Stretch targets in participative budget...

Lindquist’s (1995) seminal research in management accounting finds a low level of process control (voice), has a stronger positive impact on satisfaction with stretch budgets and task satisfaction than does a high level of control (vote).  To measure these effects, he uses a manual-based experimental task (i.e, building toy castles from Loc-Blocs©).  Subsequent experimental research, extending his findings, however, has employed a mental-based experimental task (i.e., Chow’s (1983) decoding task).  We question the efficacy of using a mental-based task to represent a manufacturing setting and suggest manual tasks better reflect manufacturing environments.

In this research project, we replicated Lindquist's (1995) experimental study by using a new, manual-based task that represents a manufacturing environment, to use in experimental research in management accounting; namely, paper quilt-making.  We propose that by replicating Lindquist (1995) and achieving his same basic findings, we show this new task is an effective alternative to his castle-building task.  Additionally, we support that the justice tenets of his seminal work are as true today, as they were twenty-five years ago.

We find, as did Lindquist (1995), that subjects allowed a voice only are significantly more satisfied with stretch targets received and the experimental task itself.  Additionally, we also find that subjects with a voice outperform those with a vote where Lindquist (1995) was unable to find significant performance effects.  Our results suggest the paper quilt-making task is an effective alternative experimental task to use when replicating a real-world manufacturing environment.