Budgetary Slack: Based on the theoretical definition of budget target

Abstract: The organizational context of the inconsistency, the objective existence within the organization, such as information asymmetry, budget participation, budget emphasis and other contingent factors, such as profit-driven and budget of the main, the degree of psychological stress and other behavioral attributes of the budget goal setting, implementation , modification and evaluation, given the budget target in the clarity of the different features. These features and budget slack causal link between the intrinsic. organization communication and reward system is to improve the characteristics of budget targets important areas.

Keywords:: budget targets, definition, budget slack, Researchers

I. Introduction

Budget (budget) is one of the few able to organize all the key issues in a system integrated into the management control methods, some Researchers is to corporate governance, corporate governance, internal control, evaluation and compensation, and all include them. but the budget slack (budgetary slack) play the role of budget constraints. budgetary slack is in the budget management process, due to the role of various objective factors, resulting in budget management to drive its participants overestimated the cost of selfish motives, underestimation of income Consequently, the actual data and the differences between budget data management behavior. Horngren even believe that relaxation is the budget control budget has not yet been solved a major problem.

From the actual situation, no matter what kind of budget model, the enterprises are facing the situation is different, there is no universal form of adaptation, but should be internal and external environmental factors in the analysis and implementation of the main acts on the basis of psychological characteristics, expand the contingent Research. In this paper, the perspective of contingency theory to budgetary participation and budget emphasis on the basis of such objective. from the impact of the budget on the relaxation theory is an important factor in a contingency budget of goal clarity to conduct investigations.


Second, the budget target management and contingency factors

(A) of the target substance of management theory
Lock and other found that external stimuli such as rewards, feedback and monitoring the pressure of work objectives are affected by individual motivation, that the goal is to direct human behavior (though not the only) regulator, and in 1968 Goal Setting Theory. Then Many scholars have made a further theoretical analysis and empirical Research. Goal Setting Theory has become the most influential organization of incentive theory, and in the economy, education, organization and management practice has been widely used.

Discusses the objectives of the first systems management (Management by objectives, acronym MBO) is the management guru Dlucker. In his view, the so-called management by objectives, but a program or process that enables the organization in consultation with superiors and subordinates, according to the organization's mission to determine overall goal of the organization during a given period, which determines the lower levels of responsibility and targets, and these goals as organizational and operational, evaluation and reward the contribution of each unit and individual standards.

The essence of objective management theory has made two people management, the second is involved (participation) and self-control.

Dlucker that man is responsible. As long as it properly, people will not only bear the responsibility, but also the pursuit of responsibility, willing to work to play to their wisdom and creativity. Target management by means of objective and work together to put managers and by managers to unify the management of self-control instead of using repressive management, promoting employees to complete the responsibilities conscientiously. one of the basic objectives of management philosophy is "basically good", which is based on the Y theory, dynamic person point of view, the assumption that human nature has a positive side.

Upper and lower target to participate in management of objective selection and how to achieve consensus. Any organization must become a truly collaborative body. Condensate synthesis of the individual efforts for the common effort. Every member of the organization's contribution are different, but we all must be for a common goal. Grochla said: "when an individual's values ​​and objectives throughout the organization into line with a greater degree when the person's willingness to work will improve." Odlorne will target management describes as a process through which an organization jointly determine the upper and lower management of the organization's common goals, based on the expected results of each individual to define their primary responsibility, and the use of these indicators to guide the activities and Evaluation of contribution.

Management process from the point of view, the limitations of management by objectives is mainly reflected in: Target is difficult to determine, short-term objectives, target a small number of target amendment is not flexible. The view from the basis of management by objectives, because people are rational, selfish , thus making the individual interests and collective interests is inconsistent, the individual always put their own interests before the interests of the collective. organizations are concerned about each of the main goals on their own, while ignoring the inter-organization collaboration breeds selfishness, temporary and immediate tendency to view. This overall goal of the organization will create an obstacle to achieve because the overall goal is not to target all sectors, the simple sum of individual goals, and sometimes even run counter to both. Kast has sharply pointed out, in a sense, expected "between individual and organizational goals to meet exactly the same and the best" is not realistic.


(B) Budget contingency factors of management by objectives
Literature Research budget more objective management, from the perspective of the many key aspects of budget management by objectives. However, target management and behavior management from the perspective of the characteristics of the study budget goals are few. Lttner such as notes, enterprises in the selection action plans and investment to assess the level of performance when target in which the budget assumes a very important role, however, a large number of behavioral accounting research the contrary, few studies have focused on goal setting in this area.

Contingency factors that affect the budget target of three, namely, organizational environment, budgetary participation and budget emphasis (budgetary emphasls).

For the budget target should be compatible with the organizational environment, the research results more. Wangbin Deng from the vertical angle of the corporate life cycle. Raised the budget targets for all stages of development and business combination. Tang Guliang such a comprehensive strategy for the budget-oriented base point , proposed to build diversity into the budget and strategic objectives more matching system to prepare a comprehensive budget and reporting structure lock in order to achieve budget management and strategic control the effective docking of the two systems. Feng Qiao root raised in the specific process of budget preparation and establishment of , is bound to the market and exchange rate movements and other environmental conditions, based on the premise, however, these preconditions have large fluctuations, leading to the budget target and the actual situation revealed there is a certain bias. Zhang and put forward in different times, different business goals set their focus should be different levels of diversity in management decisions of the enterprise budget for the multilevel nature of goal setting. Hsiu incense that should be operational by the level and the establishment of budget targets. Zhang Yan Wen put forward, strategic business planning for the budget provides a benchmark to determine the basic framework, internal resources and external environment is an objective benchmark for the budget constraints.

Budget in the budget execution unit is allowed to participate in the development of the unit's budget targets. Of course. Participation is the basic requirements of management by objectives, has positive significance. People are willing, through the design of organizational structure or control system to meet the organizational environment, this adaptation more Well, the higher the organizational performance, as if the budget targets are established under their own control, rather than externally imposed, then the budget is more likely to be accepted, which led to the individual, greater restraint to achieve their goals. But Nanjing University research group to transfer the samples of domestic enterprises, Charles found that targeting of the budget, 80.60% of companies are choosing superior dominant. shows that most companies in the development of China's budget targets have taken the centralized model, due to its lack of the implementation of those involved, to achieve budget targets are affected, is caused by a major source of information distortion.

Modern budget management are basically the budget target as a performance evaluation criteria, thus setting the budget targets, are very close attention to budget and performance evaluation of the budget associated with stress and as a basis for budget management by objectives. Budget targets should reflect the the will of the owner, and thus constitute the operator's daily financial constraints. in the budget goal setting and implementation process of the final focus is the enterprise value creation. Some researchers directly to the budget target of assessment and strategic link up the Balanced Scorecard that corporate strategy must proceed from a budget target. Zhang so that, in response to market changes, corporate development of the budget target should have some flexibility, in order to leave room for the budget work smoothly, reducing the budget is too rigid and give due Budget management of risk. Yao Yi, etc. to 400 enterprise groups, parent company of the national sample survey found that 78.7% of the surveyed sample budget targets the group is flexible in the implementation process and the actual situation of access to large, will be adjustment.


Third, the budget goal clarity and budget slack

(A) of the definition of the role of budget target
Clarity of objectives is a clear expression outcome goals, the degree of precise definition. The so-called budget target of clarity, refers to such an extent under the budget target in this level can be professional and clearly expressed, and can be responsible for implementation of the budget unit managers to understand. It expresses the budget target and horizontal coordination between different levels of communication and coordination between the units degree, but also within the organization objective factors reduce the asymmetric information variables.

From the perspective of goal setting theory, the budget goal clarity and role ambiguity and role conflict is the opposite category. Role ambiguity refers to the individual in the absence of clear job responsibilities, powers, goals, standards and so on. From the original sense, Kahn and so the role of ambiguity is defined as: A Study Based on information available to perform the role of differences with sufficient information, the direct function (function). Role ambiguity and role a person had to fulfill its close but lack sufficient information relevant. It has been described as "a lack of (dedoent) or indeterminate (uncertain) information," and originated in the environmental and personal source. In the past studies, role ambiguity was described as an important key driver , such as the management model of job satisfaction, self-efficiency and adaptability. and role conflict refers to the individual face in the work role and role expectations inconsistent.

Goal Setting Theory extensive research of a basic conclusion: the more specific goal setting, motivation of individuals with more positive impact. This is because people generally want to know the results of their own cognitive behavioral tendencies. The purpose and results of behavior behavior can reduce blindness to understand and improve the level of self-control behavior. specific to the budget management, the clear goal enables the implementation of the budget were more clearly how to do, how hard to achieve these goals, the budget targets set too clear, but also facilitate the organization's capacity to evaluate the implementation and performance levels. In addition, the clarity of objectives of the changes also have an impact on the performance to complete the implementation of the objectives are clear performance changed little. The fuzzy goal is generally not conducive to guide the implementation of those behavior and evaluate his performance. Meanwhile, those who accept the performance of fuzzy goals of the implementation of big changes, because the uncertainty of fuzzy goals prone to a variety of possible outcomes. Many empirical studies have shown that the above conclusion is universal. transfected affixed to the Research Papers Download http://www.hi138.com (b) of the budget target of relaxation of the budget resolution
Clarity and predictability for the effective realization of goals is necessary. When a person has the information to effectively achieve its objectives, clarity of goals will appear., Only when individuals, a clear understanding of the full information to determine budget goals, objectives clarity This condition will be achieved and the corresponding operations.

Lack of clarity of budget goals is a direct consequence resulting from the implementation of role ambiguity and role of those conflicts. Goals will improve the clarity of business performance, on the contrary, the lack of clarity could lead to staff confusion, tension and dissatisfaction. Hirst, etc., and Weingart have pointed out that the proposed task and the high interdependence between tasks, which would have led the managers of the budget target increase uncertainty, and then produce a lack of clarity. And these are not clear goals will reduce the results of operations. Gerard's research indicates that organizations objectives, standards are not clear, will lead to disband and become dissatisfied with their roles, underestimate their efficiency. we can not become clear understanding of budget targets do not have the operational objectives. in the behavior of the process, when a test way be construed as specific targets or guidelines, such guidelines will be referred to as operational, and whether the person is not operational. do not have the operational budget target, the result will naturally lead to role ambiguity and role conflict. For example, Ross to have found work in this uncertain environment, managers have a high work pressure. those who have a clear goal of non-managers, will face closely related with the target completion of high uncertainty, budget in order to cause relaxation of the budget.

Schwab and other study found that role conflict and role ambiguity of these two variables can explain much of job burnout. And a sense of personal invalid, the role ambiguity of the more significant. Lee and other empirical study found that role conflict and role ambiguity and job burnout were significantly related. The study also found that in depressed environment, the clarity of goals and the path is to build not up, there will be a world-weary and outliers of the trend has emerged. the empirical evidence, Yao Yi were also found. "subsidiary to the satisfaction of the budget target," the efficiency and control systems are positively related to completion of the better budget target group, the higher degree of recognition on the budget subsidiary of the group. the efficiency of the higher scores. Shields other studies also confirmed that when the task set vague, the executor of the work pressure increased, thus increasing the uncertainty of results of the work will result in reduction of the lower level of effort.

Therefore, in this environment, managers will seek to protect some of their methods of risk reduction, and these methods often lead to functional failures. If not handled properly personal goals and budget targets, the relationship between the pressure on them, strong that implementation of the budget will inevitably lead to a breach of the act to achieve budget targets. In order to get rid of or alleviate the pressure on the budget implementation and the resultant negative impact on those who, managers often choose to relax the budget, which is not surprising .


Fourth, communication and reward systems based on budget targets to improve the clarity of the

(A) of the communication system to improve the clarity of budget goals
Supervisors often involved in setting and implementing the budget as a subordinate to create a harmonious atmosphere. They will work for a common goal, to accept a reasonable deviation. In an environment of mutual support and high. Subordinates will complete high performance. On the contrary , bad relations between the upper and lower levels will result in enhancing performance evaluation and job anxiety. Kathuria so that, when the manufacturing division manager in a supportive, team oriented work environment and a higher sense of identity, its performance compared good.

In business organizations, who are on the lower level budget execution, mixed units composed of horizontal collaboration among the coordinates. The exchange of information between them, emotional communication channels, methods and systems combined to form the communication system (communication system). Specifically, the budget management system is composed of communication between colleagues, managers influence the interpretation of differences between the budget, budget feedback and reporting relationships formed. As between the principal and agent there is asymmetric information, lead commission is very difficult to effectively observe the actual input and output agents. so we can see that the elements of the communication system, both internal information asymmetry in determining the key factors. on the positive treatment of these elements, can effectively reduce the degree of information asymmetry in order to improve the clarity of the budget target, a reasonable set a budget goal difficulty, and then reduce the level of the Organization's budget slack.

Nouri found a good colleague relations will reduce the likelihood of budget slack. In addition, managers and colleagues will compare the completion of its budget, and this comparison group of organizations can help managers to increase productivity. The poor relationship will in turn reduce the colleagues organizational productivity. Hirst suggested that relations between colleagues, poor budget management will lead to higher task uncertainty and tension atmosphere.

The process is essentially involved in the process of information exchange. In decision making, supervisor, or to encourage subordinates to mobilize higher levels of participation. So subordinates have more sense of involvement and satisfaction. Supervisor can use a variety of ways to increase the influence of subordinates . For example, subordinates can participate in budgeting processes. Fisher so that, under the influence of a high, they will reduce their budget slack, and there will be a better management performance.

When the boss can accept the adverse difference in the budget under a reasonable interpretation, the subordinate's performance will be better. But Bruns, etc. found in the budget and the need to explain the difference between the authorities concerned, there is no significant relationship. They found that the budget difference between the interpretation and tendency of the budget slack is negatively related.

As a necessary means of communication. Budget feedback is very important. If asked managers to explain the differences on the budget and responsibility for the formulation of objectives in the budget process, they will be less inclined to relax the budget target established. When members do not know the results of their efforts, they lose their success or failure of the vane, there is no inherent requirement to improve performance. In between the upper and lower levels should carry out regular and open discussion to So that people of any explanation of the budget gains a difference. Although Henderson and Kenis mentioned when the budget management performance in enhancing the importance of feedback, but they do not affect other management information to explain the mysteries of behavior. Supervisors often ordered subordinates to budget goals, but do not want them to know the hidden some reasonable decisions will be lost under the direction, leading to the occurrence of uncertainties. they can only relax by creating a budget to solve the problem, to cover up with loose change in the situation. Results waste arises. Cheng Ming also made in the budget emphasis is high in the enterprise, the completion of the budget was to evaluate the performance of managers the importance of standards. so. Differences in the results of such control in such enterprises from the budget-making central role, they are also more investigation is necessary for effective policy differences.


(B) of the reward system to improve the clarity of budget goals
Managers involved in setting the budget should be adequate remuneration (intrinsic and extrinsic rewards), so that incentives play a role. In addition, when the budget targets set in the difficult level, management should be given fair compensation manager . However, as noted earlier, the more difficult budget target is always accompanied by pressure increase, the increase in the pressure relief means that the channel must be found. So from the perspective of agency theory, the appropriate incentive and reward system should be in the implementation of the budget difficulties, in order to ensure the realization of their common and reasonable remuneration, time or horizontal collaboration with the upper and lower units to communicate, reduce the information asymmetry level objective to improve the clarity of the budget target to reduce budget slack .

Todd through field research methods, a comparative study of a company strategy and structure with the same two departments of the different management control mode, that the organization and clarity of individual goals, the relationship between performance and pay oriented, employee self-control of the establishment of an effective management control system, an important factor.

Demski, etc. From the perspective of information economics rationality of the existence of budgetary control. Due to information asymmetry, resulting in a style and adverse selection and moral issues, one of the ways to solve this problem is budget-based contracts. They used mathematical logic analysis this problem, the following conclusions: the basis of the contract budget, the budget target difficulty is not a direct question, the key is different from the budget target for the incentive to have different standards, budgetary participation is more important, the terms of the two sides agreed that the differences on the budget survey supervisor may sometimes have negative effects, the principle of absolute compliance can be controlled is not appropriate.

The researchers also found to participate in setting budget targets for the incentive will increase the performance quality, the acceptability of goals, obligations, commitments and job satisfaction.

Yan for five such that if too much emphasis on the budget as the operating results of the evaluation criteria to motivate staff, then hold the staff expertise and information may no longer be fair and objective prediction of future events and disclosures, they will tend to Report conservative, seems to make better operating results in future budget data, budget slack ‰, some people conclude that in the budget, "people can not do more lying, and the corresponding reward will be more. "whole system will not have the necessary motivation to pay attention to the budget accurate information, the budget process at all levels of the important information is hidden, distorted.


Fifth, research summary

In this paper, based on the literature review in order to target management theory and its ideological point of view of the evolution of the budget goal clarity and relaxation of the budget. Study found inconsistencies in the organization's external environment and organization such as the existence of objective information asymmetry, budget participation, budget emphasis and other contingent factors, coupled with the main budget, such as profit-driven and pressure behavior and psychological attributes, in the budget goal setting, implementation, modification and evaluation, given the clarity of the budget target characteristics of the differentiated features. These features and the budget exists between the intrinsic relaxation of the causal link. and made communication within the organization and reward system is to improve the clarity of the important areas of budget targets. study and control of budget targets and the difficulty is to recognize objective basis for the budget slack governance, but also the depth of theoretical research to improve budget control, budget management to enhance the level of an important way. From this sense, research in this area, is a theoretical and practical significance. but. As pointed out by Dunk, etc. consider contingent on factors such as budget participation in the complexity of the budget slack, the need for further research more to make us understand the importance of management accounting phenomenon.

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