The Moderating Role Of Bottom-Up Budgeting Approach In The Influence Of Levers Of Control And Information Systems On Managerial Performance

Abstract

This study aims to investigate the influence of levers of control and information systems on managerial performance in the banking industry, considering the moderating effect of the bottom-up budgeting approach. Drawing from agency theory and the concept of organizational control, this study proposes a theoretical framework that examines how levers of control and information systems affect managerial performance, with the bottom-up budgeting approach moderating this relationship. Data for this study were collected via a survey administered to 473 employees from Indonesian banks registered with the Financial Services Authority. The survey instrument was distributed using a Google form. Path analysis using SmartPLS 3.0 was employed to analyze the data and test the proposed relationships. Results indicate a significant positive effect of both levers of control and information systems on managerial performance. The bottom-up budgeting approach moderated the relationship between these factors and managerial performance. This suggests that the bottom-up budgeting approach enhances the effectiveness of levers of control and information systems in improving managerial performance in the banking industry. The findings of this study have important implications for practitioners in the banking industry. Understanding the impact of levers of control and information systems on managerial performance, as well as the moderating role of the bottom-up budgeting approach, can help banks develop more effective managerial strategies. This research contributes to the existing literature by empirically examining the influence of control and information systems levers on managerial performance in the context of the banking industry while also considering the moderating effect of the bottom-up budgeting approach. The findings provide valuable insights for academia and practitioners seeking to enhance managerial performance in service-oriented organizations.