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GOAL CLARITY AS A MODERATING VARIABLE BETWEEN BUDGET PARTICIPATION AND MANAGERIAL PERFORMANCE

CHAPTER ONE

INTRODUCTION

1.1  BACKGROUND TO THE STUDY

Goal clarity can be defined as a clear objective. In essence it can be define as one’s ability to set and reach specific goals. The important part of this definition is the word specific. A very broad or general goal won’t help drive you to successes. If your objective is to increase profit, fine one has to increase the quality of service. A goal should be clear, concise and worth achieving in which a specific outcome is reach. Budget participation is an estimate of income and expedition within specific limits of a country. The act of participating in an estimate of income and expenditure within specific limits in an organization, the total amount of money for a given on a budget restricting one’s expenditure.

Managerial performance pertaining to a manager or management the act of performing in an organizational structure. Another way of looking at this in the view of managers are to set a clear objectives and also in their duty to participate in the estimate of income and expenditure within specific limits of the organization so as not to run into deficit. Obviously, this requires them to vary their actions in any event, if there is a central issue regarding managerial performance, it surety must be their efficacy of managerial action, that is, the extent to which managerial action does or doesn’t produce the require results. Central to this, is a view of the manager as interventionist, as someone who changes things so as to realize specified financial and operational results.

1.2   STATEMENT OF RESEARCH PROBLEM

Rigorous studies have been conducted in more developed countries to determine the relationship, if any among goal clarity, budget participation, and managerial performance, in order to ensure the growth and stability of the firm (Okafor, 2006). Some studies have also been conducted in Nigeria to determine relationship between goal clarity and managerial performance (Rainey 1991; Rainey and Steinbauer (9Q9, Behn 1991). Studies of effective leadership in public organizations have stressed leaders’ abilities to communicate clear organizational missions and goals (Riccuci 1996). Okafor (1998) studied capital budgeting methods, firm characteristics and firm performance.

Despites these, we are not aware of any study, in the context of Nigeria, combining the variables of goal clarity, budget participation and managerial performance. This gap in knowledge has led to a situation where organizations, with declining performance, grope in the dark in identifying the variables to change when attempting turnaround management. This is managing from the blind spot. Consequently, it is our conviction that there should be a research aimed at finding out the individual and combined effect of the variables on managerial performance. However, in this study we restricted ourselves to the much neglected variable or the human angle of organization of goal clarity, budget participation and managerial performance. Goal clarity was management policies and budget participation was the degree to which values are place and accepted by organizational members.

In the light of this, the research questions were

i    Does goal clarity lead to managerial performance?

ii   Does budget participation lead to managerial performance?

iii  Is goal clarity a moderating variable between budget participation and managerial performance?

iv   What is the relationship between goal clarity and budget participation?

v What is the relationship between managerial performance and budget participation?

1.3   RESEARCH OBJECTIVES

The main objectives of this study, therefore, was to examine the relationship of selecting goal clarity as a moderating variable between budget participation and managerial performance. In doing this, we relied on the models developed in Kanpass Australia (1996/1997) business directory by Milani’s (1975).

More specifically, the objectives of this study were to determine the relationship between:

If goal clarity leads to managerial performance.

If budget participation leads to managerial performance.

If goal clarity is a moderating variable between budget participation and managerial performance.

The relationship between goal clarity and budget participation.

The relationship between managerial performance and budget participation.

1.4    RESEARCH HYPOTHESIS

The research hypotheses relevant to the above stated question and objective were:

1. Ho: Goal clarity does not lead to managerial performance.

Ha: Goal clarity leads to managerial performance

1. Ho: Budget participation does not lead to managerial performance.

Ha: Budget participation leads to managerial performance.

iii. Ho: Goal clarity is not a moderating variable between budget participation and managerial performance.

Ha: Goal clarity is a moderating variable between budget participation and managerial performance.

1.5  SCOPE OF THE STUDY

The goal clarity as a moderating variable between budget participation and managerial performance was the units of analysis in this study. However, there are so many types of organization that intensely stands as benefiting factors to the economy in general. Considering the plethora of variables that affects corporate performance; however, as also stipulated earlier, the subject matter of this study was the relationship of the goal clarity, budget participation and managerial performance in the specialized areas, the modified norms and value. Synonymous with organizational performance.

Moreover, for the purpose of this study, the research population comprised on all the companies quoted on the 1sttier security of the Nigerian stock  exchange (NSE); A case study of Diamond Bank, Oand Plc etc. The aforementioned companies above were chosen because of the relative accessibility to information on them, for adequate coverage and representativeness, as at then, hundred companies were selected from six industrial sectors viz, Banking (Diamond Bank, Oceanic Bank, UBA); food/brewery and tobacco/Cadbury, PZ, NB, Guinness, industrial/domestic products/paints, kitchen utensils, electrical appliances, electronic gadgets) etc and insurance like Nicon, NDIC etc. this studies was therefore cross-sectional.

1.6   REVELANCE AND SIGNIFICANCE

Though some studies have been conducted, as identified in previous sections, there still exist some gaps in knowledge of the relationship among goal clarity, budget participation and managerial performance in the context of Nigerian economy. Previous studies in Nigeria have examined some of the variables in focus singly. This study adopted an integrated approach of the effect of all these variables on managerial performance. This study sought to close some of these gaps by establishing empirically, the relationship among these variables based on Nigeria experience and would hopefully and policy makers in how to identify clear objective, nurture and maintain positive characteristics and practices in an organization.

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