If managers feel safe, budget control becomes enabling. Evidence from a large local government organization in Sweden

Purpose – The authors study how enabling perceptions (flexibility, reparability and internal and globaltransparency) of a budgetary control system are formed, and whether enabling perceptions empower lowerlevel managers and make them form less negative attitudes about red tape in the organization. This study is warranted because of the lack of knowledge on how perceptual variation in flexibility, repairabilityand transparency of a control system within an organization, where managers experiencing the same controlsystem design, can be explained. Design/methodology/approach – Survey data with answers from 211 managers from a large localgovernment organization in Sweden is analyzed with structural equation modeling. Findings – The extent to which the budget system is perceived as having enabling qualities (being flexible,reparable and transparent) is explained by the safeness of the individual manager’s psychological climate. Thisclimate is characterized by trust and fairness perceptions in upper management. In turn, enabling perceptionspositively affect a sense of psychological empowerment and reduces attitudes toward red tape in theorganization. Originality/value – The authors contribute by identifying an important factor explaining individual-levelvariability in enabling perceptions of control systems within organizations. Compared to previous researchthat has taken an interest in the organizational-level climate, the authors theorize about and investigate (partsof) the individual-level psychological climate as an explanation of within-system variability