The Impact of Abusive Supervision and Locus of Control on Budgetary Slack

Abstract

Abusive supervision has many adverse effects on subordinates' attitudes and behavior. Evidence showed that abusive supervision could reduce subordinates' commitment to the organization, which leads to workplace deviant behavior. The higher the abusive supervision is, the higher the cheating behavior frequency by subordinates. On the other hand, the achievable of the budget become a mandatory thing for the employee because employee performance is reviewed by the success of meet or exceed the set budget targets. To make budgeting easier to achieve, the employee usually creates budgetary slack. So, Abusive supervision can directly increase the occurrence of budgetary slack. However, our research tries to reduce budgetary slack caused by abusive supervision by considering the locus of control owned by an individual. An individual with a higher locus of control can control himself from harming the company, like budgetary slack. Using experimental research on 51 accounting master students, we found that locus of control significantly impacts generating budgetary slack. Furthermore, our research found that the propensity to create budgetary slack is also influenced by the interaction of abusive supervision and locus of control. We hope this result can be a consideration in the budgeting process for company stakeholders in the future.

The effect of gender and code of ethics on budgetary slack ethical judgment: experimental evidence from Indonesia

“…, 2020). Among recent studies of budgetary slack in Indonesia are Donna and Ningsih (2020), Mareta et al. (2021) and Wafiroh et al.…”

“…, 2011); Nigeria (Ajibolade and Akinniyi, 2013); Turkey (Yilmaz et al. , 2014); Australia (Chong and Ferdiansah, 2011); and Indonesia (Donna and Ningsih, 2020; Mareta et al. , 2021; Wafiroh et al.…”

“…Examples of social factors are environmental uncertainty and social pressure (Young, 1985a). Additionally, budgetary slack has been studied in various contexts, such as industry sectors: manufacturing (De Baerdemaeker and Bruggeman, 2015); Chemical (Nouri and Parker, 1996); and Non-Financial (Damrongsukniwat et al, 2015), and countries: Malaysia (Adnan and Sulaiman, 2007); USA (Hobson et al, 2011); Nigeria (Ajibolade and Akinniyi, 2013); Turkey (Yilmaz et al, 2014); Australia (Chong and Ferdiansah, 2011); and Indonesia (Donna and Ningsih, 2020;Mareta et al, 2021;Wafiroh et al, 2020). Douglas and Wier (2000) argue that budgetary slack contains ethical issues because budgetary slack is not consistent with role-related norms and the desired virtues of professional managers and accountants.…”

Why Accountants Under Pressure Still Be Able to Honest? Experimental Research

“…Budgetary slack can cause companies to experience decreased competitive advantage, lower income, and unhappy employees [6]. Meanwhile, on the other hand, social pressure causes high-potential employees to commit budgetary slack [7][8][9]; Social pressure causes an individual to lose direction and be confused about whether to be honest according to the company's code of ethics or follow pressure from superiors or colleagues to create budgetary slack [10].…”

Does Religiosity Matter? Experimental Research on Abusive Supervision in Budgetary Slack Creation

“…Gibson et al (2011) stated that personal values play a significant role in the choice-making process (e.g., budgetary slack). Previous research has proven the link between budgetary slack and locus of control (Mareta et al, 2021), moral judgment (Hobson et al, 2011), motivation (De Baerdemaeker & Bruggeman, 2015), and perception of justice (Özer & Yilmaz, 2011). One of the personal values that can be seen as a barrier to the development of Budgetary Slack is religiosity.…”