PMS, Perception Of Justice And The Reduction Of Budget Slack

Budget has an important weakness because of the information asymmetry. Superiors sometimes have no idea of the real capacity of their subordinates. However, budget participation can cure this situation. But sometimes budget participation can cause some unethical behaviours like budget slack. External control and self control can be use to deal with budget slack, and the difference between them can be clear. But there is a trend that the gap between them can be obscure.That is to say, the effect of external control should not be restricted in economic inducing,it can affect the behavior by calling up the self control. As a note, more and more researches prove Performance Measurement System(PMS)as an external control can have a effect on budget slack through calling up the mechanism of self control.Our conclusions are as follow:First, in the characteristics of PMS, feedback can call for justice perception; this justice perception can reduce budget; the justice perception play the mediating effect between PMS characteristics and budget slack.The contributions are as follow:First, traditional research focus on the influence of self effect on institution, but this research focus on the influence of institution on self factors; second, this research prove that the difference between self control and external control can be obscure.