The Research On Improvement Enterprise Budget Management From The Perspective Of Organization

From 1990's, many state-owned group enterprises in China have gradually implemented the Budget Control System. Because the characteristics of Bureaucracy in enterprise group, power structure did not fit in with information structure and benefit structure in enterprise organization. Thus, induces a problem which difficult to guarantee the budgetary control accuracy. In practice, turn up a difficult problem—Budgetary Slack. Budgetary Slack, the difference between subordinate's best budget estimate and submitted budget figure, has significant influence on the effectiveness and efficiency of the Budget Control System. Faced this problem, this article apply normative research study,Method of modeling,evolved and inference,Case analysis et al. This paper aims at exploring and practice in controlling budgetary slack in state-owned group enterprises.Firstly, from the perspective of organization theory and information asymmetry theory, found out rigidity of Bureaucracy become the obstacle of budgetary development. This paper gives its first conclusion: Bureaucracy organization will be continued existence, in varying degrees.Secondly, through analyzing the nature and function of budgetary slack, this paper gives its second conclusion: whether budgetary slack is beneficial or deleterious for Budget Control depends on whether a critical value is met. Controlling budgetary slack, therefore, is to optimize the level of budgetary slack, not to eradicate it.Thirdly, a dynamic adverse selection model is built to explicate the budgetary slack problem. In this model, the process of budgeting is divided into three phases: starting phase, communication phase and contracting phase. The essence of controlling budgetary slack is to eliminate the ex ante information asymmetry about subordinate's best budget estimate between superior and subordinate. Four factors—management control system, incentive scheme, and budget participation—help eliminate this kind of information asymmetry.Thus, this paper reaches its third conclusion: the overall budgetary control system is essential for controlling budgetary slack, though budgetary slack occurs in the budgeting process.Lastly, a field study is conducted to explore the practices in controlling budgetary slack in xi' an dong fang Group corporation. The focus lies in the effectiveness of the integrated accounting control system in controlling budgetary slack. The implication for the other state-owned group enterprise is explicated thereinafter.