The Determinants of Relationship Between Budgetary Participation and Budgetary Slack

The objective of this study is to test the influence of budgetary participation on budgetary slack, as well as to test whether or not information asymmetry, job relevant information, goal orientation, organizational commitment, and innovation perception are the moderation variables that affect the relation between budgetary participation and budgetary slack. Sample in this research is the managers in all Faculty of “X” State University in Indonesia who comprised of the head of department and the head of study program in total number 87 manager. Analysis is done through descriptive, instruments of validity and reliability tests, classical assumption test, and interaction regression analysis. Research findings showed that budgetary participation negatively affected budgetary slack. Higher participation level in the budgetary process will decrease the tendency of budgetary slack from happening. Information asymmetry, goal orientation, and innovative perception moderate the relation between budgetary participation and budgetary slack. Job relevant information and organizational commitment do not have any influence on the relation between budgetary participation and budgetary slack. This article gives contribution to the inconsistencies in many previous studies about the relation between budgetary participation and budgetary slack by adding other variables that are suitable with the organizational characteristics of public sector related to work behavior and work culture especially in state university and in emerging country scenario.