Organizational and Budgetary Slack

Organizational and Budgetary Slack

Organizational and Budgetary Slack

Organizational and Budgetary Slack

Synopsis

Riahi-Belkaoui's research shows that U.S. firms, and possibly firms elsewhere, resort to the underutilization of their resources, a phenomenon known as organizational and budgetary slack. In this, the first exhaustive study of slack, the author identifies and explains the phenomenon and its causes, explicates the characteristics of organizations afflicted by it, and suggests ways to remedy it. In doing so, he also analyzes the role of the multidivisional structure and "the performance plan" in the creation of slack, and the distortion of information that accompanies it. A challenging study for organizational behavior theorists and for organization planners and top management in the private and public sectors.

Excerpt

Slack arises from the tendency of organizations and individuals to refrain from using all the resources available to them. It describes a tendency to not operate at peak efficiency. a differentiation is generally made between organizational slack and budgetary slack. Organizational slack refers to the unused resources that are either absorbed as extra expenses or unabsorbed as actual or recoverable liquidity. Budgetary slack arises in the budgeting process and involves the intentional distortion of input information that results from an understatement of budgeted sales and an overstatement of budgeted costs. Organizatonal slack and budgetary slack are organizational phenomena that need to be explicated, identified, controlled, and/or tolerated to allow for a better management of the resources of the firm. the main objective of the book is to explicate both organizational slack and budgetary slack (chapter 1), to explore the properties of organizational slack in the U.S. context (chapter 2), to examine the impact of multidivisional structure and diversification strategy on the creation of organizational slack (chapter 3), to consider the impact of performance plan adoption on the behavior of organizational slack (chapter 4), to determine the impact of self-esteem on budgetary slack (chapter 5), and to evaluate the impact of accountability and self-monitoring on budgetary slack (chapter 6).

The book should be of interest to a variety of readers, including researchers in the field of behavioral accounting and management accounting, management accountants and business executives involved in the management and control of both types of slack, and graduate and undergraduate students in accounting and management.

Many people helped in the development of this book. Jude Grant, Pat Steele, and Eric Valentine of Greenwood Press and Sarah Yu from the University of Illi nois . . .

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