Can Organizational Commitment, Locus of Control, and Ethical Considerations Moderate the Relationship Between Budget Participation and Budgetary Slack?

Abstract

Budgetary participation is one of the concepts that has been developed and is widely used by companies in budget preparation. Budget participation itself involves employees which aims to make employees more responsible and motivated to improve their performance so that company goals can be achieved. This research aims to examine the association among of budgetary participation towards budgetary slack with organizational commitment, locus of control, and ethics as moderation variables at AP Co. Indonesia. The selection of data sample used purposive sampling. The research used primary data that was collected by distributing questionnaires to the manager level employees at AP Co. Indonesia. The result of this research shows that budgetary participation has positive and significant effect on budgetary slack. Meanwhile the organizational commitment, locus of control and ethics do not moderate budgetary participation on budgetary slack. The implication of this research is that companies must be more selective in choosing officials who will later participate in budget preparation, namely those who have organizational commitment, locus of control, and high ethical considerations. Because by having organizational commitment, locus of control, and high ethical considerations, a person will feel able to complete work with optimal results, thereby reducing the occurrence of budgetary slack.