Budget based bonus, budget emphasis, budget gaming, and the impact on budget value

Rhaisya Setiawati Rachmat, SeTin SeTin


The issue of budget value has received attention and criticism from many researchers, especially that the budget value is not aligned with the sacrifices made in the budgeting process. The purpose of the study is to examine the effect of budget-based bonus and budget emphasis towards budget gaming and its implications on budget value. A questionnaire survey was used for data collection and was collected by personal and online (via email/link) to managers who have joined the Indonesian Management Association. Non-probability sampling method was used for the sample selection. A total of 286 data were collected and could be analyzed. Data were analyzed using Partial Least Square. The results show that budget emphasis affects budget gaming and also affects budget value. But budget-based bonus has no effect neither towards gaming budget nor budget value. This research enriches the budgeting literature especially for the context in Indonesia and enriches the findings of budget practices in the world. The results contribute to practitioners in making decisions, such as modifying the budget, leaving the budget, or continuing to run the budget. The design of a budget system that has more value-added to the company is an important implication of this research.

JEL Classification: M2, M40, M41

DOI: https://doi.org/10.26905/jkdp.v24i3.4236


Budget-based bonus; Budget emphasis; Budget gaming; Budget value


Ariffianto, M., & Andhariani, D. (2018). Budget surplus determinants in Indonesian regional government budgets from a budgetary slack behaviour point of view. International Journal of Economics and Management, 12(S1), 17-29.

Anthony, R. N., & Govindarajan, V. (2007). Management Control System. International Edition. 12th Edition. Singapore: McGraw-Hill.

Baron, R. M., & Kenny, D. A. (1986). The moderator-mediator variable distinction in social psychological research: Conceptual, strategic, and statistical considerations. Journal of Personality and Social Psychology, 51(6), 1173–1182.


Chong, V. K., & Ferdiansyah, I. (2012). An experimental investigation on the effect of feedback control policy and need for achievement on subordinates’ budgetary slack creation. Asia-Pacific Management Accounting Journal, 55-73.

Chong, V. K., & Khudzir, N. F. (2018). The effect of mutual monitoring and need for achievement on budgetary slack in a team-based environment. Advances in Accounting Behavioral Research, 21, 1-19. https://doi.org/10.1108/S1475-148820180000021001

Coveney, M., & Cokins, G. (2016). Budgeting, Planning, and Forecasting in Uncertain Times. American Institute of Certified Public Accountants. Inc. New York, NY 10036-8775.

Hair, J. F., Ringle, C. M., & Sarstedt, M. (2014). A Primer on Partial Least Squares Structural Equation Modelling (PLS-SEM). Thousand Oaks, CA: Sage.

Hansen, S. C., Otley, D.T., & Van der Stede, W.A. (2003). Practice developments in budgeting: an overview and research perspective. Management Accounting Research, 15, 95–116. https://doi.org/10.2308/jmar.2003.15.1.95

Heinzelmann, R. (2018). Why does beyond budgeting working in Scandinavian Organization? Working Paper, Version 27.09.2018. https://doi.org/10.15358/0935-0381-2019-S-27

Hope, J., & Fraser, R. (2003). Who needs budgets? Harvard Business Review, 81(2), 108–115.

Huang, C. L., & Chen, M. L. (2009). Relationships among budgetary leadership behavior, managerial budgeting games, and budgetary attitudes: Evidence from Taiwanese corporations. Journal of International Accounting, Auditing and Taxation, 18, 73-84. https://doi.org/10.1016/j.intaccaudtax.2008.12.007

Huang, C. L., & Chen, M. L. (2010). Playing devious games, budget emphasis in performance evaluation, and attitudes towards the budgetary process. Management Decision, 48(6), 940-951. https://doi.org/10.1108/00251741011053479

Jensen, M. C. (2001). Corporate budgeting is broken—let’s fix it. In: Harvard Business Review, 79, 10, 94–101. http://dx.doi.org/10.2139/ssrn.267651

Jensen, M. C. (2003). Paying people to lie: The truth about the budgeting process. European. Financial Management, 9(3), 379-406. http://dx.doi.org/10.2139/ssrn.267651

Kahar, S. H. A., Rohman, A., & Chariri, A. (2016). Participative budgeting, budgetary slack, and job satisfaction in the public sector. The Journal of Applied Business Research, 32(6), 1663-1672. https://doi.org/10.19030/jabr.v32i6.9814

Lau, C. M., & Scully, G. (2015). The roles of organizational politics and fairness in the relationship between performance measurement systems and trust. Behavioral Research in Accounting, 27(1), 25-53. https://doi.org/10.2308/bria-51055

Libby, T., & Lindsay, R. M. (2010). Beyond budgeting or budgeting reconsidered? A survey of North-American budgeting practice. Management Accounting Research, 21, 56-75. https://doi.org/10.1016/j.mar.2009.10.003

Libby, T., & Lindsay, R. M. (2019). The effects of superior trust and budget-based controls on budgetary gaming and budget value. Journal of Management Accounting Research, 31(3), 153-184. https://doi.org/10.2308/jmar-52238

Neely, A., Bourne, M., & Adams, C. (2003). Better budgeting or beyond budgeting? Measuring Business Excellence, 7(3), 22-28. https://doi.org/10.1108/13683040310496471

Oktorina, M., & Soenarno, Y. N. (2013). Effect of budget participation, budget emphasis, and fairness perception on the budgetary slack with managerial trustworthy behavior as moderating variable at a manufacturing company in Jakarta. Proceeding. The 2nd IBSM, International Conference on Business and Management, 2–4 October, Chiang Mai - Bangkok

Onsy, M. (1973). Factor analysis of behavioral variables affecting budgetary slack. The Accounting Review, 48(3), 535-548.

Ouassini, I. (2018). An introduction to the concept of incremental budgeting and beyond budgeting. http://dx.doi.org/10.2139/ssrn.3140059

SeTin, S. T., Sembel, R., & Agustine, Y. (2019). Budget gaming behavior: Evidence in Indonesia manufacturing companies. Jurnal Keuangan dan Perbankan, 23(2), 258-26. https://doi.org/10.26905/jkdp.v23i2.2945

Van der Stede, W.A. (2000). The relationship between two consequences of budgetary controls: budgetary slack creation and managerial short-term orientation. Accounting, Organizations, and Society, 25(6), 609-622. https://doi.org/10.1016/S0361-3682(99)00058-6

Wallander, J. (1999). Budgeting—an unnecessary evil. Scandinavian Journal of Management, 15, 402–421. https://doi.org/10.1016/S0956-5221(98)00032-3

Widanaputra, A. A., & Mimba, N. P. S. H. (2014). The influence of participative budgeting on budgetary slack in composing local governments’ budgets in Bali province. Procedia - Social and Behavioral Sciences, 164, 391-396. https://doi.org/10.1016/j.sbspro.2014.11.093

Full Text: PDF


  • There are currently no refbacks.

Jurnal Keuangan dan Perbankan (Journal of Finance and Banking)

Diploma Program of Banking and Finance, Faculty of Economics and Business, University of Merdeka Malang

Published by University of Merdeka Malang

Mailing Address:

2nd floor Finance and Banking Building, Jl. Terusan Raya Dieng No. 57 Malang, East Java, Indonesia
Phone: +62 812-2710-3387 or +62 813-3180-1534
Email: jkp@unmer.ac.id

This work is licensed under a Creative Commons Attribution-ShareAlike 4.0