The Effect of Organizational Technology Policy on Budgeting

Participative control systems in manufacturing industry have received considerable organizational attention as a means of enhancing performance in response to growing global competition. Firms are advised to adopt a technologically proactive stance, and to implement policies that assist them in becoming or remaining competitive. Corporate reliance on a technology policy in manufacturing organizations, however, may condition participation's effectiveness. The study examines whether participative budgetary control systems are effective in enhancing performance not only when the level of technology policy is taken into consideration but also when the line functions of production and marketing are controlled for. The results suggest first, that technology policy influences the association between participation and performance for production managers, but not for marketing managers. Second, participation is effective in enhancing production manager performance when the emphasis on technology policy is low, but not so when it is high.