The Effect of Contract Framing on Budgetary Slack and Performance

2013 ◽  
Author(s):  
Maia Farkas ◽  
Lee Kersting ◽  
Uday S. Murthy
Keyword(s):  
Budgetary Slack ◽  
Contract Framing ◽  
And Performance

A Theory of Participative Budgeting

2013 ◽  
Vol 89 (3) ◽  
pp. 1025-1050 ◽  
Author(s):  
Mirko S. Heinle ◽  
Nicholas Ross ◽  
Richard E. Saouma
Keyword(s):  
Information Asymmetry ◽  
Private Information ◽  
Agency Costs ◽  
Top Down ◽  
Maximal Level ◽  
Bottom Up ◽  
Budgetary Slack ◽  
Participative Budgeting ◽  
And Performance ◽  
Budgeting Process

ABSTRACT This paper complements the ongoing empirical discussion surrounding participative budgeting by comparing its economic merits relative to a top-down budgeting alternative. In both budgeting regimes, private information is communicated vertically between a principal and a manager. We show that top-down budgeting incurs fewer agency costs than bottom-up budgeting whenever the level of information asymmetry is relatively low. Although the choice between top-down and bottom-up budgeting ultimately determines who receives private information within the firm, we find that both the principal and manager's preferences over the allocation of private information remain qualitatively similar across the two budgeting paradigms. Specifically, while the principal always prefers either minimal or maximal private information, the manager prefers an interim or maximal level of private information regardless of who is privately informed. Last, we use our model to address empirical inconsistencies relating the firm's choice of budgeting process, the resulting budgetary slack, and performance.

A study of performance model development and good governance budgeting

2021 ◽  
Vol 63 (3) ◽  
pp. 301-319
Author(s):  
Haliah Haliah
Keyword(s):  
Information Asymmetry ◽  
Local Governments ◽  
Good Governance ◽  
Positive Relationships ◽  
Budgetary Slack ◽  
Content Type ◽  
And Performance ◽  
Relationship Of ◽  
The Relationship ◽  
Structural Coefficient

Purpose The purpose of this study is to empirically examine the influence of politics, culture and regulation on the budgetary slack and its impact on performance. Specifically, the purpose of this study is to analyze the influence of culture, politics and regulation on budgetary slack and performance in local government. Design/methodology/approach Studies to develop model pengangaran good (good governance budgeting). Using the survey method. The total sample is 300 respondents in seven local governments in West Sulawesi. Respondents from the executive and legislative participate in the preparation of budgets in local government. The research instrument in questionnaire is tested using GSCA. Findings The third structural coefficient of the relationship is positive, indicating all three positive relationships. That is, the higher political, cultural, regulatory, will result in the higher budgetary slack. Thus, if one wants to reduce the budgetary slack, then one needs to reduce the problems of politics, culture and regulations. Other results obtained (a) significant political, cultural and regulatory effect on performance either directly or indirectly through budgetary slack. The sixth structural coefficient of the relationship is positive, indicating all six positive relationships. That is, the higher political, cultural and regulatory variables will lead to higher performance either directly or indirectly through budgetary slack; (b) information asymmetry and budgetary slack significantly affect performance. The second structural coefficient correlation is positive, indicating both positive relationships. That is, the higher information asymmetry and budgetary slack will result in higher performance; (c) budgeting participation moderating influence budgetary slack variables that are false and strengthen moderation. That is, the higher the value of participation budgeting (M) affects increasing influence through budgetary slack (Y1) on the performance (Y2). Research limitations/implications The results showed that the political, cultural and regulatory variables significantly affect the budgetary slack. The structural coefficient of the relationship of these three variables had positive-marked, indicating that the relationship of all those three was positive. Thus, the higher political, cultural and regulatory variables will result in higher budgetary slack. Political, cultural and regulatory variables significantly affected the performance both directly and indirectly through budgetary slack. Structural coefficient of the relationship of those six had positive-marked, indicating that the relationship of all those six was positive. Thus, the higher political, cultural and regulatory variables will lead to higher performance both directly and indirectly through budgetary slack. Originality/value This paper conducts a research on mediation effect of budgetary slack in relationship between politics, culture and regulation toward performance; this research retests the research result from Fisher (2002) about information asymmetry and performance, Rubin (1993) about political, budgetary slack and performance, Scott (2000) about regulatory, budgetary slack and performance, Indriantoro (2000) about mediation of budgetary slack in relationship between politics, culture and regulation toward performance and Mardiasmo (2005) about budgetary slack and performance. No studies have examined this kind of relationship simultaneously. location of study (no previous research for this relationship): local governments in West Sulawesi.

Budget preparers’ perceptions and performance-based budgeting implementation

2019 ◽  
Vol 31 (1) ◽  
pp. 137-156 ◽  
Author(s):  
Farzaneh Jalali Aliabadi ◽  
Bita Mashayekhi ◽  
Graham Gal
Keyword(s):  
Design Methodology ◽  
Loose Coupling ◽  
Structured Interviews ◽  
Organizational Processes ◽  
Budgetary Slack ◽  
Content Type ◽  
And Performance ◽  
Practical Implications ◽  
Budgeting Process

PurposeThe purpose of this paper is to examine the reason for the failure of implementing performance-based budgeting (PBB) at Iranian public universities and research institutes (PURI). This examination focuses on the actors participating in the budget processes and their perceptions.Design/methodology/approachThe study uses grounded theory and employs deep semi-structured interviews of budget preparers at Iranian PURI.FindingsThe results indicate a loose coupling between perceived and regulated budgeting process. This leads to budgetary slack as a barrier for authentic information flow and indeed PBB implementation. In the analysis of the results, the authors suggest some ways to improve the current situation of the budgeting processes at Iranian PURI.Practical implicationsPublic organizations that desire to transform their budgeting system need to consider their actors’ perceptions regarding the budgeting process. By explicitly considering their perceptions the organization may be able to solve any loose coupling as a result of internal, external and behavioral conditions.Originality/valueThis research examines issues that arise in the transformation of organizational processes. The focus on budget processes is critical for organizations which receive most, if not all, of their operational funds from a central authority. This research highlights the role of budget actors’ perceptions in transforming the budgeting process. An important result of this analysis is documenting the existence of loose coupling in the current budgeting process at Iranian PURI. This loose coupling results in slack creation and restricts the implementation of a PBB system. Additionally, this loose coupling limits the flow of authentic information.

scholarly journals Pengaruh Kejelasan Sasaran Anggaran dan Budget Emphasis Terhadap Senjangan Anggaran pada OPD Kabupaten Badung

2019 ◽  
pp. 651
Author(s):  
Ni Putu Achintya Wibawa Putri ◽  
I G. A. M. Asri Dwija Putri
Keyword(s):  
Local Governments ◽  
Linear Regression Analysis ◽  
Sampling Technique ◽  
Multiple Linear Regression Analysis ◽  
Measuring Instruments ◽  
Budgetary Slack ◽  
Goal Clarity ◽  
Efficiency And Effectiveness ◽  
And Performance ◽  
Positive Effect

Local governments must account for the implementation of the Regional Revenue and Expenditure Budget (APBD), both in the form of financial statements and performance reports when viewed from financial measuring instruments in the form of budgets, there are still inaccuracies in determining inputs which ultimately do not indicate budget efficiency and effectiveness. The budget has a direct impact on a person's behavior which can lead to budgetary slack. This study aims to provide empirical evidence about the factors that influence budgetary slack in OPD of Badung Regency. This research was conducted at 28 OPD of Badung Regency. The number of samples was 110 respondents, which taken with purposive sampling technique. Based on the results of multiple linear regression analysis, it was found that budget goal clarity has no effect on budgetary slack and budget emphasis has a positive effect on budgetary slack. The results of this study provide information for the parties involved in preparing the budget when making decisions, determining policies in the future, while minimizing the

scholarly journals Behavioral Implications of Budget Preparation: A Review and Future Research Context

2019 ◽  
Vol 4 (1) ◽  
pp. 24-28
Author(s):  
Lutfa T Ferdous
Keyword(s):  
Performance Evaluation ◽  
Developing Economies ◽  
Negative Impact ◽  
Research Question ◽  
Future Research ◽  
Research Model ◽  
Budgetary Slack ◽  
New Directions ◽  
Research Questions ◽  
And Performance

This paper discusses the development of the behavioral implications of budget preparation and provides suggestions for future research on budgetary slack and its negative impact on budget preparation and performance evaluation and its influence on budget preparers and users. This paper extends future research by focusing on the proposed research question and research model including developed and developing economies. In doing so, this paper identifies research questions where evidence remains mixed and new directions in which there are research opportunities.

scholarly journals Budaya Organisasi Berorientasi Hasil dan Komitmen Organisasi Sebagai Pemoderasi Pengaruh Partisipasi Penganggaran Pada Senjangan Anggaran

2018 ◽  
pp. 2352
Author(s):  
Putu Indah Widyasari ◽  
Ni Made Dwi Ratnadi
Keyword(s):  
Organizational Culture ◽  
Organizational Commitment ◽  
Budgetary Slack ◽  
Corporate Strategies ◽  
Analysis Technique ◽  
Budgetary Participation ◽  
High Result ◽  
Operational Activities ◽  
And Performance ◽  
Head Of Department

A budget is used by management to communicate plans, allocate resources, and coordinate operational activities and corporate strategies. Employee participation in budgeting and performance assessment based on budgets can lead to dysfunctional behavior by performing the budgetary slack. This study aims to empirically test the capability of organizational culture of results oriented and organizational commitment to moderate the influence of budgetary participation on budgetary slack. The study was conducted at 3.4 and 5 star hotels located in Denpasar. Respondents are Head of Department who is involved in the process of preparing and implementing the budget, amounting to 84 respondent. The analysis technique used is regression analysis of moderation. The results show that organizational culture that is result oriented and organizational commitment moderate the influence of budgetary participation on budgetary slack. The higher budgeting participation causes less budgetary slack when there is a high result-oriented organizational culture and organizational commitment. Keywords: Organizational culture, commitment organizational, budgetary participation, budgetary slack

Sign in / Sign up

Export Citation Format

Share Document