The Effect of Superior’s Reputation and the Need for Achievement Character on Budgetary Slack: An Experimental Study
DOI:
https://doi.org/10.23887/jia.v7i1.43117Keywords:
budgetary slack, need for achievement, superior’s reputationAbstract
The purpose of this study is to examine the role of the superior's reputation and the character of subordinates referred to as need for achievement (NFA) toward budgetary slack. We employed experimental method with a factorial design of 2 (superior reputation) x 2 (need for achievement). Hypothesis testing was conducted using two-way ANOVA. By using as many as 78 accounting and management students as experimental participants, t he results prove that subordinates who have superiors with favorable reputations tend to create a lower slack than those who have superiors with unfavorable reputations. Meanwhile, if a subordinate has a high need for achievement character, then the subordinate will tend to create a higher budgetary slack. Further, this study shows that budgetary slack tends to be created by subordinates with high need for achievement characters can be lowered if they get a favorable superior than an unfavorable one.References
Abdullah, I., & Brink, A. G. (2017). The Influence of Horizontal Equity, Self-Efficacy, and Ethical Position on the Creation of Budgetary Slack. Journal of Theoretical Accounting Research, 12(2), 3–27.
Apriwandi, & Pratiwi, Y. M. (2019). The Influence of Social Pressure, Responsibility and Procedural Fairness towards the Creation of Budgetary Slack: An Experimental Research. Global Business & Management Research, 11(1), 9–21.
Arnold, M. C., & Schreiber, D. (2013). Audits, Reputation, and Repeated Interaction in a Capital Budgeting Setting. European Accounting Review, 22(1), 185–213. https://doi.org/10.1080/09638180.2011.631734
Aronson, E. (2001). Integrating Leadership Styles and Ethical Perspectives. Canadian Journal of Administrative Sciences, 18(4), 244–256. https://doi.org/10.1111/j.1936-4490.2001.tb00260.x
Ashton, R. H., & Kramer, S. S. (1980). Students As Surrogates in Behavioral Accounting Research: Some Evidence. Journal of Accounting Research, 18(1), 1–15. JSTOR. https://doi.org/10.2307/2490389
Baiman, S. (1990). Agency research in managerial accounting: A second look. Accounting, Organizations and Society, 15(4), 341–371. https://doi.org/10.1016/0361-3682(90)90023-N
Baiman, S., & Evans, J. H. (1983). Pre-Decision Information and Participative Management Control Systems. Journal of Accounting Research, 21(2), 371–395. JSTOR. https://doi.org/10.2307/2490780
Bateman, T. S., & Crant, J. M. (1993). The proactive component of organizational behavior: A measure and correlates. Journal of Organizational Behavior, 14(2), 103–118. https://doi.org/10.1002/job.4030140202
Brown, J. L., Evans, J. H., & Moser, D. V. (2009). Agency Theory and Participative Budgeting Experiments. Journal of Management Accounting Research, 21(1), 317–345. https://doi.org/10.2308/jmar.2009.21.1.317
Brownell, P., & Dunk, A. S. (1991). Task uncertainty and its interaction with budgetary participation and budget emphasis: Some methodological issues and empirical investigation. Accounting, Organizations and Society, 16(8), 693–703. https://doi.org/10.1016/0361-3682(91)90020-F
Chong, V. K., & Ferdiansah, I. (2011). The effect of trust-in-superior and truthfulness on budgetary slack: An experimental investigation. In M. J. Epstein & J. Y. Lee (Eds.), Advances in Management Accounting (pp. 55–73). Emerald Group Publishing Limited. https://doi.org/10.1108/S1474-7871(2011)0000019009
Chong, V. K., & Ferdiansah, I. (2012). An Experimental Investigation on the Effect of Feedback Control Policy and Need for Achievement on Subordinates’ Budgetary Slack Creation. Asia-Pacific Management Accounting Journal; Vol 7 No 1 (2012): Asia-Pacific Management Accounting Journal (APMAJ). http://arionline.uitm.edu.my/ojs/index.php/APMAJ/article/view/60
Chong, V. K., & Loy, C. Y. (2015). The Effect of a Leader’s Reputation on Budgetary Slack. In M. J. Epstein & J. Y. Lee (Eds.), Advances in Management Accounting (Vol. 25, pp. 49–102). Emerald Group Publishing Limited. https://doi.org/10.1108/S1474-787120150000025003
Chong, V. K., & Sudarso, D. (2016). The Effect of Organizational Ethical Climate and Peer Monitoring Control Systems on Budgetary Slack: An Experimental Study. Asia-Pacific Management Accounting Journal, 11(2), 41–64.
Choo, F., & Tan, K. (2006). A Commentary on Sample Design Issues in Behavioral Accounting Experiments. Accounting Research Journal, 19(2), 153–158. https://doi.org/10.1108/10309610680000685
Cohen, J. (1988). Statistical Power Analysis for the Behavioral Sciences. Erlbaum Associates, Inc.
Covaleski, M. A., Evans, J. H., Luft, J. L., & Shields, M. D. (2003). Budgeting Research: Three Theoretical Perspectives and Criteria for Selective Integration. Journal of Management Accounting Research, 15(1), 3–49. https://doi.org/10.2308/jmar.2003.15.1.3
Davidson, B. I., & Stevens, D. E. (2013). Can a Code of Ethics Improve Manager Behavior and Investor Confidence? An Experimental Study. The Accounting Review, 88(1), 51–74. https://doi.org/10.2308/accr-50272
Deci, E. L., & Ryan, R. M. (1985). The general causality orientations scale: Self-determination in personality. Journal of Research in Personality, 19(2), 109–134.
Douglas Clinton, B. (1999). Antecedents of budgetary participation: The effects of organizational, situational, and individual factors. Advances in Management Accounting, 8, 45–70.
Dunk, A. S., & Nouri, H. (1998). Antecedents of budgetary slack: A literature review and synthesis. Journal of Accounting Literature, 17, 72.
Elsbach, K. D., & Sutton, R. I. (1992). Acquiring organizational legitimacy through illegitimate actions: A marriage of institutional and impression management theories. Academy of Management Journal, 35(4), 699–738.
Fisher, J. G., Sprinkle, G. B., & Walker, L. L. (2007). Experimental budgeting research: Implications for practitioners. Journal of Corporate Accounting & Finance, 18(6), 67–75. https://doi.org/10.1002/jcaf.20342
Gago-Rodríguez, S., & Naranjo-Gil, D. (2016). Effects of trust and distrust on effort and budgetary slack: an experiment. Management Decision, 54(8), 1908–1928. https://doi.org/10.1108/MD-10-2015-0480
Grover, S. L. (2005). The truth, the whole truth, and nothing but the truth: The causes and management of workplace lying. Academy of Management Perspectives, 19(2), 148–157.
Gursoy, D., Maier, T. A., & Chi, C. G. (2008). Generational differences: An examination of work values and generational gaps in the hospitality workforce. International Journal of Hospitality Management, 27(3), 448–458.
Hair, J. F. (2019). Multivariate data analysis (Eighth edition). Cengage.
Hartmann, F. G. H. (2000). The appropriateness of RAPM: Toward the further development of theory. Accounting, Organizations and Society, 25(4–5), 451–482. https://doi.org/10.1016/S0361-3682(98)00036-1
Heller, F. A., & Yukl, G. (1969). Participation, managerial decision-making, and situational variables. Organizational Behavior and Human Performance, 4(3), 227–241. https://doi.org/10.1016/0030-5073(69)90007-5
Hofstede, G. (1984). Culture’s consequences: International differences in work-related values. Sage.
House, R. J., J. Hanges, P., Javidan, M., W. Dorfman, P., & Gupta, V. (2004). Culture, leadership, and organizations: The GLOBE study of 62 societies. Sage Publications.
Jogulu, U. D., & Wood, G. J. (2008). A cross‐cultural study into peer evaluations of women’s leadership effectiveness. Leadership & Organization Development Journal.
Jogulu, U., & Ferkins, L. (2012). Leadership and culture in Asia: The case of Malaysia. Asia Pacific Business Review, 18(4), 531–549. https://doi.org/10.1080/13602381.2012.690301
Kohlmeyer, J. M., & Hunton, J. E. (2004). BUDGETARY SLACK CREATION AND TASK PERFORMANCE: COMPARING INDIVIDUALS TO COLLECTIVE UNITS. In Advances in Accounting Behavioral Research (Vol. 7, pp. 97–122). Emerald (MCB UP). https://doi.org/10.1016/S1475-1488(04)07005-X
Kung Fan‐Hua, Huang Cheng‐Li, & Cheng Chia‐Ling. (2013). An examination of the relationships among budget emphasis, budget planning models and performance. Management Decision, 51(1), 120–140. https://doi.org/10.1108/00251741311291346
Latham, G. P., & Saari, L. M. (1979). Application of social-learning theory to training supervisors through behavioral modeling. Journal of Applied Psychology, 64(3), 239.
Lau, C. M., & Eggleton, I. R. C. (2000). The Interaction between Accounting Control Systems and Task Uncertainty affecting Budgetary Slack. Asian Review of Accounting, 8(1), 1–24. https://doi.org/10.1108/eb060718
Libby, T., & Lindsay, R. M. (2010). Beyond budgeting or budgeting reconsidered? A survey of North-American budgeting practice. Management Accounting Research, 21(1), 56–75. https://doi.org/10.1016/j.mar.2009.10.003
Maiga, A. S., & Jacobs, F. A. (2007). The Moderating Effect of Manager’s Ethical Judgment on the Relationship between Budget Participation and Budget Slack. Advances in Accounting, 23, 113–145. https://doi.org/10.1016/S0882-6110(07)23005-6
Naranjo‐Gil, D., & Hartmann, F. (2006). How Top Management Teams Use Management Accounting Systems to Implement Strategy. Journal of Management Accounting Research, 18(1), 21–53. https://doi.org/10.2308/jmar.2006.18.1.21
Narsa, N. P. D. R. H., & Supriyadi. (2019). The role of companies’ codes of ethics in mitigating managers’ escalation behavior in the frame of agency theory. Asia-Pacific Journal of Accounting & Economics, 26(1-2), 131-149. https://doi.org/10.1080/16081625.2019.1546563
Nouri, H., & Kyj, L. (2013). An Experimental Examination of the Combined Effects of Normative and Instrumental Commitments on Budgetary Slack Creation: Comparing Individuals versus Group Members. In M. J. Epstein & J. Y. Lee (Eds.), Advances in Management Accounting (Vol. 22, pp. 225–260). Emerald Group Publishing Limited. https://doi.org/10.1108/S1474-7871(2013)0000022014
Prayudi, M.A., & Dharmawan, N. A. S. (2018). Does the Level of Religiosity Determine Budgetary Slacks Behavior as the Result of Superrior’s Pressure?. Journal of Economics, Business, and Goventment Challenges, 1(2), 103-115.
Rankin, F. W., Schwartz, S. T., & Young, R. A. (2008). The Effect of Honesty and Superior Authority on Budget Proposals. The Accounting Review, 83(4), 1083–1099. https://doi.org/10.2308/accr.2008.83.4.1083
Riahi-Belkaoui, A. (2002). Behavioral management accounting. Greenwood Publishing Group.
Sahoo, F. M. (2019). Research Design. In R. N. Subudhi & S. Mishra (Eds.), Methodological Issues in Management Research: Advances, Challenges, and the Way Ahead (pp. 37–51). Emerald Publishing Limited. https://doi.org/10.1108/978-1-78973-973-220191004
Sekaran, U., & Bougie, R. (2016). Research Methods for Business: A Skill Building Approach. Wiley. https://books.google.co.id/books?id=Ko6bCgAAQBAJ
Shields, J. F., & Shields, M. D. (1998). Antecedents of participative budgeting. Accounting, Organizations and Society, 23(1), 49–76. https://doi.org/10.1016/S0361-3682(97)00014-7
Staley, A. B., & Magner, N. R. (2007). Budgetary fairness, supervisory trust, and the propensity to create budgetary slack: Testing a social exchange model in a government budgeting context. Advances in Accounting Behavioral Research, 10(1), 159–182.
Steers, R. M., & Spencer, D. G. (1977). The role of achievement motivation in job design. Journal of Applied Psychology, 62(4), 472.
Stevens, D. E. (2002). The Effects of Reputation and Ethics on Budgetary Slack. Journal of Management Accounting Research, 14(1), 153–171. https://doi.org/10.2308/jmar.2002.14.1.153
Subramaniam, N., McManus, L., & Mia, L. (2002). Enhancing hotel managers’ organisational commitment: An investigation of the impact of structure, need for achievement and participative budgeting. International Journal of Hospitality Management, 21(4), 303–320. https://doi.org/10.1016/S0278-4319(02)00010-5
Van Griethuijsen, R. A. L. F., van Eijck, M. W., Haste, H., den Brok, P. J., Skinner, N. C., Mansour, N., Savran Gencer, A., & BouJaoude, S. (2015). Global Patterns in Students’ Views of Science and Interest in Science. Research in Science Education, 45(4), 581–603. https://doi.org/10.1007/s11165-014-9438-6
Ward, E. A. (1993). Generalizability of Psychological Research from Undergraduates to Employed Adults. The Journal of Social Psychology, 133(4), 513–519. https://doi.org/10.1080/00224545.1993.9712176
Webb, R. A. (2002). The impact of reputation and variance investigations on the creation of budget slack. Accounting, Organizations and Society, 27(4–5), 361–378. https://doi.org/10.1016/S0361-3682(01)00034-4
Wiener, Y. (1982). Commitment in Organizations: A Normative View. The Academy of Management Review, 7(3), 418–428. JSTOR. https://doi.org/10.2307/257334
Wong-On-Wing, B., Guo, L., & Lui, G. (2010). Intrinsic and Extrinsic Motivation and Participation in Budgeting: Antecedents and Consequences. Behavioral Research in Accounting, 22(2), 22.
Downloads
Published
Issue
Section
License
JIA (Jurnal Ilmiah Akuntansi) is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License
Authors who publish with this journal agree to the following terms:
- Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution Attribution-NonCommercial-NoDerivatives 4.0 International License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this journal.
- Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgment of its initial publication in this journal.
- Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) before and during the submission process, as it can lead to productive exchanges and earlier and greater citation of published work (See The Effect of Open Access).
1.png)
