vol7/E-07

Mendes, A. C. A., Lunkes, R. J., Menegazzo, G. D., Schnorrenberger, D., & Lavarda, C. E. F. (2019). Características observáveis dos usuários e a utilização da informação contábil: um estudo com base na teoria dos escalões superiores. Enfoque, 38(1), 67-84.


Menegazzo, G. D., Lunkes, R. J., Mendes, A., & Schnorrenberger, D. (2017). Relação entre características demograficas dos usuários e uso de informações para tomada de decisões: um estudo em micro e pequenas empresas. Journal of Globalization, Competitiveness &

Governability/Revista de Globalización, Competitividad y Gobernabilidad/Revista de Globalização, Competitividade e Governabilidade, 11(3), 90-110. 10.3232/GCG. 2017.V11.N3.05

Milani, K. (1975). The relationship of participation in budget-setting to industrial supervisor performance and attitudes: a field study. The accounting review, 50(2), 274-284.

Miller, D. (1993). Some organizational consequences of CEO succession. Academy of Management Journal, 36(3), 644-659. https://doi.org/10.5465/256597

Montinari, N., & Rancan, M. (2013). Social preferences under risk: the role of social distance (N. 2013-050). Jena Economic Research Papers. 10419/98455/1/780070429.pdf

Muhammad, A. H. (2004). Procedural justice as mediator between participation in decisionmaking and organization citizenship behavior. International Journal of Commerce and Management, 14(3/4), 58-68. https://doi.org/10.1108/10569210480000184

Nahartyo, E. (2013). Participação orçamentária e justiça processual: Evidências do alongamento da condição orçamentária. Global Journal of Business Research, 7(4), 85-100. https://doi.org/10.1080/09638180802627795

Naranjo-Gil, D., & Hartmann, F. (2007). Management accounting systems, top management team heterogeneity and strategic change. Accounting, Organizations and Society, 32(7-8),

-756. https://doi.org/10.1016/j.aos.2006.08.003

Naranjo-Gil, D., Maas, V. S., & Hartmann, F. G. (2009). How CFOs determine management accounting innovation: an examination of direct and indirect effects. European accounting review, 18(4), 667-695. https://doi.org/10.1080/09638180802627795

Ostergren, K., Stensaker, I. (2011). Management control without budgets: A field study of “Beyond Budgeting†in practice. European Accounting Review, 20(1), 149-181. https://doi.org/10.1080/09638180903487842

Pavlatos, O. (2012). The impact of CFOs' characteristics and information technology on cost management systems. Journal of Applied Accounting Research, 13(3), 242-254. https://doi.org/10.1108/09675421211281317

Paz, M. G. T. (1992). Justiça distributiva na avaliação de desempenho dos trabalhadores de uma empresa estatal (Tese de doutorado). Universidade de São Paulo, São Paulo, SP,


Peni, E. (2014). CEO and Chairperson characteristics and firm performance. Journal of Management & Governance, 18(1), 185-205. https://doi.org/10.1007/s10997-012-9224-7

Podsakoff, P. M., & Organ, D. W. (1986). Self-reports in organizational research: Problems and prospects. Journal of management, 12(4), 531-544. https://doi.org/10.1177/014920638601200408

Ramiah, V., Zhao, Y., Moosa, I., & Graham, M. (2016). A behavioural finance approach to working capital management. The European Journal of Finance, 22(8-9), 662-687. https://doi.org/10.1080/1351847X.2014.883549

Ribeiro, J. A., & Bastos, A. V. B. (2010). Comprometimento e justiça organizacional: um estudo de suas relações com recompensas assimétricas. Psicologia: ciência e profissão, 30(1), 4-21. http://dx.doi.org/10.1590/S1414-98932010000100002

Ringle, C. M.; Da Silva, D.; Bido, D. S. (2014). Modelagem de equações estruturais com utilização do SmartPLS. Revista Brasileira de Marketing, 13(2), 56-73. 10.5585/remark.v13i2.2717

Ross, G. D., Nora, B. D., & Milani, B. (2015). Aversão ao risco em profissionais do setor financeiro. Revista de Administração da Universidade Federal de Santa Maria, 8. 10.5902/1983465916344

Santos, E. A., Anzilago, M., & Lunkes, R. J. (2017). Sistemas de mensuração de desempenho, clareza de papel, empowerment psicológico e desempenho gerencial: um estudo de suas

relações. Revista Universo Contábil, 13(3), 143-161. 10.4270/ruc.2017322

Sarin, R., & Wieland, A. (2016). Risk aversion for decisions under uncertainty: Are there gender differences?. Journal of Behavioral and Experimental Economics, 60, 1-8. https://doi.org/10.1016/j.socec.2015.10.007

Shepherd, D. A., Williams, T. A., & Patzelt, H. (2015). Thinking about entrepreneurial decision making: Review and research agenda. Journal of management, 41(1), 11-46. https://doi.org/10.1177/0149206314541153

Shields, M. D., Deng, F. J., & Kato, Y. (2000). The design and effects of control systems: tests of direct and indirect-efects models. Accounting, Organizations and Society, 25(2), 85-202. https://doi.org/10.1016/S0361-3682(99)00041-0

Shields, J. F., & Shields, M. D. (1998). Antecedents of participative budgeting. Accounting, Organizations and Society, 23(1), 49-76. https://doi.org/10.1016/S0361-3682(97)00014-7

Sivabalan, P., Booth, P., Malmi, T; Brown, D.A. (2009). An exploratory study of operational reasons to budget. Accounting and Finance, 49(4), 849-871. https://doi.org/10.1111/j.1467-629X.2009.00305.x

Sung, J., & Hanna, S. D. (1996). Factors related to risk tolerance. Financial Counseling and Planning, 7.

Tang, T. L. P., & Sarsfield-Baldwin, L. J. (1996). Distributive and procedural justice as related to satisfaction and commitment. SAM Advanced Management Journal, 61(3), 25-31.

Tyler, T. R. (1989). The psychology of procedural justice: a test of the group-value model. Journal of personality and social psychology, 57(5), 830-838. http://dx.doi.org/10.1037/0022-3514.57.5.830

Uyar, A. (2009). An evaluation of budgeting approaches: traditional budgeting, better budgeting, and beyond budgeting. Journal of Academic Studies, 11(42), 113-130.

Uyar, A., Bilgin, N. (2011). Budgeting practices in the Turkish hospitality industry: An exploratory survey in the Antalya region. International Journal of Hospitality Management, 30(2), 398-408. https://doi.org/10.1016/j.ijhm.2010.07.011

Wang, G.; Holmes Jr., R. M.; Oh, I-S.; Zhua, W. (2016). Do CEOs matter to firm strategic actions and firm performance? A meta-analytic investigation based on upper echelons theory. Personnel Psychology, 69, 775-862. https://doi.org/10.1111/peps.12140

Wentzel, K. (2002). The influence of fairness perceptions and goal commitment on managers’ performance in a budget setting. Behavioral research in Accounting, 14(1), 247-271. https://doi.org/10.2308/bria.2002.14.1.247

Wiersema, M. F., & Bantel, K. A. (1992). Top management team demography and corporate strategic change. Academy of Management journal, 35(1), 91-121. https://doi.org/10.5465/256474

Yang, Q., Zimmerman, M., & Jiang, C. (2011). An empirical study of the impact of CEO characteristics on new firms' time to IPO. Journal of Small Business Management, 49(2), 163-184. https://doi.org/10.1111/j.1540-627X.2011.00320.x

Yao, R., Sharpe, D. L., & Wang, F. (2011). Decomposing the age effect on risk tolerance. The Journal of Socio-Economics, 40(6), 879-887. https://doi.org/10.1016/j.socec.2011.08.023

Zonatto, V. C S. (2014). Influência de fatores sociais cognitivos de capacidade, vontade e oportunidade sobre o desempenho gerencial nas atividades orçamentárias das maiores empresas exportadoras do Brasil (Tese de doutorado). Programa de Pós-Graduação em

Ciências Contábeis, Universidade Regional de Blumenau, Blumenau, SC, Brasil.

Zor, U., Linder, S., & Endenich, C. (2019). CEO characteristics and budgeting practices in emerging market SMEs. Journal of Small Business Management, 57(2), 658-678. https://doi.org/10.1111/jsbm.12438

DOI: http://dx.doi.org/10.51341/1984-3925_2020v23n2a7


  • There are currently no refbacks.

e-ISSN: 1984-3925

Licença Creative Commons
The JAMG adopts the Creative Commons license CC-BY-NC ND Creative Commons Attribution 4.0 

Indexing and Abstracting:

Logotipo SPELLLogotipo LATINDEX Logotipo OPENAIRE Logotipo DOAJLogotipo Cengage Logotipo EBSCOLogotipo REDIB Logotipo ESCI