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By Gerald Vinten

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2 Data collection The objectives of this study are twofold. First, we identify those factors that determine corporate performance, and second, we attempt to establish whether ISO 9000 registration impacts company performance. To achieve these objectives, a sample of Malaysian companies together with other related data were gathered from Kuala Lumpur Stock Exchange (KLSE) and the Registrar of Companies database. Two samples were extracted from the database; one sample comprised 81 ISO 9000 certified companies, and the second sample 81 non-certified companies.

In addition, top management should give reasonable rewards to managers when the budget has a certain level of difficulty (Mia, 1989). High job commitment and involvement will also decrease the managerial desire to create budgetary slack (Nouri, 1994; Nouri and Parker, 1998). Brownell and McInnes (1986) classified the rewards system into intrinsic and extrinsic, and found that managers perform better when they receive sufficient rewards of both types. They also found that appropriate reward systems lower managerial propensity to create budgetary slack.

The communication and reward systems are affected by influencing power of managers, required explanation of budget variance, budgetary feedback, peer relations, and relationship between superiors and subordinates. Using a sample of 108 hotel managers in Macau, the findings indicate that the clear communication and reward systems can result in goal clarity and can help to solve budgeting problems under difficult goal situations. The implications of these findings are discussed in relation to the design of budgeting systems.

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