Date
7-2019
Department
Graduate School of Business
Degree
Doctor of Business Administration (DBA)
Chair
Reshowrn Thomas
Keywords
Equity, Self-efficacy, Ethical Ideology, Budgetary Slack, Culture
Disciplines
Business
Recommended Citation
Robey, Shawn L., "Effect of Cultural Differences on Budgetary Slack" (2019). Doctoral Dissertations and Projects. 2147.
https://digitalcommons.liberty.edu/doctoral/2147
Abstract
Budgeting enables the firm to allocate resources among subunits (Braun & Tietz, 2018). Gallani, Krishman, Marinich, and Shields (2018) noted that providing employees an opportunity to misreport private information is a disadvantage of employee participation in the budgeting process. Research suggests that perceptions of unfairness can result in increased misreporting by subordinates (Fisher, Peffer, Sprinkle, & Williamson, 2015). Individuals value fairness and equity in resource allocation settings (Drake, Matuszewski, & Miller, 2014). Ethics Position Theory (EPT) suggests that people’s reactions in morally toned situations can be traced to variations in their intuitive, personal moral philosophies. According to Forsyth, O'Boyle, and McDaniel (2008), cross-cultural consensus is lost when the discussion turns to less clear-cut issues. The purpose of this quantitative study was to examine the effect cross-cultural differences in perceived horizontal equity, self-efficacy, and ethical ideology of individuals from America and Brazil has on the created levels of budgetary slack. American and Brazilian responses were 413 and 390, respectively. The resulting analysis indicated statistical significance between horizontal equity and the creation of budgetary slack. Although there was no statistically significant difference between high/low self-efficacy conditions and budgetary slack levels, there was a statistically significant difference between low/high years of experience and budgetary slack levels. The results of the study are relevant to budgetary procedures that may impact an individual’s perceptions of fairness in pay compared to colleagues or peers with the same responsibility. In addition, it appears employees with more years of professional experience could benefit from education on how creating slack in their budgetary decisions can negatively impact the company and themselves.
