Research On The Sales Budget Target Setting Of A Company Based On Ratchet Effect

As a symbol of modern enterprise management,budget management has been greatly developed in the academic and practical circles in china.Budget management as a tool for the planning and control of enterprises,the role played in the enterprise is beyond doubt.It is an important management means for enterprises to make use of the budget system to allocate the resources,coordinate and organize the activities and evaluate the performance of the employees.The budget management is a kind of systematic,strategic and humanistic as one of the modern management mode,with the change and development of modern management thought,theory and practice are more and more attention to the "people-oriented" management mode.In order to stimulate the enthusiasm of the staff,correct the attitude of the completion of the budget target,improve the level of performance,budget participation in the budget management more and more attention.In the process of enterprise budget management,there is a phenomenon of asymmetric information between companies.The junior staff in order to observe the true level of performance and the degree of effort,often based on lower performance as an important reference to the budget objectives.It will lead to the budget implementation period is hard,the corresponding budget target more overstating the phenomenon.This phenomenon,known as the ratchet effect.Because of the multi-agent relationship between the principal and the agent,the budget executor is not only to pursue the maximum profit of the single period,but also to pursue the maximum profit of the multi period.His enthusiasm will be reduced when budget executives predict that their efforts will improve performance standards.The effectiveness of budget goal setting may also be reduced,thus weakening the budget.Due to the negative impact of ratchet effect,more obvious.In this paper,behavioral science as a starting point,in order to explore the impact of the ratchet effect of a variety of factors,so as to improve the budget management problems.Based on the analysis of the relevant factors of the ratchet effect,this paper makes clear the connotation and theoretical basis of the ratchet effect.Based on the research of scholars at home and abroad,from the budget system participation,budget goal setting mechanism,monetary compensation contract,non monetary compensation contract,several internal competition,individual risk preferences and other factors that may influence the ratchet effect in enterprise budget management.According to these factors,the questionnaire was designed,and the questionnaireswere filled out by the budget related personnel of the case company,and the final 134 questionnaires were used as the research data.With the help of descriptive statistics,correlation analysis and multiple regression analysis,we find out the main influencing factors.Conclusion although each factor has showed correlation with the ratchet effect in the data,but the real factors which directly affect the ratchet effect is the budget goal setting mechanism,risk preference and internal competition of three factors.The emphasis on the historical data,the risk preference and the degree of competition in the enterprise are positively correlated with the ratchet effect.Finally,according to the research conclusion and the actual situation of A company budget management,the paper puts forward the corresponding improvement measures.Mainly in the process of budgeting,to optimize the budget goal setting process.In the process of budget implementation,strengthen the overall quality of staff training and integrity education,the establishment of smooth feedback channels,reduce the upper and lower levels of information barriers,to build a harmonious corporate culture.In the budget performance evaluation stage,to ensure fairness,establish proper performance evaluation and incentive mechanism.