The State-owned Hotel Industry Budgetary Slack: Problems And Countermeasures

After experienced extraordinary scene of reform and opening-up, the China state-owned hotel industry has been in a loss condition in the 21st century. Regardless of the state-owned assets are up from the use of efficient management level or from the view of manage are far lower than the advanced international level, the situations need to improve urgently. We have found that in a comprehensive budget management mode of the state-owned hotel industry is facing budget failure or budget out of control, as well as budget-related performance indicators for the lack of scientific evaluation, and the incentive system does not maximize the effectiveness of management and so on. We must properly face the budgets slack problem which exist in the budget management process, and need to resolve them.In the modern business environment of rapid change, increasingly competitive industry today, if the state-owned hotel industry can't breakthrough the measure of operation and management and not fully grasp the foreign markets as well as the source of income, including labor costs and operating expenses , management fees and other costs, such as operating expenses and administrative expenses, the current situation of the state-owned hotel has been in loss or bankrupt. So the enterprise needs scientifically predicting income and cost, reasonably establishing encouragement and punishment measure. We cannot make the budgets slack out of control in budgets management.This paper from the perspective of agency theory to study the theory of budget slack effects of budget factors, it's mainly related to budgetary participation, information symmetry, seeking to circumvent over pay and avoid the uncertainty risk factors of the four theories.Through the study the author found that budget slack of state-owned hotel industry exists in the budget management process. There have five points to Mitigation the budget slack. First, the hotel enterprises should determine to lower the degree of participation in budgeting carefully and to strengthen information exchange and communication. Second, the state-owned hotel industry should improve its internal management system and increase efforts to ensure the budget work operate normally. Third, the state-owned hotel is necessary to actively introduce the budget for scientific evaluation and incentive system and establish a comprehensive performance evaluation index system. Fourth, in the budget implementation process, we must implement the "rigid budget principle." Fifth, state-owned hotel managers should change their perspective, and build up the concept of budget cooperation.