A Study On Budget Slack Based On Involvement In Management, Superior Pressure, And Machiavellianism

From the date of the beginning of the1980s,budget management practice in our countryhas gone through in the past30years,playing a positive role in the control of the managementof all types of enterprises.budget slack problem is prominent in our enterprise,is similar withbudget management practices in the developed countries in the west.Because of thedifferences of the outside circumstance and the objective contingency factors(such asinvolvement in management),even the profit-driven,pressure,and behavioral andpsychological factors of controller.in setting and implementing the budget target often appearsthe case that don’t match the reality. Is budgetary slack beneficial or harmful? whether thecreation of budget slack is the measures to cope with the uncertainty of the internalenvironment, or is controllers’ self-serving behavior?According to the above,we hypothesized that:(1) The effect of social pressure on highMach controllers’engagement in the creation of budget slack will be more positive forcontrollers who are involved in management.(2) The effect of social pressure on low Machcontrollers’engagement in the creation of budget slack will be less positive for controllerswho are involved in management.This paper investigates business unit (BU)controllers’ inclination to engage in thecreation of budgetary slack. In particular, we explore whether controllers who are involved inBU decision making are more susceptible to social pressure to engage in slack creation thancontrollers who are not. We expect, and find, a crucial role of the controller’s personality.Results from an experiment among136management accountants suggest that the personalityconstruct Machiavellianism interacts with involvement to explain controllers’ responses tosocial pressure to create budgetary slack. Controllers scoring high on Machiavellianism aremore likely to give in to pressure by BU management to create budgetary slack when theyhave been involved in decision making. In contrast, controllers scoring low onMachiavellianism are less likely to give in to pressure to create slack when they have beeninvolved in decision making.