The Importance of Procedural Fairness in Budgeting

The importance of organizational commitment in enhancing management accounting systems effectiveness has received increased attention in recent years. Surprisingly, no research has investigated whether budgetary participation, by itself, affects organizational commitment, and the process by which this occurs. Procedural justice literature suggests that participation may affect procedural fairness which, in turn, may affect job satisfaction and organizational commitment. This study therefore proposes that budgetary participation affects job satisfaction indirectly through procedural fairness. It also proposes that the effects of participation on organizational commitment are indirect through procedural fairness and job satisfaction. The results provide support for these propositions.