BUDGETARY PARTICIPATION ON ORGANIZATIONAL PERFORMANCE IMPROVEMENTS MEDIATED BY MENTAL MODELS AND CREATIVITY

Abstract

Budgetary participation provides local government officials with the opportunity to carryout the budget preparation process so that it will increase self-confidence, emotional control and ego involvement in the organization. This is seen as a learning process that will develop mental models as a mediating variable, which in turn triggers their creativity so that it can have a positive effect on improving organizational performance. This research aims to testand re-analyze the inconsistent results of previous research regarding budgetary participation which has an effect both directly and indirectly, namely through mediation with mental models and creativity, on improving organizational performance. This research was conductedat Kantor Sekretariat Daerah Provinsi Jawa Tengah using a sample of 91 regional government officials who were directly involved in budget preparation. Data analysis uses Partial Least Square via the SmartPLS application. The results of this research indicate that budgetary participation mediated by mental models and creativity has a positive effect onimproving organizational performance. Meanwhile, budgetary participation has no direct positiveeffect on organizational performance.