CULTURAL DIFFERENCES IN MANAGERS' PROPENSITY TO CREATE SLACK

Chong M. Lau, I. R C Eggleton

Research output: Chapter in Book/Report/Conference proceedingChapterpeer-review

12 Citations (Scopus)

Abstract

This study examines the impact of national culture on budgetary slack. Prior studies have suggested a significant three-way interaction among budgetary participation, performance evaluative style and information asymmetry affecting budgetary slack. As national culture may influence budgetary participation, this study hypothesizes that national culture may interact with performance evaluative style and information asymmetry to affect slack. The effects of the cultural dimensions of power distance and individualism provide the theoretical justification for hypothesizing a difference in the extent of budgetary participation between Australia and Singapore. The results support: (i) a significant relationship between national culture and budgetary participation; and (ii) a significant three-way interaction among national culture, performance evaluative style and information asymmetry affecting budgetary slack. These results may have important implications for multinational corporations in the management of budgetary slack across cultures.

Original languageEnglish
Title of host publicationAdvances in International Accounting
Pages137-174
Number of pages38
Volume17
DOIs
Publication statusPublished - 2004

Publication series

NameAdvances in International Accounting
Volume17
ISSN (Print)08973660

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