International Journal of Management and Commerce Innovations ISSN 2348-7585 (Online) Vol. 7, Issue 2, pp: (1344-1352), Month: October 2019 - March 2020, Available at: www.researchpublish.com
The Effect of Budgetary Participation, Task Complexity, Budget Emphasis, Environmental Uncertainty and Information Asymmetry on Budgetary Slack A.A.Ayu Dika Praba Pradnyani1, I Ketut Sujana2 1,2
Udayana University
1,2
Faculty of Economics and Business, Bali, Indonesia
Abstract: The purpose of this study was to provide empirical evidence of the effect of budgetary participation, task complexity, budget emphasis, environmental uncertainty, and information asymmetry on budgetary slack. This research was conducted in a 5-star hotel in Badung Regency. The sample used was 100 managers. The sampling method used in this study is nonprobability sampling with purposive sampling technique. Data collection was carried out through a questionnaire. The data analysis technique used is multiple linear regression analysis. The results of this study indicated that budgetary participation, task complexity, budget emphasis, environmental uncertainty, and information asymmetry have a positive effect on budgetary slack. Keywords: Budget participation, task complexity, budget emphasis, environmental uncertainty, information asymmetry, budgetary slack.
I. INTRODUCTION A budget is one of the important components of future financial planning in achieving a company’s goal. The importance of a company’s budget is to know the capability of the company in implementing various tasks and activities. It is also important in manager control system by which helping the manager in allocating monetary resources limitation of the company in achieving company’s goal (Hasanah,2013). The budget can also be used as a tool to provide more effectiveness in achieving organization’s efficiency with limiting expenses of the company’s operational (Tagwireyi, 2012). In budgeting process, several human behaviors will emerge toward the budget arrangement. These behaviors can emerge not only as a positive behavior but also a negative one. The positive behavior is when a manager improves the performance due to the budget as a performance’s benchmark. While the negative behavior refers to when a manager creates a budgetary slack. A budgetary slack is a difference between an actual resource with some added resources in integrating tasks (Falikhatun, 2007). It also causes the budget made by the manager to be unable to reflect the actual need of an organization (Baerdemaeker & Bruggeman, 2015). The budgetary slack can occur in various companies including the hotel. Nowadays, the development of hotels has been increasing more and more, thus causing the competition amongst hotels in providing the best service increases more as well. The more competitive the field of hotel management business nowadays makes the businessmen demanded to be able implementing their tasks effectively and efficiently in order to winning the business competition occurring. In order to operating the company effectively and efficiently, the company management needs to apply reliable planning and controlling systems to performing business activities based on the decided regulations (Sujana, 2010). In the same manner as other companies, hotels also arrange the budgets needed to carry out planning the company’s profit including the revenue and other expenses in a period of time.
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