ORGANIZATIONAL SLACK IN THE BUDGET MANAGEMENT PROCESS: A STUDY OF SENAC IN SANTA CATARINA

Abstract

The organizational slack in the budget management process has received attention from researches and managers in view of possible conflicts of interest between principal and agent. In this sense, this study aims to identify the propensity to create organizational slack in the budget management process by the SENAC’s Managers of Business Units of Santa Catarina. Descriptive research with quantitative approach was conducted through a survey. The survey includes 21 SENAC’s Managers of Operating Units of Santa Catarina. A questionnaire was sent in July 2010, and the sample is consisted of 15 survey respondents. The instrument for data collection consisted of Onsi’s (1973) research translated questionnaire, composed of 42 closed questions, involving Likert scale, with factors of eight practice dimensions of budget management, focusing on budgetary slack. The data were imported into SPSS statistics software, version 13, for analysis of the elements of slack through by descriptive statistics, Cronbach's Alpha and of the technique of factor analysis. The study results indicate that managers have a propensity to create slack in their budgets, although SENAC does not compensate their managers based on the results, which should not be a factor that motivates the creation of budgetary slack. Unlike the survey conducted by Onsi (1973), in the SENAC the reason for the creation of budgetary slack is a result of managers interest to deliver superior results related to what was included in the budget.