Navigating competing goals: examining the paradox mindset’s influence on the relationship between participative budgeting and performance

Balancing competing goals is a significant challenge for many organizations, particularly those operating in hybrid contexts. Drawing on Goal-setting Theory and Paradox Theory, this study examines the role of paradox mindset in enhancing performance within participative budgeting environments. Specifically, we investigate the relationships among participation in goal setting, budget goal acceptance, and budgetary performance, and whether these relationships are moderated by paradox mindset. We conducted a cross-sectional survey of 77 budget holders in an Italian public hospital, where both financial and clinical responsibilities are delegated to medical doctors, and analyzed the data using partial least squares (PLS). Our findings reveal that budget goal acceptance partially mediates the relationship between budgetary participation and performance. Moreover, paradox mindset positively moderates both the link between budgetary participation and goal acceptance and the link between goal acceptance and budgetary performance. To our knowledge, this is the first study to offer cross-sectional evidence of paradoxical thinking in budget goal setting, thereby contributing novel insights to management accountingresearch and practice.