Budget participation and managerial performance: The role of psychological empowerment and creativity

This study aims to analyze the effects of budget participation (BP) on managerial performance (MP) through serial mediation of psychological empowerment (EP) and creativity (CT). The relationship between BP and MP motivates researchers to investigate intermediate variables to understand whether BP improves performance. This study fills this gap in examining PE and CT. CT and PE are critical factors for organizations’ success in the current business environment, characterized by rapid changes and high competitiveness. While PE creates an environment conducive to expressing CT, in turn, CT allows organizations to innovate and adapt to change, leading to a better MP. BP emerges as an effective strategy for promoting a more empowered and creative work environment, which, in turn, indirectly impacts MP. A survey was conducted with 267 companies listed on the Brazilian stock exchange B3 S.A. To test the hypotheses, we used partial least squares structural equation modeling, and additional analysis with importance-performance map analysis (IPMA). The results indicate that BP influences PE, which in turn boosts CT and, finally, CT positively affects MP. This study contributes to the literature by integrating PE and CT in analyzing the relationship between BP and MP. Regarding management implications, it is suggested that managers can leverage BP as a strategy to promote employees' PE and CT, aiming to improve MP.

Keywords:
budgetary participation; psychological empowerment; creativity; managerial performance