The Study Of The Impact That Budget Responsible Persons’ Reputation And Moral Cognition On The Limited Budgetary Slack

At present, the overall budget management has become an important means of management control. However, in the management control, budget outturn is linked up with budget responsible persons’ performance evaluation and rewards and punishment. So,out of self-interest psychological, budget responsible persons realize direct intervention to the budget goal through the participation mechanism of, which produce budget slack problem.To solve the problem of budgetary slack, Western scholars obtained many achievements in the study about the inner relationship between the relevant factors affect the budgetary slack and budget slack.However, the conclusions have not well explained Young (1985) and other issues identified through the Experimental Institute, under the slack-inducing pay scheme, Most subordinates tend to lower the budget is not the easiest and maximize return task. In the experiment, under slack-inducing pay scheme, the relaxation degree of he inferiors is below the maximum value, In the same level of the production capacity,they earn less. Under the slack-inducing pay scheme, relatively limited budget slack is worth of the probe,because it violates the basic agent hypothesis of the opportunistic self-interest. Budget responsible persons on the one hand report lower than its actual level of productive capacity, on the other hand greater than zero, what is the deeper reason behind such behavior? Accurately answer the question on the inhibition of the budgetary slack has a strong theoretical and practical significance.This study centers on the issue that "what factors influence the formation of the limited budgetary slack", considers "the relationship between reputation and moral cognition of budget responsible persons "as a bridge and tie, investigates and studys "budget responsible persons", explores the relationship of "environment-cognition-action" of budget responsible persons, probes the effect of reputation and moral cognition on the relationship from the angle of "limited budget slack" for the first time.This stdy bases on self performance theory, cognitive theory, moral decision theory and utilizes experimental methodology, field interview method, questionnaire method, combines reputation with moral cognition and deep analyzes their influence on budget slack,then structures the model about the influence of Moral cognition on budget slack based on moral decision.Research suggests that the main conclusions are as follows:(1) Budgetary slack can’t be produced without its operation environment. Budget management system and institutional arrangements will have an objective impact on the cognitive (moral cognition and reputation cognitive), which will make constraint budgetary slack behavior. Compared to Western companies, China’s enterprises tend to adopt a more centralized budget management, self-serving budgetary slack reflects in the demands of personal interest, but also reflects in the pursuit of sectoral interests of the unit, at the same time; Individual budget relaxation behavior derives more from organizational system, Budget technology and the defects of budget environment.(2) The research tested the influencing factors and mechanism of action of the generation of budget relaxation behavior through the structural equation model and verifyed the relaxation behavior of budget responsible persons is not an isolated process, which will be affected by individual characteristics and the organizational environment. The results show that organizational factor(budgetary emphasis) plays a decisive role in the generation of budgetary slack; budget responsible persons identify moral intensity of budget plight according to their personal ethics, and then affect the moral decision-making process, budget responsible persons’ ethical decision has inhibiting effect on budgetary slack.What’s more, budget responsible persons’ moral orientation influences the moral decision-making process of budget relaxation behavior through moral intensity and there are some differences in moral decision between idealist and relativist,so the moral decision model using moral orientation as a logical starting point can further reveal the differences in behaviour of the budget responsible persons.(3) Empirical studies have examined the effect of two potential governing factors reputation and moral cognition on self-interest budgetary slack. The experiment has controled the level of information asymmetry regarding production capacity between superiors and inferiors and has measured the inferiors’ reputation and moral cognition of budgetary slack,and then tested the effect of reputation and moral cognition on budgetary slack. At the same time, moral cognition of budget responsible persons is related to their reputation cognition,the result shows that reputation cognition is a kind of external and social regulation mechanism,however, moral cognition internal control mechanism. Reputation acting as a budget contract basic mechanism, relying on the accumulation of private performance capital can reduce the opportunism behaviors of managers effectively, reputation’s function relys on the drive of moral factors, so we can say that reputation is the external identification of morality and morality is the internal constraint of reputation.