The Effect of Budget Culture on Target Ratcheting: An Empirical Research Based on Management Forecasts
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- Hayakawa Sho
- Faculty of Commerce, University of Marketing and Distribution Sciences
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- Senoo Takeyoshi
- Faculty of Commerce, Chuo University
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- Yasukata Kenji
- Faculty of Business Administration, Kindai University
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- Arai Kohei
- Graduate School of Economics, Osaka Prefecture University
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- Yokota Eri
- Faculty of Business and Commerce, Keio University
Bibliographic Information
- Other Title
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- 予算文化が利益目標のラチェッティングに与える影響―経営者利益予想による実証研究―
- ヨサン ブンカ ガ リエキ モクヒョウ ノ ラチェッティング ニ アタエル エイキョウ : ケイエイシャ リエキ ヨソウ ニ ヨル ジッショウ ケンキュウ
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Description
<p>Managers often use current budget variances when setting subordinates' subsequent budgetary targets. However, this type of target setting practice generates “ratchet effect” problems. In order to mitigate the ratchet effect, managers intentionally conduct “commitment”: they increase achievability of subordinates' targets by making them less challenging. The purpose of this study is to examine the impact of the firm-specific factors on commitment. Based on the argument of “budget culture” and its four constructs: budget firmness, target difficulty, management attention, and reward link, we use them as firm-specific factors and empirically investigate their effect on commitment. Our findings indicate that the three constructs other than “reward link” affect commitment, suggesting that the managers deal with the ratchet effect by setting subordinates' targets in consideration of characteristics of budgetary culture.</p>
Journal
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- The Journal of Management Accounting, Japan
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The Journal of Management Accounting, Japan 28 (1), 19-36, 2020-03-31
The Japanese Association of Management Accounting
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Keywords
Details 詳細情報について
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- CRID
- 1390566775127612288
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- NII Article ID
- 130007832259
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- NII Book ID
- AN10538994
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- ISSN
- 24340529
- 09187863
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- NDL BIB ID
- 030327018
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- Text Lang
- ja
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- Data Source
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- JaLC
- NDL Search
- CiNii Articles
- KAKEN
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- Abstract License Flag
- Disallowed