Budget goal clarity as a mediator in the relationship between budgeting practices and budgetary performance in healthcare

This paper draws on the Behavioral Management Accounting (BMA) literature and proposes a research model that examines how the cognitive effects of a specific budgeting practice—budgetary participation—influence budget goal clarity, which in turn affects budgetary performance. Furthermore, the model explores how the relationship between budgetary participation and performance is mediated by an underexplored individual-level variable: budget goal clarity. Budget goal clarity is recognized as particularly important in contexts where budget holders are not traditional managers but hybrid professionals—responsible for both clinical and financial outcomes—who often have limited familiarity with financial targets, a circumstance that could influence their attitudes, behaviors, and in turn, their performance. Design/approach - The study administered a cross-sectional survey to a sample of medical doctors working in a public hospital who were identified as budget holders. Findings - The findings reveal that: (i) budgetary participation has a direct effect on budget goal clarity; (ii) budget goal clarity subsequently impacts budgetary performance; and (iii) budget goal clarity mediates the relationship between budgetary participation and budgetary performance. Originality/value - This paper contributes to the existing BMA literature by offering a novel perspective on how, in hybrid settings, the positive cognitive effects of budgetary participation are realized through the clarification of budget goals, thereby directly and indirectly influencing budgetary performance.