Abstract Budgets may be considered instrumental if reward allocation is based on budgetary performance. The present study examines the effects of budget instrumentality and budgetary participation on budgetary performance as well as job satisfaction in a large retail drug company. Regression analyses indicate that the interaction between instrumentality and participation affects both performance and satisfaction. The pattern of interaction differs from those found by previous studies: high performance and satisfaction are associated with low participation/high instrumentality and high participation/low instrumentality conditions. The paper suggests specific directions for the development of a more comprehensive interaction theory.
Nissim Aranya (Sat,) studied this question.