How Do Trust and Culture Create Budgetary Slack in State Owned Enterprise? (Case Study in A State Owned Enterprise) Patria Prasetio Adi, Dwi Indah Lestari
Universitas Jenderal Achmad Yani
Abstract
Budgets have long been used as part of formal management control. The use of budgets as formal controls triggers disfunctional behaviours such as slack. This qualitative study examined how trust and culture contribute to budgetary slack in state-owned enterprises (BUMN) by focusing on one of these BUMN as the research subject. Due to the confidential nature of the data collected for this study, the BUMN is identified as BUMN X. Comparing the theory^s applicability to BUMN^s implementation begins with an examination of the literature. This study used in-depth interviews, group discussion forums, and document analysis to collect essential data. According to the results, the budgetary slack that occurred in BUMN X was positive. The dominant role of the board of directors has an impact on the confidence that is established during the preparation and execution of the budget. In order to complement formal budgetary control, it became necessary to consider informal control.
