Intrinsic and Extrinsic Motivation andParticipation in Budgeting: Antecedents

and Consequences

Bernard Wong-On-WingSouthwestern University of Finance and Economics

and Washington State University

Lan GuoWilfrid Laurier University

Gladie LuiLingnan University

ABSTRACT: Based on Self-Determination Theory �SDT; Ryan and Deci 2000b; Gagnéand Deci 2005�, the present research proposes and tests a motivation-based model ofparticipation in budgeting that distinguishes among intrinsic motivation, autonomousextrinsic motivation, and controlled extrinsic motivation for participative budgeting. Theproposed model was tested using a survey conducted among managers of an interna-tional bank. The results suggest that while intrinsic motivation and autonomous extrin-sic motivation for participation in budgeting are positively related to performance, con-trolled extrinsic motivation is negatively associated with performance. These findingshighlight the importance of distinguishing among various forms of motivation in partici-pative budgeting research and suggest that the mechanism by which the informationbenefits of participation in budgeting are obtained may be more complex than assumed.The results also provide evidence of the viability of using the proposed model to studycommonly assumed reasons for participative budgeting within a general theoreticallybased framework of motivation.

Keywords: Self-Determination Theory; participative budgeting; intrinsic motivation;autonomous extrinsic motivation; controlled extrinsic motivation;performance.

Data Availability: Please contact the first author.

We thank Theresa Libby �editor�, two anonymous reviewers, and Steve Kaplan for their helpful comments and suggestions.The first author is a visiting scholar at Southwestern University of Finance and Economics.

BEHAVIORAL RESEARCH IN ACCOUNTING American Accounting AssociationVol. 22, No. 2 DOI: 10.2308/bria.2010.22.2.1332010pp. 133–153

Published Online: September 2010

133

INTRODUCTION

Following the work of motivation theorists �e.g., Lepper et al. 1973; Deci 1975; Lepper andGreene 1978; Deci and Ryan 1985�, the present research proposes and tests a motivation-based model of participation in budgeting �PB�. The current study distinguishes between

intrinsic and extrinsic motivation for PB. Individuals are intrinsically motivated if they view PB asan end in itself. For example, they may derive a sense of accomplishment and satisfaction from themere act of participating. On the other hand, they are extrinsically motivated if they participate asa means to achieve some separable objective.

Based on Self-Determination Theory �SDT; Ryan and Deci 2000b; Gagné and Deci 2005�, thepresent study further distinguishes between autonomous and controlled forms of extrinsic moti-vation. In the present context, individuals would be motivated by autonomous extrinsic motivationif they truly identified with the value of PB, whereas they would be motivated by controlledextrinsic motivation if they participated because they were pressured by an external force �e.g.,superior’s demand� or an internal force �e.g., their own sense of anxiety�. Research �Vallerand1997; Gagné and Deci 2005� shows that unlike intrinsic motivation and autonomous forms ofextrinsic motivation, controlled forms of extrinsic motivation can produce negative consequences.

The present research is motivated by several factors. First, considering the extant motivationresearch literature �see, for example, Ryan and Deci 2000b; Gagné and Deci 2005�, a review ofprior studies in PB �see, for example, Covaleski et al. 2003; Shields and Shields 1998� highlightsthe inadequate use of the term “motivation.” In particular, research in PB does not differentiateamong different types of motivation. Distinguishing among various types of motivation is impor-tant since they have been shown to lead to different consequences �for a review, see Ryan and Deci2000b; Gagné and Deci 2005�. The present study seeks to provide preliminary evidence of thesignificance of differentiating among intrinsic motivation, autonomous extrinsic motivation, andcontrolled extrinsic motivation in PB research.

Second, in an analysis of published PB research Shields and Shields �1998, 57� note that moststudies do not explicitly state their assumed reasons for PB. They argue that, “a desirable, if notnecessary, condition for research on participative budgeting to make more systematic progress indeveloping a general theory is to focus on understanding why it exists.” Extant research �e.g.,Vallerand 1997; Ryan and Deci 2000a; Gagné and Deci 2005� asserts that individuals’ statedreasons for a behavior indicate the underlying motivation for that behavior. Consistent with thatargument, the present research proposes that the stated reasons for PB reflect various underlyingforms of motivation for PB. This enables the reasons for PB to be studied within a generaltheoretically based motivation framework. For example, the commonly assumed reasons related toindividuals’ sense of personal satisfaction, feeling of accomplishment, and feeling of belongingand identification, as well as reasons related to goal setting and information sharing, all indicatethe underlying motivation for PB.

Third, research in PB has generally been studied from the perspective of the firm and that ofthe individual employee �Covaleski et al. 2003�. Whether individuals’ perspectives coincide withthat of the firm is important. Consider, for example, the information sharing purpose of PB. Onone hand, from the firm’s perspective, information sharing is a main reason for PB �Shields andShields 1998� and a major mechanism by which the benefits of PB are achieved �Covaleski et al.2003�. In particular, according to economic models of PB, management induces the subordinate toreveal private information in order to allocate resources more efficiently �Baiman and Evans 1983;Penno 1984�. On the other hand, from the individual subordinates’ perspective, research in moti-vation �e.g., Vallerand 1997; Ryan and Deci 2000b; Gagné and Deci 2005� predicts that inducingemployees to share information may lead to the controlled form of extrinsic motivation for PB,which may have possible negative consequences. To the extent that the two perspectives do notmatch, the intended benefits of PB are less likely to be obtained. The present study provides

134 Wong-On-Wing, Guo, and Lui

Behavioral Research In Accounting Volume 22, Number 2, 2010American Accounting Association

preliminary insights into the extent to which individuals’ perspective relating to the commonlyassumed information sharing reason corresponds with that of the firm.

In summary, the present research examines PB from the perspective of the individual partici-pant. It integrates the commonly assumed reasons for PB within a single framework based onmotivation theory. Specifically, it studies those reasons for PB in terms of intrinsic motivation,autonomous extrinsic motivation, and controlled extrinsic motivation. The current research alsoexamines antecedents and the consequence of different forms of motivation for PB. Based on themotivation and the PB research literature, individual variables �e.g., organization commitment�and situational variables �e.g., environment dynamism� are postulated as antecedents of individu-als’ different types of motivation for PB. The different types of motivation are in turn predicted toinfluence important consequences �e.g., individuals’ performance�.

The proposed model was tested using a survey conducted among managers of an internationalbank. The results suggest that individuals can be both intrinsically motivated and extrinsicallymotivated to participate in the budgeting process. Specifically, both intrinsic motivation and au-tonomous extrinsic motivation are positively correlated with PB. Moreover, while intrinsic moti-vation and autonomous extrinsic motivation are positively associated with performance, controlledextrinsic motivation is negatively associated with performance. As for the antecedents, organiza-tional commitment is positively associated with all forms of motivation and PB. Environmentaldynamism, on the other hand, is negatively related to autonomous extrinsic motivation and PB.

The present study has implications for both research and practice. First, the proposed modelenables the study and integration of research on the reasons for PB within a theoretically basedframework of motivation. Second, the finding of a differential effect of intrinsic motivation,autonomous extrinsic motivation, and controlled extrinsic motivation on performance suggests theneed for further examining the various forms of motivation for PB. Third, from a practice stand-point, the findings of the present study, which focused on individual participants’ motivations,indicate that their view of PB may differ from that intended by top management. In particular, thissuggests that the mechanism by which the information benefits of PB are obtained may be morecomplex than assumed.

The remainder of this paper is organized as follows. The following section presents thetheoretical background of the study. Next, a motivation-based model of PB is proposed andhypotheses are developed. The research method is then described, followed by the results and theirdiscussion and implications.

THEORETICAL BACKGROUNDIntrinsic and Extrinsic Motivation

Motivation theorists �Lepper et al. 1973; Deci 1975; Lepper and Greene 1978; Deci and Ryan1985� distinguish intrinsic from extrinsic motivation. In general, a person is described as intrin-sically motivated if he or she performs an activity for its own sake, and derives pleasure andsatisfaction from participating in the activity. In contrast, an individual who is extrinsically moti-vated performs an activity as a means to an end. He or she does not engage in the activity for theinherent pleasure that may be experienced while performing it, but instead in order to receivesomething positive or to avoid something negative once the activity is completed �Deci 1975�.

More recently, self-determination theory �SDT; Ryan and Deci 2000b, 2002� has furtherdifferentiated among different forms of extrinsic motivation that vary in their relative autonomy orself-determination. Extrinsic motivation is of an autonomous type when behavior is performed outof choice because individuals value the behavior. In contrast, extrinsic motivation is of a con-trolled �i.e., nonautonomous� type when one’s behavior allows for satisfaction of an external

Intrinsic and Extrinsic Motivation and Participation 135

Behavioral Research In Accounting Volume 22, Number 2, 2010American Accounting Association

demand or reward contingency, or to avoid guilt or anxiety �Ryan and Deci 2000b, 72�.1 Thedistinction among the various types of motivation is important since research �see, for example,Vallerand 1997� in general provides evidence of positive outcomes for intrinsic and the autono-mous form of extrinsic motivation, and negative outcomes associated with the controlled form ofextrinsic motivation. More specifically, Gagné and Deci �2005, 346–347� note that with respect toperformance, intrinsic motivation and autonomous extrinsic motivation are superior to controlledextrinsic motivation, especially on relatively complex tasks such as PB.

Reasons for Participation in BudgetingPsychology-based PB research �e.g., Ronen and Livingstone 1975; Hopwood 1976; Brownell

and McInnes 1986� generally considers three mechanisms by which the benefits of participationare achieved. These are value attainment, the motivational and the cognitive mechanisms. Accord-ing to Locke and Schweiger �1979�, if employees are able to attain their values by participating,increased morale and job satisfaction will result. Values are broadly defined as what employeeswant. They can be tangible �e.g., money� or intangible �e.g., self-expression�.

From the motivational mechanism perspective, participation may lead to employees’ in-creased trust and sense of control, more ego involvement, increased identification with the orga-nization, the setting of higher goals, and increased goal acceptance. These factors presumablyresult in increased performance through less resistance to change and more acceptance of, andcommitment to, specified goals �Locke and Schweiger �1979�.

From the cognitive mechanism perspective, participation is seen as a conduit for informationexchange, and it provides for better upward communication and understanding of the job and thedecision-making process. These factors are believed to lead to improved performance by increas-ing the flow of information �Locke and Schweiger �1979�.

The foregoing discussion highlights three important points. First, the term “motivation,” as isemployed in the participative budgeting literature, is inadequate since it does not differentiateamong the different types of motivation. Second, it is unclear whether the information reasons asdescribed in the participative budgeting literature reflect autonomous or controlled types of ex-trinsic motivation. According to SDT, information reasons would reflect controlled extrinsic mo-tivation if PB is used by management to induce subordinates to reveal information that theyotherwise would not �see Covaleski et al. 2003�. Third, the value attainment mechanism mayreflect different forms of motivation depending on the specific value �e.g., money versus self-expression� sought by the individual. In light of the preceding three observations, the followingsection proposes a motivation-based framework for studying the commonly assumed reasons forPB.

A MOTIVATION-BASED MODEL OF PARTICIPATION IN BUDGETINGExtant research �e.g., Vallerand 1997; Ryan and Deci 2000a; Gagné and Deci 2005� argues

that the stated reasons for a behavior �e.g., PB� indicate individuals’ motivation for that behavior.Consistent with that notion, the present research attempts to integrate the foregoing reasons for PBwithin a general motivation-based framework �see Figure 1�. Several features of the proposed

1 According to SDT �Ryan and Deci 2000b�, autonomous extrinsic motivation consists of identified and integratedregulation. With identified regulation, behavior is performed out of choice because individuals value the behavior. Inintegrated regulation, individuals not only internalize the reasons for their behavior, but they also assimilate them to the“self.” In contrast, external and introjected regulations are controlled types of extrinsic motivation. In the case ofexternal regulation, behavior is performed primarily to satisfy an external demand or to obtain an externally imposedreward contingency. In introjected regulation, individuals partly internalize the reasons for their actions although theyhave not accepted the regulation as their own. One is motivated by introjected regulation when one performs certaintasks to avoid a sense of guilt or anxiety, or to enhance one’s ego.

136 Wong-On-Wing, Guo, and Lui

Behavioral Research In Accounting Volume 22, Number 2, 2010American Accounting Association

model are noteworthy. First, central to the model is the distinction among intrinsic motivation,autonomous extrinsic motivation, and controlled extrinsic motivation for PB. On one hand, indi-viduals may be intrinsically motivated to participate because they view their participation as anend in itself. For example, their participation gives them a sense of accomplishment and satisfac-tion. On the other hand, individuals may be extrinsically motivated to participate because theyview their participation as a means to an end. This extrinsic motivation may be of the autonomousform if, for instance, PB is viewed as a means for the participant him/herself to set higher goals orgoals on which he/she will be evaluated. In contrast, the extrinsic motivation may be of thecontrolled type if, for example, PB is perceived to be a means for management to obtain infor-mation from the participant.

Second, the proposed model enables the integration and study of the reasons for participationdescribed in the research literature �Shields and Shields 1998; Locke and Schweiger 1979� withina theoretically based motivation framework. The present research specifically examines the com-monly assumed reasons related to individuals’ sense of personal satisfaction, feeling of accom-plishment, and feeling of belonging and identification, as well as reasons related to goal settingand information sharing. Following research in motivation, these reasons are presumed to indicatethe form of motivation for PB.

Third, the model incorporates both antecedents and consequences of different types of moti-vation for PB. Consistent with the PB literature �Shields and Shields 1998�, the motivation-basedmodel predicts an association between antecedents �e.g., individual and situational variables� and

FIGURE 1Theoretical Model

ParticipationinBudgeting

ControlledExtrinsicMotivation

IntrinsicMotivation

Performance

H1a

AutonomousExtrinsicMotivation

H4c

H1c

H4b

H3b

H4a

H3a

H2a

H2b

H4d

H1b

H2d

IndividualVariable:OrganizationalCommitment

SituationalVariable:EnvironmentalDynamism

H2c

H1d

H3c

Intrinsic and Extrinsic Motivation and Participation 137

Behavioral Research In Accounting Volume 22, Number 2, 2010American Accounting Association

motivation for participation, and a relationship between motivation for participation and conse-quences �e.g., performance�. Although the present study examined specifically organizational com-mitment, environmental dynamism, and performance, other antecedent and consequence variablescan be explored using the proposed model.2 The remainder of this section develops expectationsregarding the relationships between the three types of motivation and both their antecedents andconsequences.

Antecedents and Motivation for Participation in Budgeting

Organizational Commitment

Organizational commitment is loyalty to the organization, and has been defined as “thestrength of an individual’s identification with and involvement in a particular organization” �Porteret al. 1974, 604�. Subsequent research �see review by Ketchand and Strawser �2001�� has distin-guished between the continuance commitment and the affective commitment dimensions of orga-nizational commitment. The continuance commitment dimension reflects individuals’ desire toremain with their organization because departing costs are high. In contrast, Ketchand and Straw-ser �2001, 223� note that the affective commitment dimension reflected in Porter et al.’s �1974�definition “is based on an individual’s emotional attachment to an organization formed becausethat individual identifies with the goals of the organization and is willing to assist the organizationin achieving these goals” �emphasis added�.

Two key components of this definition pertain specifically to the different forms of motiva-tion. First, according to Deci and Ryan �2000, 235�, “a secure relational base provides a neededbackdrop for intrinsic motivation.” Individuals with high levels of organization commitment, andthus emotional attachment, are therefore expected to be more intrinsically motivated to participate.

Second, identification with demanded behaviors reflects individuals’ acceptance of the behav-ior as their own, i.e., the internalization of demanded behaviors �Ryan and Deci 2000b�. Hence,the degree to which individuals identify with the goals of the organization is expected to bepositively associated with the autonomous form of extrinsic motivation.

The relationship between organizational commitment and controlled extrinsic motivation isless clear given that controlled extrinsic motivation consists of two types of behavioral regulation,i.e., introjected and external regulation �see footnote 1�. Whereas introjected regulation reflectssome level of internalization of the demanded behavior, external regulation involves none �Ryanand Deci 2000b�. Studies by Gagné and Koestner �2002� and Gagné et al. �2004� find thatorganizational commitment is positively associated with introjected regulation, but negativelyassociated with external regulation. Based on the above, we propose a nondirectional hypothesisof the effect of organizational commitment on controlled extrinsic motivation.

Finally, consistent with Clinton �1999�, who posits commitment as an antecedent of budgetaryparticipation, it is expected that the stronger individuals’ identification with and their involvementin a particular organization, the higher the level of PB. Based on the foregoing, the relatedhypotheses are stated as follows:

H1a: There is a significant positive association between organizational commitment andintrinsic motivation for participation in budgeting.

H1b: There is a significant positive association between organizational commitment andautonomous extrinsic motivation for participation in budgeting.

2 Task difficulty was also measured as a third antecedent variable. It is omitted from the study due to the very lowreliability of the measurement scale.

138 Wong-On-Wing, Guo, and Lui

Behavioral Research In Accounting Volume 22, Number 2, 2010American Accounting Association

H1c: There is a significant association between organizational commitment and controlledextrinsic motivation for participation in budgeting.

H1d: There is a significant positive association between organizational commitment and thelevel of participation in budgeting.

Environmental DynamismEnvironmental dynamism is defined as the degree to which factors in the organization’s

environment remain constant over time or continually fluctuate �Duncan 1972�. According to Ryanand Deci �2000b, 70�, “the inherent tendency to seek out novelty and challenges, to extend andexercise one’s capacities, to explore, and to learn” typifies intrinsic motivation. In the presentcontext, it is posited that individuals’ intrinsic motivation to participate will be positively associ-ated with environmental dynamism, to the extent that individuals view PB in a dynamic environ-ment as novel and challenging.

The current study further posits that in high uncertainty situations caused by a dynamicenvironment, managers may feel pressured to participate in order to obtain information to bettercope with unanticipated events �Brownell and Hirst 1986�. Consequently, the extrinsic motivationis more likely to be of the controlled than of the autonomous type. Finally, consistent with Shieldsand Shields �1998, 60�, who posit that environmental characteristics are antecedents of PB, wepropose that environment dynamism is positively associated with PB. Accordingly, the relatedhypotheses are stated as follows:

H2a: There is a significant positive association between environmental dynamism and intrin-sic motivation for participation in budgeting.

H2b: There is a significant negative association between environmental dynamism and au-tonomous extrinsic motivation for participation in budgeting.

H2c: There is a significant positive association between environmental dynamism and con-trolled extrinsic motivation for participation in budgeting.

H2d: There is a significant positive association between environmental dynamism and thelevel of participation in budgeting.

Motivation and Participation in BudgetingEarlier studies �e.g., Merchant 1981; Brownell and McInnes 1986� have examined the effect

of PB on participants’ motivation to work toward budget attainment. Prior studies �e.g., Mia 1988�have also examined how work motivation serves as a moderator in the relationship between PBand performance. However, no prior study has examined employees’ motivation to participate inthe budgeting process, which is the focus of the current research.

Although various forms of motivation may lead to different performance outcomes, researchon motivation �Vallerand 1997, 279� shows that those who are extrinsically motivated may be justas motivated to engage in a given activity as those who are intrinsically motivated. Hence, all threeforms of motivation are expected to be positively associated with the extent of PB. The relatedhypotheses are:

H3a: There is a significant positive relationship between intrinsic motivation for participationin budgeting and the level of participation in budgeting.

H3b: There is a significant positive relationship between autonomous extrinsic motivationfor participation in budgeting and the level of participation in budgeting.

Intrinsic and Extrinsic Motivation and Participation 139

Behavioral Research In Accounting Volume 22, Number 2, 2010American Accounting Association

H3c: There is a significant positive relationship between controlled extrinsic motivation forparticipation in budgeting and the level of participation in budgeting.

Motivation and PerformanceThe proposed model posits an association between three forms of motivation for PB and the

individual participant’s performance. Research �Vallerand 1997; Koestner and Losier 2002; Baardet al. 2004� provides evidence of positive consequences produced by both intrinsic and autono-mous extrinsic motivations. In contrast, a negative relationship is most often observed betweencontrolled extrinsic motivation and performance. Consistent with those findings, the related hy-potheses are stated as follows:

H4a: There is a significant positive relationship between intrinsic motivation for participationin budgeting and performance.

H4b: There is a significant positive relationship between autonomous extrinsic motivationfor participation in budgeting and performance.

H4c: There is a significant negative relationship between controlled extrinsic motivation forparticipation in budgeting and performance.

Participation in Budgeting and PerformanceIn general, the relationship between PB and performance has been equivocal. This has lead to

research that examines the extent to which the relationship is conditional on other budgetingand/or nonbudgeting variables. For example, studies by Brownell �1985� and Govindarajan �1986�provide support for the hypothesis that the relationship between participation and performance iscontingent upon characteristics of the environment. The present study does not examine andpredict the effect of contingencies. Consequently, the hypothesized association between PB andperformance is based on the review of empirical evidence. A meta-analysis by Greenberg et al.�1994� provides evidence of a positive relationship between PB and performance. Similarly, astudy by Wagner �1994� finds that despite apparent inconsistencies in initial results of earlierreviews, research suggests that participation can have positive effects on performance. Thus, thefollowing hypothesis is stated:

H4d: There is a significant positive relationship between participative budgeting andperformance.

METHODParticipants

The survey was administered to 101 managers of a large international bank in Hong Kong.Because the sample is drawn from a single organization, external validity is limited. However, thefocus of the present study was on the test of a general motivation-based model of PB. Thus,although the findings of the study may not be generalizable to other organizations, it providescontrol over the potential confounding effect of unobserved heterogeneous practices that may bepresent across different firms �Otley and Pollanen 2000, 486–487�.

Sixty-one percent of the participants were male. Total years of work experience at the bankranged from four to 30 years. The participants held management positions in a variety of depart-ments at the branch level. Total years in a managerial position ranged from less than one year toten years. Participants’ age ranged from 26 to 55. None of the demographic variables was signifi-cantly related to any of the study variables.

140 Wong-On-Wing, Guo, and Lui

Behavioral Research In Accounting Volume 22, Number 2, 2010American Accounting Association

The survey was administered during two sessions of a training seminar attended by themanagers. There were 51 managers at the first session and 50 at the second. The participants werenot compensated and participation was voluntary. Everyone who attended the seminar participatedin the survey. No significant differences in responses were found between the two groups. There-fore, the data were combined for statistical analyses.

Measurement of Variables

Organizational CommitmentOrganizational commitment was measured using the nine positively worded items from Mow-

day et al. �1979�. A review of organizational commitment research by Ketchand and Strawser�2001� indicates that the nine-item version of the original questionnaire had relatively high reli-ability in prior studies �e.g., Price and Muller 1981; Blau 1987; Nouri and Parker 1998�, and itstrongly correlated with the eight-item Affective Commitment Scale developed by Meyer andAllen �1984�. This is consistent with findings of others �e.g., Carsten and Spector 1987; Farkas andTetrick 1989; Settoon et al. 1996� that the six negative items in the original 15-item questionnairemeasure an intent-to-quit factor. The word “organization” in the original instrument was replacedby the word “bank.”3 Participants were asked to respond to questions related to the degree towhich they feel committed to their organization �bank�. A seven-point Likert scale was used,ranging from “strongly disagree” to “strongly agree.” Higher �lower� scores indicate a relativelyhigher �lower� commitment to the organization.

Environmental DynamismThe instrument developed by Duncan �1972� was used to measure environmental dynamism.

This measure has been used in prior accounting studies including Fisher �1996� and Chenhall andMorris �1986�. Participants were asked to examine a group of eight environmental characteristicsgenerally believed to be crucial to decision-making.4,5 Two items related to government regulation�“impacts of government regulation” and “constraints from bank regulators”� were excluded fromthe analysis because different branches of the same bank �all resided in Hong Kong� presumablyoperate under similar regulatory conditions. For each characteristic, participants were asked toindicate on a five-point Likert scale how often they perceived the item changed. The scale itemsrange from 1 �never� to 5 �very often�. Low �high� scores indicate a relatively static environment�dynamic environment�.

Participation in BudgetingThis study used the Milani �1975� instrument to measure participation. Prior studies �e.g.,

Parker and Kyj 2006; Mia 1988; Brownell 1982� report good reliability for this scale. Participantswere asked to rate their level of budget participation under each of six items on a five-point Likertscale.6 The responses were coded so that higher �lower� scores reflect a relatively higher �lower�level of participation.

3 Aranya and Ferris �1984� and Ferris �1981� made similar changes to the original questionnaire. For example, to measurecommitment to the profession, the word “organization” was replaced by the word “profession” �Aranya and Ferris,1984�.

4 Item 6 �negotiating� was changed slightly to ensure the suitability of the instrument to bank managers. Specifically,“Purchasing, selling or contracting for goods or services, contacting suppliers, dealing with sales representatives” waschanged to “Negotiating with customers on loans, deposits, etc.”

5 Item 8 on the original instrument referred to “constraints from suppliers.” Since this does not apply to bank managers,that item was reworded to read, “constraints from bank regulators.”

6 Prior to the study, we ensured that the stated organization policy of the bank and the organizational culture at the bankallowed and encouraged PB. It is worth mentioning, however, that the perceived level of support for PB might differ atthe branch level, which would result in some variance in the level of PB across branches.

Intrinsic and Extrinsic Motivation and Participation 141

Behavioral Research In Accounting Volume 22, Number 2, 2010American Accounting Association

PerformancePerformance was measured using the self-rating instrument developed by Mahoney et al.

�1963, 1965�. This scale has been used in many accounting studies including Hall �2008�, Parkerand Kyj �2006�, Marginson and Ogden �2005�, Chong and Chong �2002�, Wentzel �2002�, andOtley and Pollanen �2000�. The instrument consists of performance measures along eight dimen-sions, as well as an overall performance measure. Participants were asked to self-rate their per-formance on a scale from 1 �low performance� to 9 �high performance� on each dimension and onthe overall measure. According to Mahoney et al. �1963, 1965�, the eight dimensions of perfor-mance account for about 55 percent of managerial performance. In this study, the regression ofparticipants’ overall rating on their ratings of the eight individual dimensions resulted in 78.2percent explained variation. Thus, the overall rating for each participant was used as the perfor-mance measure.

Motivation for Participation in BudgetingThe scales for the different forms of motivation were developed following SDT researchers

�e.g., Ryan and Connell 1989; Vallerand 1997�, who argue that the perceived reasons for engagingin an activity provide a valid measure of motivation. According to Ryan and Connell �1989, 750�,reasons are phenomenally accessible and they represent the primary basis by which individualsaccount for their actions. As such, they provide a direct means of assessing the perceived au-tonomy of one’s actions. Similarly, Vallerand �1997, 284� argues that self-reports of individuals’reasons for engaging in an activity provide a direct means of measuring motivation that is inde-pendent from its determinants and consequences.

In this study, the different forms of motivation were measured by assessing individuals’perceived reasons for PB. A total of seven items �see the Appendix� were used. The items werederived from the list of motivational, cognitive, and value attainment factors suggested by Lockeand Schweiger �1979� and Locke et al. �1986�. The three intrinsic motivation items referred tofeelings of accomplishment, personal satisfaction, and belonging resulting from the mere act ofparticipation. In contrast, the four extrinsic motivation items referred to participation as a means toan end. Autonomous extrinsic motivation was measured using two items that referred to PB as ameans for the participant to set higher goals and to set goals on which he/she will be evaluated.The two controlled extrinsic motivation items referred to PB as a means for the participants toprovide information and for the supervisors to better utilize information. Thus, while the autono-mous items emphasized choice on the part of the participant, the controlled items implied externaldemands from the firm or the supervisor.

For each of the seven reasons, participants were asked to indicate the extent to which theyagreed that the item was a reason for participating in the budgeting process. Responses weremeasured on a seven-point Likert scale ranging from 1, “strongly disagree,” to 7, “strongly agree.”

RESULTSDescriptive Statistics

Descriptive statistics for the measured variables are presented in Table 1. For each variable, atheoretical range and an actual range is presented, along with the mean and standard deviation.The correlation coefficients among the seven variables are also included in Table 1. As shown inTable 1, the mean Intrinsic Motivation was 5.31, the mean Autonomous Extrinsic Motivation�Autonomous-EM� was 5.50, and the mean Controlled Extrinsic Motivation �Controlled-EM� was5.16. These means were not significantly different �F-ratio � 2.17, p � 0.12�. The two types ofextrinsic motivation were positively correlated �r � 0.32; p � 0.01�, and Intrinsic Motivation wasonly positively correlated with Autonomous-EM �r � 0.28; p � 0.01�, but not with Controlled-EM�r � 0.14; p � 0.15�.

142 Wong-On-Wing, Guo, and Lui

Behavioral Research In Accounting Volume 22, Number 2, 2010American Accounting Association

TABLE 1

Descriptive Statistics(n � 101)

Variable

Theoretical(Actual)Range Mean (S.D.) 1 2 3 4 5 6 7

1. Organizational Commitment 1–7 5.68 1.00�3.88–7.00� �0.82�

2. EnvironmentalDynamism

1–5 3.55 0.13�ns� 1.00�2.25–4.75� �0.63�

3. Participation inBudgeting

1–5 3.00 0.69*** �0.13�ns� 1.00�1.33–4.83� �0.88�

4. IntrinsicMotivation

1–7 5.31 0.58*** �0.02�ns� 0.60*** 1.00�1.67–7.00� �1.18�

5. AutonomousExtrinsic Motivation

1–7 5.50 0.23** �0.20** 0.42*** 0.28*** 1.00�1.50–7.00� �1.18�

6. Controlled ExtrinsicMotivation

1–7 5.16 0.40*** 0.12�ns� 0.34*** 0.14�ns� 0.32*** 1.00�1.50–7.00� �1.09�

7. Performance 1–9 6.89 0.29*** �0.10�ns� 0.50*** 0.51*** 0.43*** 0.03�ns� 1.00�4.00–9.00� �1.12�

** and *** Significant at the 0.05 and 0.01 levels, respectively.ns � not significant at the 0.10 level.

Intrinsicand

Extrinsic

Motivation

andParticipation

143

BehavioralR

esearchIn

Accounting

Volume

22,Num

ber2,2010

Am

ericanA

ccountingA

ssociation

Statistical AnalysesThe model shown in Figure 1 was tested using the two-step structural equation modeling

�SEM� procedure recommended by Anderson and Gerbing �1988�. This approach has been em-ployed in a number of accounting studies �e.g., Bamber and Iyer 2002; Chong and Chong 2002; deRuyter and Wetzels 1999; Maiga and Jacobs 2005�. The procedure consists of first evaluating themeasurement model to adjust for measurement error. This step provides evidence of the conver-gent and discriminant validity of the measures. In the second step, the SEM is then estimatedbased on the results of the measurement model analysis.

In order to achieve reliable maximum likelihood estimation, a sample-size-to-parameter ratioof 5 or more is recommended �Hayduk 1987�. Given the large number of parameters beingestimated relative to the sample size in this study, the partial aggregation form of SEM wasemployed following de Ruyter and Wetzels �1999�, Settoon et al. �1996�, Bagozzi and Heatherton�1994�, and Williams and Hazer �1986�. According to that approach, the scale scores were used asindicators of the latent variables rather than the individual items. Specifically, the indicator foreach latent variable was first computed by averaging the items for each scale, except for perfor-mance. Subsequently, each scale’s reliability and variance were used to incorporate measurementerror into the SEM analysis.

Measurement ModelExploratory factor analysis. Given that the three measures of motivation for PB were de-

veloped specifically for the study, an exploratory factor analysis was performed to test if thesethree measurements represented three separate constructs. The principal-component method offactor analysis was used. The seven items were subjected to a factor analysis with varimaxrotation. This yielded three factors with eigenvalues greater than 1. The results �see Table 2� showthat the three Intrinsic Motivation items �a, b, and c� loaded on one factor, which accounted for43.55 percent of the variance. Similarly, the two Autonomous-EM items �d and e� loaded on asecond factor, which accounted for 24.60 percent of the variance. The two Controlled-EM items �fand g� loaded on a third factor, which accounted for 14.70 percent of the variance. In all, the three

TABLE 2

Factor Analysis on Motivation for Participation in Budgeting

ItemIntrinsic

Motivation

Autonomous-Extrinsic

Motivation

Controlled-Extrinsic

Motivation

a. Feeling of accomplishment 0.90 0.07 �0.02b. Sense of personal satisfaction 0.94 0.12 0.05c. Feeling of belonging and increased

identification0.81 0.15 0.09

d. I am able to set higher goals 0.29 0.92 0.08e. I set the goals on which I will be

evaluated0.00 0.94 0.22

f. For me to provide important information 0.37 0.14 0.77g. For superior to allow better utilization of

information�0.18 0.15 0.86

Eigenvalue 3.05 1.72 1.03Percentage of Variance Explained 43.55% 24.60% 14.70%Cronbach Alpha 0.88 0.89 0.56

144 Wong-On-Wing, Guo, and Lui

Behavioral Research In Accounting Volume 22, Number 2, 2010American Accounting Association

factors accounted for 82.85 percent of the variance. The Cronbach alpha for the Intrinsic Motiva-tion, Autonomous-EM, and Controlled-EM scales were 0.88, 0.89, and 0.56, respectively.

Confirmatory factor analysis. Confirmatory factor analysis �CFA� was first performed oneach conventional measure, and then on the measurement model as a whole, to assess convergentand discriminant validity.

The initial model for organizational commitment �OC� did not provide an adequate fit �Chi-square �df � 27� � 153.84, p � 0.01; GFI � 0.75; AGFI � 0.59; NFI � 0.82; CFI � 0.84�.Following the re-specification procedure suggested by Anderson and Gerbing �1988�, one item�“For me this is the best of all possible banks for which to work”� was deleted due to lowstandardized loading. The revised measurement model achieved an acceptable fit �Chi-square �df� 17� � 41.67; p � 0.01; GFI � 0.92; AGFI � 0.83; NFI � 0.95; CFI � 0.97� with reasonablereliability �0.94� and all item loadings over 0.50.

The initial model for environmental dynamism �ED� did not provide an adequate fit �Chi-square �df � 9� � 42.87, p � 0.01; GFI � 0.86; AGFI � 0.67; NFI � 0.47; CFI � 0.49�. Twoitems �“Actions of competitors” and “Keeping pace with technological advances”� were deleteddue to low standardized loadings. The revised model provided an adequate fit �Chi-square �df �2� � 5.27; p � 0.07; GFI � 0.97; AGFI � 0.87; NFI � 0.88; CFI � 0.91�. The reliability was0.81 and the item loadings were all over 0.50.

The initial model for PB �PB� provided an adequate fit �Chi-square �df � 9� � 29.21,p � 0.01; GFI � 0.92; AGFI � 0.82; NFI � 0.93; CFI � 0.95�. The reliability was 0.91 and theitem loadings were all over 0.50.

A confirmatory factor analysis was then performed on all the measures using scale averagescore to determine the overall fit of the measurement model. All possible links were drawnbetween the seven constructs, which lead to a saturated model, i.e., degree of freedom was 0. Theprocedure suggested by Anderson and Gerbing �1988� was used to assess discriminant validity ofthe seven constructs shown in the theoretical model. First, the correlation was fixed at 1.0 for pairsof constructs with high correlations. Following Bamber and Iyer �2002�, the correlations over 0.45�OC→Intrinsic Motivation; OC→PB� were fixed at 1.0. Then, a Chi-square difference test wasperformed to compare the constrained and unconstrained models. The Chi-square difference testshowed significantly �∆Chi-square � 8.78 �∆df � 2�, p � 0.01� inferior fit for the constrainedmodel. This provides evidence of the discriminant validity of the constructs �Anderson and Gerb-ing 1988�.

Structural ModelTheoretical model fit. The decision-tree framework for the sequential Chi-square difference

tests �SCDTs� among nested models recommended by Anderson and Gerbing �1988� was used todetermine the optimal model. The results of the procedure are shown in Table 3.

The first step consists of performing a Chi-square difference test between the saturated modeland the theoretical model �see Figure 1�. The results of the comparison showed significant differ-ence �p � 0.01�. The next step is to compare the theoretical model with the constrained model.When estimating the theoretical model, the coefficient estimate between ED and Controlled-EM�path coefficient � 0.06, p � 0.66� and that between Controlled-EM and PB �path coefficient� 0.06, p � 0.63� were not significant. Therefore, the theoretical model was compared with aconstrained model where these two insignificant links were constrained to 0. The Chi-squaredifference between the two models was not significant �p � 0.19�. The third step was to comparethe constrained model and the saturated model. Although the result of the Chi-square differencetest was significant �p � 0.03�, the constrained model provides an adequate fit �Chi-square �df �7� � 15.88, p � 0.03; GFI � 0.96; AGFI � 0.85; NFI � 0.93; CFI � 0.96�. Thus, the tests of thehypotheses are based on the constrained model �see Figure 2� where the path coefficients between

Intrinsic and Extrinsic Motivation and Participation 145

Behavioral Research In Accounting Volume 22, Number 2, 2010American Accounting Association

ED and Controlled-EM, and between Controlled-EM and PB were constrained to 0.7

Hypothesis tests. Standardized parameter estimates for the constrained model are used to testthe hypotheses. The results are shown in Figure 2.

The standardized parameter estimates between OC and Intrinsic Motivation �path coefficient� 0.65, p � 0.01�, OC and Autonomous-EM �path coefficient � 0.30, p � 0.01�, OC andControlled-EM �path coefficient � 0.57, p � 0.01�, and OC and PB �path coefficient � 0.57,p � 0.01� are all positive and statistically significant. These results are consistent with H1a, H1b,H1c, and H1d.

As noted earlier, the path between ED and Controlled-EM �path coefficient � 0.06, p � 0.66�is not significant. The path between ED and Intrinsic Motivation �path coefficient � �0.13,p � 0.19� is also insignificant. Thus, H2a and H2c are not supported. As predicted in H2b, the pathbetween ED and Autonomous-EM �path coefficient � �0.28, p � 0.01� is negative and signifi-cant. The path coefficient between ED and PB �path coefficient � �0.19, p � 0.02� is significantbut negative. This does not support H2d.

Consistent with H3a and H3b, the path coefficient between Intrinsic Motivation and PB �pathcoefficient � 0.24, p � 0.01� and between Autonomous-EM and PB �path coefficient � 0.20, p �0.01� are positive and significant. As noted earlier, the path between Controlled-EM and PB �pathcoefficient � 0.06, p � 0.63� is insignificant. Thus, H3c is not supported.

As predicted in H4a and H4b, both Intrinsic Motivation �path coefficient � 0.35, p � 0.01�

7 According to the decision-tree framework proposed by Anderson and Gerbing �1988�, when the Chi-square differencebetween the constrained model and saturated model is significant, an unconstrained model �i.e., a model with additionalpaths drawn compared with the theoretical model� may be identified to replace the original theoretical model. Since noadditional meaningful path could be identified in our theoretical model �Figure 1�, we decided not to continue with suchre-specification. This decision is based on Anderson and Gerbing’s �1988, 416� recommendation that “respecificationdecisions should not be based on statistical considerations alone, but rather in conjunction with theory and contentconsiderations.”

TABLE 3

Results of Sequential Chi-Square Difference Tests (SCDTs)

ModelChi-

square df

Change onChi-square(p-value) GFI AGFI NFI CFI

Step 1 Saturated Model 0 0 1 NA 1 1Theoretical Model 15.47 5 15.47 0.96 0.79 0.93 0.95

�0.01�Step 2 Theoretical Model 15.47 5 0.96 0.79 0.93 0.95

Constrained Model: 15.88 7 0.41 0.96 0.85 0.93 0.96�ED→Controlled-EM; �0.19�Controlled EM→PB�

Step 3 Saturated Model 0 0 1 NA 1 1Constrained Model: 15.88 7 15.88 0.96 0.85 0.93 0.96�ED→Controlled-EM; �0.03�Controlled EM→PB�

ED � Environmental Dynamism;EM � Extrinsic Motivation; andPB � Participation in Budgeting.

146 Wong-On-Wing, Guo, and Lui

Behavioral Research In Accounting Volume 22, Number 2, 2010American Accounting Association

and Autonomous-EM �path coefficient � 0.32, p � 0.01� are positively associated with Perfor-mance. In contrast, the path coefficient between Controlled-EM and Performance �path coefficient� �0.32, p � 0.01� is negative. H4c is, therefore, supported. H4d is supported as well. The pathcoefficient between PB and Performance �path coefficient � 0.28, p � 0.05� is both positive andstatistically significant.

DISCUSSIONThe present study proposes a motivation-based model of PB from the perspective of indi-

vidual participants. The model distinguishes among intrinsic motivation and the autonomous andcontrolled forms of extrinsic motivation for PB. In the tested model, associations are predicted

FIGURE 2Structural Equation Model with Standardized Path Coefficients Constrained Model

EnvironmentalDynamism

ParticipationinBudgeting

ControlledExtrinsicMotivation

OrganizationalCommitment

IntrinsicMotivation

Performance

0.65***

AutonomousExtrinsicMotivation

-0.32***

0.57***

0.32***

0.20***

0.35***

0.24***

-0.13 ns

-0.28***

0.28**

0.30***

-0.19**

0.57***

*** and ** Significant at the 0.01 and 0.05 levels, respectively.The two links indicated by dotted lines were constrained to 0 due to insignificant coefficients.Chi-square [df = 7] = 15.88; p-value = 0.03.GFI = 0.96;AGFI = 0.85;NFI = 0.93;CFI = 0.96.

Intrinsic and Extrinsic Motivation and Participation 147

Behavioral Research In Accounting Volume 22, Number 2, 2010American Accounting Association

between two antecedents �organization commitment and environment dynamism� and participants’various forms of motivation for participation. The different forms of motivation are also predictedto be associated with individual participants’ performance.

The remainder of this section first examines the results and discusses their potential implica-tions. The study’s limitations are then described, followed by suggestions for future research.

Motivation for Participation in BudgetingThere was no significant difference across the levels to which participation was motivated by

intrinsic motivation, autonomous extrinsic motivation, or controlled extrinsic motivation. More-over, similar to the findings of Ryan and Connell �1989�, the two types of extrinsic motivationwere positively correlated. This suggests that individuals can be motivated to participate by au-tonomous and controlled motivation simultaneously. This is consistent with Levesque and Pelle-tier’s �2003� observation among a significant percentage of their study participants.

Antecedents and Motivation for Participation in BudgetingOrganizational commitment was positively and significantly associated with all three forms of

motivation, as well as with the extent of PB. This finding indicates that individual variables can beimportant antecedents of PB. While the focus of research on participative budgeting has primarilybeen on environmental, organizational, and task variables �Shields and Shields 1998�, the presentstudy suggests that individual factors may be equally important antecedents. In addition, thepositive effect of organizational commitment on controlled extrinsic motivation suggests that theitems we used to measure controlled extrinsic motivation might reflect introjected as opposed toexternal regulation �see footnote 1�. Introjected regulation is in effect when the individual hastaken in, but has not fully internalized the value of the behavior �Gagné and Deci 2005�. In thecurrent context, managers may have partially accepted the value of PB as a conduit for theorganization to obtain useful information.

Environmental dynamism was negatively, but not significantly, associated with intrinsic mo-tivation. Recall that it was hypothesized that the association between these two variables would bepositive to the extent that individuals perceived the dynamic environment as novel and challeng-ing. One possible explanation is that this perception was counterbalanced by the contrasting viewthat a dynamic environment creates pressure for employees to participate in order to cope with theuncertainties of a constantly changing environment. In such a case, PB would be less likelyviewed as autonomous, and intrinsic motivation would be undermined �Deci and Ryan 2000�.Consequently, the counterbalancing views may have resulted in a nonsignificant association be-tween environmental dynamism and intrinsic motivation.

As hypothesized, environmental dynamism was negatively correlated with autonomous ex-trinsic motivation. However, it was not significantly correlated with controlled extrinsic motiva-tion as we predicted. Another unexpected finding is that environmental dynamism was negativelyassociated with PB. The more participants perceived the environment to be dynamic, the lowerwas their level of involvement in the PB process. A possible explanation for these two unexpectedfindings is that participants may have a poor understanding of the environment when it is dynamic.Consequently, they may be less likely to participate because they do not have the necessaryknowledge of the environment to make a useful contribution. Indeed, Locke et al. �1986, 70� notethat employees who find themselves in such a situation “will realize that they should not partici-pate in the decision and will feel embarrassed or inadequate.” Similarly, Hopwood �1973� arguesthat as environmental dynamism increases, the formal accounting system is less able to capturemanagerial behaviors that are needed to achieve organizational goals �p. 11�. Consequently, par-ticipating in the budgeting process �which is a formal component of management accountingsystem� could be viewed as less useful when environmental dynamism is high.

148 Wong-On-Wing, Guo, and Lui

Behavioral Research In Accounting Volume 22, Number 2, 2010American Accounting Association

Motivation for Participation in Budgeting and PerformanceThe findings suggest that both intrinsic motivation and autonomous extrinsic motivation were

positively related to PB and performance. This is consistent with research �for a review, see Ryanand Deci 2000b; Gagné and Deci 2005� that provides evidence that intrinsic motivation, as well asautonomous extrinsic motivation, produce positive consequences.

Controlled extrinsic motivation, on the other hand, was not significantly related to PB, and itwas negatively associated with performance. The more participants were motivated by controlledextrinsic motivation to participate, the lower was the reported level of performance. These resultsindicate that there may be differences between the way individuals and the organization view PB.In particular, while the latter intends for PB to be viewed as a means to exchange information,employees in the current sample seem to view it as controlling. They were thus motivated bycontrolled extrinsic motivation, which negatively affected their performance.

The results of this study should be interpreted in light of its limitations. First, the scales formeasuring different types of motivation were conveniently constructed using reasons for PB thatwere described in prior research. The three scales do not fully capture the breadth of thoseconstructs. The operationalization of extrinsic motivation, in particular, was limited to only goalsetting �in the case of autonomous extrinsic motivation� and information reasons �in the case ofcontrolled extrinsic motivation�. Second, the study employed self-reported measures of motiva-tion, participation, and performance. A multi-method approach would improve the validity of thefindings. Third, the sample of participants was drawn from a single organization. While thisprovides a homogeneous sample and eliminates some of the noise associated with a cross-sectional study, it also limits the generalizability of the findings.

The evidence pertaining to different types of motivations for PB suggests several possibilitiesfor future research. First, the present study did not examine other common reasons for participa-tion, such as to improve coordination between subunits or to reduce job-related tension �Shieldsand Shields 1998�. Future studies can investigate the extent to which these reasons reflect autono-mous and controlled motivation, and their impact on performance. Second, the relationship be-tween other antecedent variables and different forms of motivation can be studied. For example,future research can examine the impact of budget emphasis, information asymmetry, and budget-based compensation on the different types of motivation. Third, Ryan and Deci �2000a, 64� notethat, “Given the clear significance of internalization for both personal experience and behavioraland performance outcomes, the critical applied issue concerns how to promote the autonomousregulation of extrinsically motivated behaviors.” Research can examine specific aspects of theparticipation process that lead to increased intrinsic motivation or more autonomous extrinsicmotivation.

While further research is needed before definitive conclusions can be drawn, the findings ofthe current study suggest that studying the various types of motivation for PB may be useful forunderstanding its effectiveness, and the cognitive mechanism by which the information benefits ofPB are presumably obtained may be more complex than assumed since it may reflect controlledforms of extrinsic motivation.

APPENDIXMeasure of Motivation for Participation in Budgeting*

Below are a number of reasons why people participate in the budgetary process. Pleaseindicate the extent of your agreement or disagreement to the following responses to the statement,“I participate …”

a. Because participation in budgeting gives me a feeling of accomplishment.

Intrinsic and Extrinsic Motivation and Participation 149

Behavioral Research In Accounting Volume 22, Number 2, 2010American Accounting Association

b. Because participation in budgeting gives me a great sense of personal satisfaction.c. Because participation in budgeting gives me a feeling of belonging and increased iden-

tification with the bank.d. Because participation in budgeting is a means through which I am able to set higher

goals.e. Because participation in budgeting is a means through which I set the goals on which I

will be evaluated.f. Because participation in budgeting is a means for me to provide information that is

important for my job.g. Because participation in budgeting is a means through which my superior allows for

better utilization of information on the job.

* Participants’ responses were measured on a seven-point Likert scale ranging from 1, labeled“strongly disagree,” to 7, labeled “strongly agree.” Items a, b, and c are the intrinsic motivationreasons, d and e are the autonomous extrinsic motivation reasons, and f and g are the controlledmotivation reasons.

REFERENCES

Anderson, J. C., and D. W. Gerbing. 1988. Structural equation modeling in practice: A review and recom-mended two-step approach. Psychological Bulletin 103: 411–423.

Aranya, N., and K. R. Ferris. 1984. A reexamination of accountants’ organizational-professional conflict. TheAccounting Review 59: 1–15.

Baard, P., E. Deci, and R. Ryan. 2004. The relation of intrinsic need satisfaction to performance and well-being in two work settings. Journal of Applied Social Psychology 34: 2045–2068.

Bagozzi, R. P., and T. F. Heatherton. 1994. A general approach to representing multifaceted personalityconstructs: Application to state self-esteem. Structural Equation Modeling: A Multidisciplinary Jour-nal 1 �1�: 35–67.

Baiman, S., and J. Evans. 1983. Pre-decision information and participative management control systems.Journal of Accounting Research 21 �2�: 371–395.

Bamber, E. M., and V. M. Iyer. 2002. Big 5 auditors’ professional and organizational identification: Consis-tency or conflict? Auditing: A Journal of Practice & Theory 21 �2�: 21–38.

Blau, G. 1987. Using a person-environment fit model to predict job involvement and organizational commit-ment. Journal of Vocational Behavior 30: 240–257.

Brownell, P. 1982. The role of accounting data in performance evaluation, budgetary participation, andorganizational effectiveness. Journal of Accounting Research 20 �1�: 12–27.

——– 1985. Budgetary systems and the control of functionally differentiated organizational activities. Jour-nal of Accounting Research 23: 502–512.

——–, and M. Hirst. 1986. Reliance on accounting information, budgetary participation, and task uncertainty:Tests of a three-way interaction. Journal of Accounting Research 24 �2�: 241–249.

——–, and M. McInnes. 1986. Budgetary participation, motivation, and managerial performance. The Ac-counting Review 61: 587–600.

Carsten, J. M., and P. E. Spector. 1987. Unemployment, job satisfaction, and employee turnover: A meta-analytic test of the Muchinsky model. The Journal of Applied Psychology 72: 374–381.

Chenhall, R. H., and D. Morris. 1986. The impact of structure, environment, and interdependence on theperceived usefulness of management accounting systems. The Accounting Review 61 �1�: 16–35.

Chong, V. K., and K. M. Chong. 2002. Budget goal commitment and informational effects of budget par-ticipation on performance. Behavioral Research in Accounting 14: 65–86.

Clinton, B. D. 1999. Antecedents of budgetary participation: The effect of organizational, situational, andindividual factors. Advances in Management Accounting 8: 45–70.

150 Wong-On-Wing, Guo, and Lui

Behavioral Research In Accounting Volume 22, Number 2, 2010American Accounting Association

Covaleski, M., J. Evans III, J. Luft, and M. Shields. 2003. Budgeting research: Three theoretical perspectivesand criteria for elective integration. Journal of Management Accounting Research 15: 3–49.

Deci, E. L. 1975. Intrinsic Motivation. New York, NY: Plenum Press.——–, and R. M. Ryan. 1985. Intrinsic Motivation and Self-Determination in Human Behavior. New York,

NY: Plenum Press.——–, and ——–. 2000. The “what” and “why” of goal pursuits: Human needs and the self-determination of

behavior. Psychological Inquiry 11: 227–268.de Ruyter, K., and M. Wetzels. 1999. Commitment in auditor-client relationships: Antecedents and conse-

quences. Accounting, Organizations and Society 24: 57–75.Duncan, R. B. 1972. Characteristics of organizational environments and perceived environmental uncertainty.

Administrative Science Quarterly 17 �3�: 313–327.Farkas, A. J., and L. E. Tetrick. 1989. A three-wave longitudinal analysis of the causal ordering of satisfaction

and commitment on turnover decisions. The Journal of Applied Psychology 74: 855–868.Ferris, K. R. 1981. Organizational commitment and performance in a professional accounting firm. Account-

ing, Organizations and Society 6: 317–325.Fisher, C. 1996. The impact of perceived environmental uncertainty and individual differences on manage-

ment information requirements: A research note. Accounting, Organizations and Society 21 �4�: 361–369.

Gagné, M., K. Boies, R. Koestner, and M. Martens. 2004. How work motivation is related to organizationalcommitment: A series of organizational studies. Working paper, Concordia University.

——–, and E. Deci. 2005. Self-determination theory and work motivation. Journal of Organizational Behav-ior 26: 331–362.

——–, and R. Koestner. 2002. Self-determination theory as a framework for understanding organizationalcommitment. Paper presented at the annual meeting of the Society for Industrial and OrganizationalPsychology, Toronto, Canada.

Govindarajan, V. 1986. Impact of participation in the budgetary process on managerial attitudes and perfor-mance: Universalistic and contingency perspectives. Decision Sciences 17: 496–516.

Greenberg, P., R. Greenberg, and H. Nouri. 1994. Participative budgeting: A metaanalytic examination ofmethodological moderators. Journal of Accounting Literature 13: 117–141.

Hall, M. 2008. The effect of comprehensive performance measurement systems on role clarity, psychologicalempowerment, and managerial performance. Accounting, Organizations and Society 33 �2/3�: 141–163.

Hayduk, L. A. 1987. Structural Equation Modeling with LISREL: Essentials and Advances. Baltimore, MD:Johns Hopkins Press.

Hopwood, A. 1973. An Accounting System and Managerial Behavior. London, U.K.: Saxon House.——– 1976. Accounting and Human Behavior. Englewood Cliffs, NJ: Prentice Hall.Ketchand, A. A., and J. R. Strawser. 2001. Multiple dimensions of organizational commitment: Implications

for future accounting research. Behavioral Research in Accounting 13: 221–251.Koestner, R., and G. F. Losier. 2002. Distinguishing three ways of being internally motivated: A closer look

at introjection, identification, and intrinsic motivation. In Handbook of Self-Determination Research,edited by Deci, E. L., and R. M. Ryan, 101–121. Rochester, NY: University of Rochester Press.

Lepper, M. R., and D. Greene. 1978. Overjustification research and beyond: Towards a means-ends analysisof intrinsic and extrinsic motivation. In The Hidden Costs of Reward, edited by Lepper, M. R., and D.Greene, 109–148. Hillsdale, NJ: Erlbaum.

Lepper, M. R., D. Greene, and R. E. Nisbett. 1973. Undermining children’s interest with extrinsic rewards: Atest of the “overjustification effect.” Journal of Personality and Social Psychology 28: 129–137.

Levesque, C., and L. G. Pelletier. 2003. On the investigation of primed and chronic autonomous and heter-onomous motivational orientations. Personality and Social Psychology Bulletin 29 �12�: 1570–1584.

Locke, E., and D. M. Schweiger. 1979. Participation in decision-making: One more look. In Research inOrganizational Behavior, Vol. 1, edited by Staw, B., 265–339. Greenwich, CT: JAI Press.

——–, ——–, and G. P. Latham. 1986. Participation in decision making: When should it be used? Organi-zational Dynamics 14: 65–79.

Intrinsic and Extrinsic Motivation and Participation 151

Behavioral Research In Accounting Volume 22, Number 2, 2010American Accounting Association

Mahoney, T. A., T. H. Jerdee, and J. S. Carroll. 1963. Development of Managerial Performance: A ResearchApproach. Cincinnati, OH: South-Western Publishing.

——–, ——–, and ——–. 1965. The jobs of management. Industrial Relations 4: 97–110.Maiga, A., and F. Jacobs. 2005. Antecedents and consequences of quality performance. Behavioral Research

in Accounting 17 �1�: 111–131.Marginson, D., and S. Ogden. 2005. Coping with ambiguity through the budget: The positive effects of

budgetary targets on managers’ budgeting behaviours. Accounting, Organizations and Society 30 �5�:435–456.

Merchant, K. 1981. The design of the corporate budgeting system: Influences on managerial behavior andperformance. The Accounting Review 56 �4�: 813–829.

Meyer, J. P., and N. J. Allen. 1984. Testing the “side-bet theory” of organizational commitment: Somemethodological considerations. The Journal of Applied Psychology 69 �3�: 372–378.

Mia, L. 1988. Managerial attitude, motivation and the effectiveness of budget participation. Accounting,Organizations and Society 13: 465–475.

Milani, K. 1975. Budget-setting, performance and attitudes. The Accounting Review 50: 274–284.Mowday, R. T., R. M. Steers, and L. W. Porter. 1979. The measurement of organizational commitment.

Journal of Vocational Behavior 14: 224–247.Nouri, H., and R. J. Parker. 1998. The relationship between budget participation and job performance: The

roles of budget adequacy and organizational commitment. Accounting, Organizations and Society 23�5/6�: 467–483.

Otley, D. T., and R. M. Pollanen. 2000. Budgetary criteria in performance evaluation: A critical appraisalusing new evidence. Accounting, Organizations and Society 25: 483–496.

Parker, R. J., and L. Kyj. 2006. Vertical information sharing in the budgeting process. Accounting, Organi-zations and Society 31 �1�: 27–45.

Penno, M. 1984. Asymmetry of predecision information and managerial accounting. Journal of AccountingResearch 22 �1�: 177–191.

Porter, L. W., R. M. Steers, R. T. Mowday, and P. V. Boulian. 1974. Organizational commitment, jobsatisfaction, and turnover among psychiatric technicians. The Journal of Applied Psychology 59:603–609.

Price, J. L., and C. W. Muller. 1981. Professional Turnover: The Case of Nurses. New York, NY: Spectrum.Ronen, J., and J. Livingstone. 1975. An expectancy theory approach to the motivational impact of budgets.

The Accounting Review 50: 671–685.Ryan, R., and J. Connell. 1989. Perceived locus of causality and internalization: Examining reasons for acting

in two domains. Journal of Personality and Social Psychology 57: 749–761.——–, and E. L. Deci. 2000a. Intrinsic and extrinsic motivations: Classic definitions and new directions.

Contemporary Educational Psychology 25: 54–67.——–, and ——–. 2000b. Self-determination theory and the facilitation of intrinsic motivation, social devel-

opment, and well-being. The American Psychologist 55 �1�: 68–78.——–, and ——–. 2002. An overview of self-determination theory. In Handbook of Self-Determination

Research, edited by Deci, E. L., and R. M. Ryan, 3–33. Rochester, NY: University of Rochester Press.Settoon, R. P., N. Bennett, and R. C. Liden. 1996. Social exchange in organizations: Perceived organizational

support, leader-member exchange, and employee reciprocity. The Journal of Applied Psychology 81�3�: 219–227.

Shields, J. F., and M. D. Shields. 1998. Antecedents of participative budgeting. Accounting, Organizationsand Society 23: 49–76.

Vallerand, R. J. 1997. Toward a hierarchical model of intrinsic and extrinsic motivation. In Advances inExperimental Social Psychology, Vol. 29, edited by Zanna, M. P., 271–360. San Diego, CA: AcademicPress.

Wagner, J. A., III. 1994. Participation’s effects on performance and satisfaction: A reconsideration of researchevidence. Academy of Management Review 19 �2�: 312–330.

Wentzel, K. 2002. The influence of fairness perceptions and goal commitment on managers’ performance ina budget setting. Behavioral Research in Accounting 14: 247–271.

152 Wong-On-Wing, Guo, and Lui

Behavioral Research In Accounting Volume 22, Number 2, 2010American Accounting Association

Williams, L. J., and J. T. Hazer. 1986. Antecedents and consequences of satisfaction and commitment inturnover models: A reanalysis using latent variable structural equation methods. The Journal of Ap-plied Psychology 71: 219–231.

Intrinsic and Extrinsic Motivation and Participation 153

Behavioral Research In Accounting Volume 22, Number 2, 2010American Accounting Association

Copyright of Behavioral Research in Accounting is the property of American Accounting Association and its

content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's

express written permission. However, users may print, download, or email articles for individual use.