Question

One of the directors of street and parkways department of Dream City made the following comments " For the past 10 years ,I have deliberately overstated my labor and equipment needs by 20 percent when preparing my budget request. I figure that the city council will cut it by 10 percent and I can use the 10 percent as slack. If there is money left over , I can always find a way to spend it ". Do you consider this behaviour to be ethical ? If not, what steps might you, as the budget director take to cut down this "padding"?

please provide the refrences of your answers

and thank you for your help :)

Answer 1

No, the behaviour of the director of street and parkways department of dream city is not ethical at all.
Budgetary slack means that managers are asking more resources than strictly needed. Creating slacking is considered as a general phenomenon in an organisation, because people are used to" ask everything to get something"
          But there are certain steps to cut down this padding
1) managers can given incentives not only to achieve budgetary projections but also to provide accurate projection.
2) it can avoid relying on budget as a negative, evaluative tool.
3)top management can also help to cut down this problem by participation in strategic planning process.
4) middle managers become highly committed to the organisation and create less slack. Moreover, middle management that can participate in budgeting process are autonomously motivated and as a result, create less budgetary slack.
5) autonomously motivated managers try to attain the budgetary targets because they want to, not because they have to.
        
                 So , from the above step the budget manager can cut down this problem.