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Employees’ Budget Participation and Its Effect on Departmental Performance in Sabah Local Authority


  • Accounting Centre, Faculty of Business, Economics & Accountancy, Universiti Malaysia Sabah, 88400 Kota Kinabalu, Sabah


This study observes the effect of Budget Participation (BP) on the Departmental Performance (DP) through Organizational Commitment (OC) in Malaysian local authorities, specifically in Sabah. A questionnaire survey was conducted with responses from fifty-eight (58) budget preparers and budget users. The data was then analysed by using SPSS and tested through mediation analysis, path analysis and Pearson Product-Moment Correlation techniques. The findings reveal that employees’ participation in budgeting setting at Sabah local authorities has a positive relationship with its DP. This positive relationship is even stronger with the mediation effect of OC. Thus, it advocates that BP among employees at Sabah local authorities has strong indirect effect on the DP, through the mediation effect of OC, between BP and DP, in Sabah local authorities.


Budget Participation, Departmental Performance, Local Authorities, Organizational Commitment

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