This research examined the effects of budgeting instrumentality and participative budgeting on organizational effectiveness in firms. Prior study in participative budgeting suggest budgeting instrumentality and participative budgeting are potentially important explanatory variables to motivate manager achieving good performance. Data were collected from 70 managers of firms in Yogyakarta.
Results of this study indicated that budgeting instrumentality and had significant impact organizational effectiveness but participative budgeting did not have significant impact on organizational effectiveness.