Creation Of Budgetary Slack Research Articles

Moderating Perspective of Organizational Culture: Leadership Style and Obedience Pressure on Budgetary Slack

This research examines the impact of leadership style and obedience pressure on budgetary slack, with organizational culture as a moderating variable. By employing a descriptive quantitative approach, the study investigates how these factors interact within organizations to influence the practice of intentional budgetary slack creation. A sample of 110 accounting students who have taken professional and business ethics courses was analyzed, providing significant insights into the dynamics between leadership, obedience pressure, and budgetary slack. Objective: This research aims to determine the extent to which leadership style and obedience pressure influence budgetary slack and how organizational culture moderates this relationship. It seeks to contribute to understanding budget management within companies, particularly the factors that encourage or mitigate the creation of budgetary slack. Theoretical Framework: This study is grounded in theories related to leadership styles, organizational culture, and budgetary practices. It examines the concept of budgetary slack within the framework of obedience pressure and leadership influence, highlighting the role of organizational culture as a potential moderating factor. Method: The research adopts a descriptive quantitative method, with a population comprising all accounting students who have completed professional and business ethics courses. A total of 110 students were sampled for the study. Data were collected and analyzed to assess the relationships between leadership style, obedience pressure, budgetary slack, and the moderating role of organizational culture. Results and Discussion: The findings indicate that obedience pressure and leadership style positively and significantly impact budgetary slack. Additionally, organizational culture was found to moderate the relationship between leadership style and budgetary slack. However, it does not moderate the impact of obedience pressure on budgetary slack. These results are discussed in the context of existing theoretical frameworks and previous studies. Research Implications: This study offers practical and theoretical implications for understanding and managing organisational budgetary slack. It highlights the importance of considering organizational culture and leadership style to control or leverage budgetary slack for organizational benefit. This research contributes to the literature by exploring the moderating role of organizational culture in the relationship between leadership style, obedience pressure, and budgetary slack. It provides new insights into how organizational dynamics influence budget management practices, offering valuable implications for both academic research and practical management. Originality/Value: This research contributes to the literature by exploring the moderating role of organizational culture in the relationship between leadership style, obedience pressure, and budgetary slack. It provides new insights into how organizational dynamics influence budget management practices, offering valuable implications for both academic research and practical management.

Peer pressure and self-statement mechanism to mitigate management behavior in budgetary slack: An experimental approach

This study evaluates the susceptibility of management (especially management accountants) in creating budgetary slack by violating company policies. Reducing the creation of budgetary slack was evaluated by the relationship of the effects of peer pressure and perceived self-statement mechanisms within the scope of each social ethical dimension. Experimental results with 133 management accountants show that social and ethical friction can reduce the creation of budgetary slack by emphasizing peer pressure and self-assessment mechanisms. All experimental subjects could not violate company policy and it was proven by decreasing budgetary slack when faced with conditions without peer pressure and without a self-assessment mechanism. This finding provides evidence that budgetary slack is created when management is fully involved in setting the company's budget without any control from colleagues or leaders. The importance of social ethics in budgeting is raised by collegiate decisions in the team and creates a self-assessment mechanism for managers. Thus, resistance to creating budgetary slack can be increased and managers are held accountable for making budgetary decisions.

Does Religiosity Matter? Experimental Research on Abusive Supervision in Budgetary Slack Creation

Abusive supervision behavior has long been a problem in the budgeting process. Its nature has been proven to damage individuals and significantly impact the corporate environment. Several studies related to Abusive supervision show evidence that individuals who experience abusive supervision tend to do Budgetary Slack. Meanwhile, religiosity, which is predicted as a personal value that can control individuals from committing acts outside the norm or harming the company, sometimes has little effect. Several studies have shown that high religiosity does not prevent individuals from taking despicable actions such as earnings management, Budgetary Slack, commitment escalation, and others. Is there anything wrong with religiosity as an individual's value? Does this occur due to variable measurement error (instrument) or method bias in sampling? Researchers tried to compare various instruments related to religiosity to obtain the most appropriate measurement, especially by photographing this phenomenon. We surveyed 83 participants using the experimental method with a 2x2 factorial design to understand how religious belief might buffer against the destructive effects of abusive supervision on budgetary slack. The results of this study are expected to be a reference (empirical evidence) related to the role of religiosity as a personal value in preventing destructive behavior of individuals, especially in the budgeting process.

HORIZONTAL EQUITY, SELF-EFFICACY, AND BUDGETARY SLACK: COMPARING AMERICAN AND BRAZILIAN CULTURES

This study analyzed the effect cross-cultural differences in perceived horizontal equity and self-efficacy have on the creation of budgetary slack. This research addressed the gap in the role of ethical ideology in business by empirically examining the influence of culture on an individual’s ethical ideology and their propensity to create budgetary slack. A total of 803 subjects included 413 individuals from America and 390 from Brazil. A series of analysis of variance testing identified statistical significance between horizontal equity and the creation of budgetary slack, as well as statistically significant differences between low/high years of experience and budgetary slack levels. Additional cross tabulations were included related to both horizontal equity as well as self-efficacy. The results highlight budgetary procedures that may impact a person’s perceptions of fairness in pay compared to colleagues or peers with similar positions in organizations. Findings suggest that employees with more years of professional experience could benefit from education on potential negative unintended consequences of creating slack in their budgetary decisions. Our findings may be used by managers to gain awareness of this significance and take necessary steps to create equitable pay policies and budgetary targets. Study results indicated no statistical difference in slack levels between Americans and Brazilians.

PENGARUH ASIMETRI INFORMASI DAN IKLIM KERJA ETIS TERHADAP BUDGETARY SLACK

Budgeting is one of the activities that must be carried out by the organization in order to achieve goals and performance effectiveness. The budget can act as a short-term planning and control tool for the company. However, in practice, managers can prepare a budget according to actual conditions and the best estimates that can be obtained honestly. This can happen when there is a conflict of interest and opportunistic behavior from managers in budgeting that can create budgetary slack. This research is an experimental study to examine and analyze the effect of information asymmetry and ethical work climate on the creation of budgetary slack. This study uses a 2x2 between subject research design with students of the Accounting Department at Widya Mandala Catholic University class 2017, 2018, and 2019 as research participants. The instrument given to the participants was a production task to translate letters into numbers. Testing the hypothesis in this study using the two-ways ANOVA tool. The results of this study indicate that information asymmetry has positive effect on budgetary slack, while the ethical work climate and the interaction between information asymmetry and ethical work climate do not have a significant effect on the creation of budgetary slack.

O efeito dos traços dark triad na relação entre a pressão de obediência e a folga orçamentária,

ABSTRACT The aim of this paper was to evaluate the effect of personality traits on the relationship between obedience pressure and the creation of budgetary slack. Concatenating the dark triad personality traits and obedience pressure in a decision-making scenario relating to the creation of budgetary slack enables us to widen the investigation of factors associated with the practicing of budgetary slack. The relevance of this study lies in understanding how personality traits influence decision making under hierarchical obedience pressure in relation to the creation of budgetary slack, enabling us to measure and detect possible biases in managers’ decision making due to these factors, thus being able to predict or mitigate decisions in the organizational environment. It was verified that the practice of creating budgetary slack can be carried out independently of a hierarchical order and that personality traits influence decision making with relation to the execution and planning of budgets. The article makes theoretical contributions to the accounting area, enabling the advancement and deepening of the discussion of social aspects (obedience theory) and behavioral aspects (personality traits) associated with decision making relating to the creation of budgetary slack. The approach is quantitative and experimental (2 x 2 factorial design), using 82 accounting sciences students. The data were analyzed using Mann-Whitney and Kruskal-Wallis tests and binary logistic regression. It was found that, independently of being under obedience pressure, individuals with high dark triad personality traits were more inclined toward the creation of budgetary slack, demonstrating that the intrinsic personality traits of each individual have an effect over decision making. However, regarding obedience pressure, it was verified that there was no significant effect on the creation of budgetary slack. These results offer contributions to organizations, as their managers and teams do not practice slack due to obedience pressure scenarios, but rather according to personality traits.

The Impact of Abusive Supervision and Locus of Control on Budgetary Slack

Previous research has shown that budgetary slack behavior is motivated by external factors based on employee preferences or internal factors. Abusive supervision and locus of control are two aspects that have the potential to be the cause of budgetary slack creation. This research aims to investigate the impact on the propensity of individuals (abusive supervision and locus of control) to execute budgetary slack. Furthermore, this research also explores the role of the individual locus of control through abusive oversight of the tendency to handle budgetary slack. Until now, no research has been conducted to investigate the role of the individual locus of control in reaction to abusive supervision that facilitates budgetary slack activity. This research used a 2 x 2 experimental method among 51 Accounting master students as participants to test the hypothesis. The findings show that the tendency to create budgetary slack is not significantly influenced by abusive supervision, whereas the locus of control has a major impact on the tendency to generate budgetary slack. Furthermore, it was also found that the propensity to create budgetary slack is influenced by interaction of abusive supervision and locus of control. In an attempt to reduce employee budget discrepancies, this analysis contributes empirically and theoretically by being the framework for consideration in the company.

Obedience Pressure vs. Peer Pressure: An Explanation of Muslims’ Religious Role in Budgetary Slack

Introduction/Main Objectives: The performance of individuals in organizations is generally evaluated based on their success at achieving targets. Furthermore, the role of the budget has a major effect on individual behavior in the preparation of the budget, by allowing unethical actions (budgetary slack). Background Problems: There are a few studies that measure the difference in the influence of social pressure between superiors and peers on individual’s behavior in the organizational budgeting process. On the other hand, there are inconsistencies in the results of the research into the role of religiosity in the creation of budgetary slack. Novelty: To explain why people are not influenced by social pressures to create budgetary slack, we use the Psychological Reactance Theory. We argue that religiosity is one factor that influences people in making decisions about participative budgeting. Religiosity is believed to be able to influence one's personal values, so it impacts on one's judgment and determination of whether a thing is good or bad. Research Methods: This study uses an experimental research method on 65 undergraduate accounting students and a 2x2 factorial design consisting of two factors, social pressure (obedience pressure and peer pressure) and religiosity (high and low). Finding/Results: The results show that religiosity is proven to play an important role in the budget decision-making process, futhermore it minimizes the occurrence of budgetary slack. Conclusion: Individuals who have high religiosity are proven to be better able to avoid creating budgetary slack compared to individuals who have low religiosity, when receiving pressure from superiors and peers. This result has implications for organizational stakeholders dealing with employee recruitment or in the organization's management control system, as religiosity is an important factor that must be prioritized.

BUDGET PARTICIPATION AND BUDGETARY SLACK: THE MEDIATING EFFECT OF AUTONOMOUS BUDGET MOTIVATION

The purpose of our research is to provide empirical evidence of what and how participation in budgeting relates to the creation of budgetary slack conducted by managers through autonomous budget motivation. This research is expected to contribute to research and practice in the field of management accounting. Hypothetical testing is done empirically by collecting data through questionnaire dissemination surveys in various companies located in East Java. Data testing is performed with the help of the SmartPLS 3.0 app. The results of the data analysis showed that increased participation in budget preparation by managers from various departments led to a decrease in the creation of budgetary slack by managers. Nevertheless, the data test results were unable to prove that autonomous budget motivation was able to act as a mediation variable in the relationship between budget participation and budgetary slack. The results of the study indicate that only by actively participating in the budget preparation process, can directly reduce the tendency of employees to create budgetary slack without waiting for the high motivation of autonomous budgets that employees have first. Keywords: Budget participation, Budgetary Slack, Autonomous Budget Motivation

The Relationship of Budget Emphasis on the Tendency to Create Budgetary Slack

This study aims to find empirical evidence to support the notion that there is a connection between the budget emphasis and the potential budgetary slack. In this study, there were 65 respondents (out of a potential pool of 872 employees of the regional water supplier for Malang city). Of the 65 questionnaires distributed, 57 were returned fully completed. The data collected was then analyzed using the Product Statistics and Services Solution (SPSS) application program. This study uses a simple linear regression analysis technique to measure the impact of the budget emphasis variable to budgetary slack. The results show that the budget emphasis produced a positive effect on the incidence of budgetary slack, however when the budget emphasis is too tight it can cause aberrant behavior in subordinates owing working pressures to achieve set targets. 
 Keywords: Budget Emphasis, Budgetary Slack

Truth Vs. Slack Inducing Paradox: How Does Compensation Scheme Mitigate Social Pressure on Budgetary Slack?

This research aims to examine the role of the compensation scheme in mitigating the negative impact of social pressure on the creation of budgetary slack. There are not clear phenomenon , h ow can compensation methods with pressure (penalty) actually be better able to reduce budgetary slack compared to compensation methods without penalty ? This research contributes by validating the role of truth inducing and slack inducing compensation scheme in order to mitigate the budgetary slack through the perspective of expectancy theory. Results from experimental study among 56 undergraduate accounting students showed that obedience pressure tends to encourage individuals to create budgetary slack compared to while they experience pressure from the peer s (H1). Another finding fr om this research is the tendency of individuals to create budgetary slack tends to be lower when they accept the slack inducing compensation mechanism than truth inducing (H2). These indicate that slack inducing compensation scheme is better used than truth inducing in mitigating the creation of budgetary slack. D ifferent level of risk faced by the individual, especially in the absence of fines or sanctions if the budget target is not reached , give different impact on individual . Our r esearch provides practical implication when individuals get stressed, compensation schemes are less effective in minimizing the effect of social pressure on the creation of budgetary slack.

The Tendency of Hotel Rooms Division Managers to Create Budgetary Slack

The Tendency of Hotel Rooms Division Managers to Create Budgetary Slack

Pengaruh Informasi Asimetris terhadap Penciptaan Senjangan Anggaran dengan Faktor-faktor Person-Situation Interactionist sebagai Variabel Pemoderasi (Studi pada Organisasi Perangkat Daerah Kabupaten Banyumas)

This research is an explanatory and correlational study using survey method on heads of division in Regional Organizations of Banyumas Regency. This research aims to find out the effect of asymmetric information on the creation of budgetary slack and the effect of ethical factors expressed by person-situation interactionist factors on that relationship. The research population are all Regional Organizations of Banyumas Regency. The sampling method used is judgment sampling and it obtains 25 regional organizations. There are 4 heads of divisions from each regional organization who become the respondents.Based on the research result and data analysis using moderated regression analysis, it concludes: Asymmetric information can increase the creation of budgetary slack; (2) Ethical ideology does not moderate the effect of asymmetric information on the creation of budgetary slack; (3) Machiavellian character does not moderate the effect of asymmetric information on the creation of budgetary slack; (4) Locus of control does not moderate the effect of asymmetric information on the creation of budgetary slack; (5) Moral intensity does not moderate the effect of asymmetric information on the creation of budgetary slack; and (6) Organizational ethical climate does not moderate the effect of asymmetric information on the creation of budgetary slack.

Influence of Information Asymmetry and Self-Efficacy on Budgetary Slack: An Experimental Study

Participation in the budgetary process does not only comes with a positive effect(s) but could also lead to negative behavior(s) of employees, one of which is the creation of budgetary slack. Previous studies said that information asymmetry is rated as one of the causes of the creation of budgetary slack. The purposes of this 3x2 factorial experimental study and between subject designs are to see the effect of information asymmetry on the budgetary slack and see whether information asymmetry and self-efficacy leads to the creation of budgetary slack. This study involved 65 undergraduate and postgraduate students from the accounting department of Economics and Business Faculty in Universitas Airlangga Sura­baya as participants. One way ANOVA and two- way ANOVA is used to test and analyze the proposed hypothesis. Results show that information asymmetry influences the creation of budgetary slack. However, production managers with high or low self-efficacy are still taking advantage of asymmetric information that happened to do budgetary slack.

Determinants of Budgetary Slack Creation: A Study in Malaysian Local Authorities

Local authorities are responsible in allocating the resources provided by Federal Government through budget allocation process. The effectiveness and efficiency of local authorities in utilising the resources is determined by the way they manage the public funds. It is important for the local authorities to have a high degree of accountability in order to gain public trust. Managerial behavioural issues such as budgetary slack could affect the effectiveness of the budgeting process. This study aims to examine the influence of budgetary practices, specifically budget participation, budget emphasis and budget control, on the budgetary slack creation in Malaysian Local Authorities. 200 questionnaires survey were randomly distributed in January 2017 to employees that involved in budget preparation from 99 local authorities located in Peninsular Malaysia, and 109 were responded (54.5%). Hypotheses for this study were analysed using simple linear regression. Results show that budget participation, budget emphasis and budget control influence budgetary slack creation among the Malaysian local authorities. This indicates that the propensity of the subordinates to create budgetary slack increases when subordinates have influenced and involved in the budget setting as well as the use of budget in evaluating performance. High involvement and control in budgeting process, provides opportunity to manipulate the budget. The findings in this study contribute to the public sector management accounting literature in the area of budget in Malaysian local authorities. This study could assist the local authorities to enhance their budgeting system and practices.

Budgetary Participation’s Antecedent of Information Asymmetry and its Outcomes

The purpose of this study is to investigate the antecedents and outcomes of budgetary participation. More specifically, the author proposed that a lack of information foster budgetary participation. A high degree of participation enables managers to have favourable attitudes toward budget attained, and in turn, leads to a low degree of their creation of budgetary slack. Questionnaire data obtained from 115 Vietnamese managers were used to test the proposed model. The results suggest that high asymmetric information fosters high participative budgeting. When participating more in the budgeting process, their attitude toward to budget attained is favourable, and in turn, leads to the decrease of budgetary slack creation. These findings contribute to the budgeting literature in three folds. First, this study takes into account the assumption of participative budgeting when accessing the positive effects of budgetary participation. Second, the results suggests that managers’ attitude toward budget attained mediates the relationship between budgetary participation and managers’ creation of budgetary slack. Third, by using the theory of planned behaviour, this study explains how and why managers participating in the budgeting process fosters the favourable attitude toward budget attained.

Determinants of Budgetary Slack Creation: A Study in Malaysian Local Authorities.

Local authorities are responsible in allocating the resources provided by Federal Government through budget allocation process. The effectiveness and efficiency of local authorities in utilising the resources is determined by the way they manage the public funds. It is important for the local authorities to have a high degree of accountability in order to gain public trust. Managerial behavioural issues such as budgetary slack could affect the effectiveness of the budgeting process. This study aims to examine the influence of budgetary practices, specifically budget participation, budget emphasis and budget control, on the budgetary slack creation in Malaysian Local Authorities. 200 questionnaires survey were randomly distributed in January 2017 to employees that involved in budget preparation from 99 local authorities located in Peninsular Malaysia, and 109 were responded (54.5%). Hypotheses for this study were analysed using simple linear regression. Results show that budget participation, budget emphasis and budget control influence budgetary slack creation among the Malaysian local authorities. This indicates that the propensity of the subordinates to create budgetary slack increases when subordinates have influenced and involved in the budget setting as well as the use of budget in evaluating performance. High involvement and control in budgeting process, provides opportunity to manipulate the budget. The findings in this study contribute to the public sector management accounting literature in the area of budget in Malaysian local authorities. This study could assist the local authorities to enhance their budgeting system and practices.

Does the Level of Religiosity Determine Budgetary Slacks Behavior as the Result of Superrior Pressure

This study aimed to investigate budgetary slack behavior due to obedience pressure to authority in governmental organization. This study also evaluates the role of religiosity in determining budgetary slack creation in such situation. The results of experiment with 64 undergraduate students as participants indicate that majority of participants obeyed the order of their immediate superior to create budgetary slack in violation of organization policy. This study also found that participants’ level of religiosity do have impact on their actual behavior to create budgetary slack. Participants with high level of religiosity are documented to create smaller amount of budgetary slack than those who have low level of religiosity when faced with obedience pressure from their superior.

Mediating effect of intrinsic motivation on the relationship between Islamic work ethic, job satisfaction, and organizational commitment in banking sector

PurposeIn line with the general purpose mentioned, this paper aims to determine the impact of the Islamic work ethic (IWE) on job satisfaction and organizational commitment among the employees of Bank Maskan by examining the mediating role of intrinsic motivation.Design/methodology/approachAnalysis of data obtained from 220 questionnaires related to research variables with AMOS software shows a positive and significant relationship between IWE and job satisfaction and organizational commitment with the mediating role of intrinsic motivation.FindingsThe findings revealed a direct effect of IWE on job satisfaction, but there was no direct significant relationship between this variable and organizational commitment. Also, intrinsic motivation plays a partial and completely mediatory role in the relationship between IWE and job satisfaction and between IWE and organizational commitment.Research limitations/implicationsThe impact of participation in strategic planning on managers’ creation of budgetary slack: The mediating role of autonomous motivation and affective organizational commitment.Originality/valueAs the nature of bank employees’ work is such that it confronts them with numerous ethical choices, the adherence to ethical standards, particularly IWE, can greatly affect their enthusiasm and, as a result, their satisfaction and organizational commitment.

A Study on Managers' Creation of Budgetary Slack in Emerging Economies: The Case of Vietnam

Although the budgeting literature well documents managers' creation of budgetary slack in developed economies, lack of attention has been paid to this behaviour in emerging economies. It is doubtful that some unique characteristics, only existing in emerging economies, cause this behaviour to be different than the budgeting literature predicts. Since there is no study examining managers' creation of budgetary slack in emerging economies, such as Vietnam, to get insight into whether or not these characteristics cause the differences, the aim of this study is to replicate prior budgeting studies by using Vietnamese samples. Particularly, we investigated the impact of budgetary participation, budget emphasis, information asymmetry, and the interactions between these variables on managers' creation of budgetary slack. Data obtained from the questionnaire sent to 99 Vietnamese managers shows that the last two variables and the interaction between them induce managers' creation of budgetary slack. However, the results also indicate that the first variable and the interaction between this variable and the other two variables respectively have no impact on managers' creation of budgetary slack. These results provide some insight into the creation of budgetary slack of Vietnamese managers for future studies to extend the line of research.