Group participative budgeting: The effect of information asymmetry on group work standards

Stuart Barrington Thomas, Florida International University


The complexity of many organizational tasks requires perspectives, expertise, and talents that are often not found in a single individual. Organizations have therefore been placing employees into groups, assigning them to tasks they would formally have undertaken individually. The use of these groups, known as workgroups, has become an important strategy for managing this increased complexity. Empirical research on participative budgeting however has been limited almost exclusively to individuals. This dissertation empirically examines the effect of the information that management and workgroups have about group members' performance capabilities, on the work standards that workgroups select during the participative budgeting process. A laboratory experiment was conducted in which two hundred and forty undergraduate business students were randomly assigned to three-member groups. The study provides empirical evidence which suggests that when management is unaware of group members' performance capabilities, workgroups select higher work standards and have higher performance levels than when management is aware of their performance capabilities.

Subject Area


Recommended Citation

Thomas, Stuart Barrington, "Group participative budgeting: The effect of information asymmetry on group work standards" (1998). ProQuest ETD Collection for FIU. AAI9913915.