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Integrating Ethical Dimensions into a Model of Budgetary Slack Creation
Patricia Casey Douglas and Benson Wier
Journal of Business Ethics
Vol. 28, No. 3 (Dec., 2000), pp. 267-277
Published by: Springer
Stable URL: http://www.jstor.org/stable/25074417
Page Count: 11
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In this study, we develop and test a structural equation model explaining the propensity of individuals acting within organizations to create budgetary slack. Previous organizational and behavioral views of budgetary slack fail to acknowledge the ethical components of the problem. We surveyed managers involved in the budget-setting process to investigate the effect of their ethical positions on budgetary slack creation behavior. The data marginally support the overall model, while path coefficients in the structural equations model confirm hypothesized relationships between participation and information asymmetry in the budgeting process, between information asymmetry with incentives to create slack and budgetary slack creation, and between measures of ethical position and slack creation. A discussion of the results and their implications is included.
Journal of Business Ethics © 2000 Springer