An Experimental Research About The Influence Of Corporate Pay Schemes And Ways Of Resource Allocation On Budgetary Slack

In the traditional budget management model, due to subordinate self-interest mental, the phenomenon of budgetary slack is ubiquity. Budgetary slack is the dysfunction of management control. And its existence not only can breed subordinates’dishonest habit and the unobjectiveness of performance evaluation, but also can lead to the distortion of enterprise resource allocation and the uselessness of budget management system. Facing the existence of budgetary slack in the traditional budget management system, managers and theory researchers have already reached agreement to reform budget system. There were two kinds of different views about the reform of the budget system, one is Beyond Budgeting and the other is Better Budgeting. But most our enterprises just construct a enterprise internal management control framework by means of comprehensive budget, and the authority of comprehensive budget as enterprise internal constitution is being increasingly understood, accredited and accepted. And comprehensive budget is converted from external rules to internal routine and even to convention. At this time, if we advocate Beyond Budgeting, it is undoubtedly unseasonable and high-cost. So improving existing budget system and making budget to be the important internal guarantee mechanism of achieving organizational objectives through optimizing resource allocation and effective budgetary control means is a realistic thinking of our enterprises to carry out budget management.In the guidance of the view of Better Budgeting, domestic and foreign scholars seek to find countermeasures to inhibit budgetary slack from perspectives of incentive mechanism and budgetary control mechanism. But they separate the planning function of budget and budgetary control mechanism in their researches, so that the role of budgetary control mechanism as a behavior driver is restricted. Therefore, based on the thinking of coordinating the planning function of budget and budgetary control mechanism, this paper introduces the adjusted way of resource allocation.Through introducing the adjusted way of resource allocation, this paper seeks to find the approach to improve the traditional budget management system, and to explore how to exert the behavior-driving of budget control. The adjusted way of resource allocation is that the budget goals reported by subordinates are adjusted basing on the degree of budgetary slack of the prophase, and then allocate resource according to the adjusted budget goals. Based on the incentive theory and the resource allocation theory, this paper adopts experimental method to study the separate and interactive influence of pay schemes and ways of resource allocation on budgetary slack. In the experimental process, this paper designs four different experimental scenes according to different pay schemes and different ways of resource allocation. This paper tests the hypothesis through comparing the budgetary slack in different scenes and through two-factor analysis of variance, and then draw the following conclusions:(1) truth-inducing pay scheme can better inhibit budgetary slack than slack-inducing pay scheme.(2) the adjusted way of resource allocation can better inhibit budgetary slack than the unadjusted way of resource allocation.(3) slack-inducing pay scheme combined with the adjusted way of resource allocation can also inhibit budgetary slack just as truth-inducing pay scheme.