The effect of managers' enabling perceptions on costing system use, psychological empowerment, and task performance

This study investigates whether and how managers' enabling perceptions of their costing systems affect task performance. We propose that managers who perceive their costing system as more enabling will have higher levels of task performance, and that this relationship occurs through the intensity with which the costing system is used and the level of psychological empowerment experienced by the managers. To test these propositions, we conduct a survey of middle-level managers and analyze the responses using a PLS model. Our results generally support our propositions. Specifically, we find a positive relationship between managers' enabling perceptions and the intensity with which the costing system is used. The intensity of use is further associated with all four dimensions of psychological empowerment (meaning, competence, self-determination, and impact). Finally, the intensity of use also has an indirect impact on task performance via the competence dimension of psychological empowerment. The present study extends prior research on costing systems, and adds to our understanding of the role managers' perceptions play in improving costing system effectiveness.