The Effect of Strategic Planning Procedure and Causal Chain of Performance Measures on Budget Goal Setting:An Experimental Study

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Journal of Central University of Finance & Economics ›› 2021, Vol. 0 ›› Issue (10) : 52-64.

LI He-zun, AN Na, LIU Jun-yong

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Abstract

This paper uses an experiment to examine the impact of strategic planning procedure and causal chain of performance measures on budget goal setting under the balanced scorecard framework.The experimental results show that when the financial target set by superiors is higher than that of previous years,the causal chain of performance measures can prompt subordinate managers to report a target higher than that of previous years in order to match the given financial target.The experiment also shows that using the causal chain of performance measures in a normalized strategic planning procedure can bring higher budget satisfaction to subordinate managers.The results of supplementary tests show that the combination of the normalized strategic planning procedure and causal chain of performance measures can enhance the subordinate manager's perception of causal linkage of performance measures,thereby improving their fairness perception of the budget planning process,and ultimately improving their budgetary satisfaction.

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Budget goal / Budget satisfaction / Strategic planning procedure / Causal chain of performance measures

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LI He-zun, AN Na, LIU Jun-yong. The Effect of Strategic Planning Procedure and Causal Chain of Performance Measures on Budget Goal Setting:An Experimental Study[J]. Journal of Central University of Finance & Economics, 2021, 0(10): 52-64

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