An Empirical Research On Budgetary Slack: Based On Transformational And Paternalistic Leadership

Budget is a very effective means of management control which came fromDuPont as early as1920s.It played a very important role, and widely spead. Now thebudget is still the most common means of management control. Budget continues toplay an active role in many companies management control. From the beginning ofthe1980s, budget have had30years of practice history in China. But there are oftensome criticisms for budget, and there are some problems in the application of thebudget, too.Budget slack is one of the main problems. Budget slack distorted thefuctions of the budget.,the people in the budget deliberately underestimate income andproduction capacity,overestimate the cost and consumption of resources. In westerndeveloped countries, budget slack has proven to be existed in budget managementpractice, and budget slack problem is also prominent in China’s enterprises.There have been a lot of research about the causes of budget slack. Such asinformation asymmetry, budget participation, budget emphasized,budget fairness andbudget features. This paper discuss budget slack from two new perspectives:paternalistic leadership style (authoritarian paternalistic leadership style) andtransformational leadership style (moral example, individualized consideration andvision stimulation), and discuss how these two leadership styles effect budget slackthrough budget fairness and trust? In this paper, questionnaire is the research method,mainly use path analysis to study the sample data.The questionnaire is distributed tothe MBA students of Xinjiang University of Finance and Economics, primary-leveland middle-level mangers in state-owned enterprises in Xin Jiang and InnerMongolia.These people have a certain representation.We use SPSS18.0andAMOS17.0analysis the sample data. The results show that the moral exampledimension is positively correlated with budget process fairness andtrust;Individualized consideration dimension is positively correlated with budgetinteractive fairness and trust; Vision stimulation dimension is positively correlatedwith budget interactional justice and trust; Authoritarian paternalistic leadershipdimension is negatively correlated with budget procedural fairness and trust; Budgetprocedural fairness and budget interactive fairness is positively correlated with trust,trust is negatively correlated with budget slack. In this study, the questionnaires issued region is narrow, the sample size is nottoo large, resulting, so there are some limitations in this paper. We can Future studytwo whole leadership styles, regardless of the dimensions of the leadership style. andwe also can research that matching leadership style and subordinate psychologicalcharaceristic, and classification of single-factor analysis of variance. We also raisedthe significance of this study for management practices at the end of this article.