The effect of management control system on the relationship between budget participation and budget slack

The objective of this study is to examine the effect of budget participation on budget slack in Indonesian manufacturing firms. The study also investigates the moderating effect of the management control system on the relationship between budget participation and budget slack. Based on Simons’s four...

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Main Author:	Sangkala, Masnawaty
Format:	Thesis
Language:	eng eng
Published:	2015
Subjects:	HF5601-5689 Accounting
Online Access:	https://etd.uum.edu.my/6721/1/s91054_01.pdf https://etd.uum.edu.my/6721/2/s91054_02.pdf
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id	my-uum-etd.6721
record_format	uketd_dc
institution	Universiti Utara Malaysia
collection	UUM ETD
language	eng eng
advisor	Muhammad Jamil, Che Zuriana Kamardin, Hasnah
topic	HF5601-5689 Accounting
spellingShingle	HF5601-5689 Accounting Sangkala, Masnawaty The effect of management control system on the relationship between budget participation and budget slack
description	The objective of this study is to examine the effect of budget participation on budget slack in Indonesian manufacturing firms. The study also investigates the moderating effect of the management control system on the relationship between budget participation and budget slack. Based on Simons’s four levers of control, budget participation and management control system are considered have significant influenced on budget slack. This study used questionnaires to collect the data. Questionnaires were distributed to functional managers such as finance managers, production managers and marketing managers, which represents 34.22 percent of the response rate. Factor analysis, linear regression analysis and hierarchical multiple regression analysis are used to analyze the data.The finding of the study indicates that there is a negative relationship between budget participation and budget slack, which suggesting that participate in budgeting process can reduce budget slack. There is also a negative relationship between budget participation and each of the management control system elements (which are interactive control system, boundary control system, diagnostic control system and beliefs control system) on budget slack. The result also shows that the management control system either as a package or an element negatively moderates the relationship between budget participation and budget slack. The results suggest that management control systems are applicable in assisting firms to reduce the dysfunctional behavior among managers. The result also proposes that management control system constitutes a crucial factor that impact on the reduction of budget slack. The results of the study are also expected to have implications on the importance of managers in manufacturing sector to participate in the budgeting process and integrate it with management control system to reduce budget slack.
format	Thesis
qualification_name	Ph.D.
qualification_level	Doctorate
author	Sangkala, Masnawaty
author_facet	Sangkala, Masnawaty
author_sort	Sangkala, Masnawaty
title	The effect of management control system on the relationship between budget participation and budget slack
title_short	The effect of management control system on the relationship between budget participation and budget slack
title_full	The effect of management control system on the relationship between budget participation and budget slack
title_fullStr	The effect of management control system on the relationship between budget participation and budget slack
title_full_unstemmed	The effect of management control system on the relationship between budget participation and budget slack
title_sort	effect of management control system on the relationship between budget participation and budget slack
granting_institution	Universiti Utara Malaysia
granting_department	Tunku Puteri Intan Safinaz School of Accountancy (TISSA)
publishDate	2015
url	https://etd.uum.edu.my/6721/1/s91054_01.pdf https://etd.uum.edu.my/6721/2/s91054_02.pdf
_version_	1747828108940017664
spelling	my-uum-etd.67212021-04-05T01:15:20Z The effect of management control system on the relationship between budget participation and budget slack 2015 Sangkala, Masnawaty Muhammad Jamil, Che Zuriana Kamardin, Hasnah Tunku Puteri Intan Safinaz School of Accountancy (TISSA) Tunku Puteri Intan Safinaz School of Accountancy (TISSA) HF5601-5689 Accounting The objective of this study is to examine the effect of budget participation on budget slack in Indonesian manufacturing firms. The study also investigates the moderating effect of the management control system on the relationship between budget participation and budget slack. Based on Simons’s four levers of control, budget participation and management control system are considered have significant influenced on budget slack. This study used questionnaires to collect the data. Questionnaires were distributed to functional managers such as finance managers, production managers and marketing managers, which represents 34.22 percent of the response rate. Factor analysis, linear regression analysis and hierarchical multiple regression analysis are used to analyze the data.The finding of the study indicates that there is a negative relationship between budget participation and budget slack, which suggesting that participate in budgeting process can reduce budget slack. There is also a negative relationship between budget participation and each of the management control system elements (which are interactive control system, boundary control system, diagnostic control system and beliefs control system) on budget slack. The result also shows that the management control system either as a package or an element negatively moderates the relationship between budget participation and budget slack. The results suggest that management control systems are applicable in assisting firms to reduce the dysfunctional behavior among managers. The result also proposes that management control system constitutes a crucial factor that impact on the reduction of budget slack. The results of the study are also expected to have implications on the importance of managers in manufacturing sector to participate in the budgeting process and integrate it with management control system to reduce budget slack. 2015 Thesis https://etd.uum.edu.my/6721/ https://etd.uum.edu.my/6721/1/s91054_01.pdf text eng public https://etd.uum.edu.my/6721/2/s91054_02.pdf text eng public Ph.D. doctoral Universiti Utara Malaysia Abernethy, M. A., & Brownell, P. (1999). The role of budgets in organizations facing strategic change: an exploratory study. Accounting, organizations and society, 24(3), 189-204. Abernethy, M. A., & Lillis, A. M. (1995). 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