Budgetary Participation and Budget Emphasis as Drivers of Budgetary Slack: The Moderating Roles of Information Asymmetry and Organizational Commitment in the Hotel Industry

Background: Budgetary slack can undermine financial planning, resource allocation and performance evaluation in the hotel industry. Budgetary participation and budget emphasis may influence managers' tendencies to create budgetary slack. Aims: This study examines the effects of budgetary participation and budget emphasis on budgetary slack and investigates the moderating roles of information asymmetry and organisational commitment in these relationships. Study Design: A quantitative survey design was employed to examine the relationships among budgetary participation, budget emphasis, information asymmetry, organisational commitment, and budgetary slack. Place and Duration of Study: Four-star hotels in Batam, Indonesia. Methodology: Data were collected through a survey involving 180 managers engaged in budgeting activities across four-star hotels in Batam, Indonesia. The data were analysed using Partial Least Squares Structural Equation Modelling (PLS-SEM) to assess the direct relationships between budgetary participation, budget emphasis, and budgetary slack, as well as the moderating effects of information asymmetry and organisational commitment. Results: Both budgetary participation (β = 0.131, p = 0.035) and budget emphasis (β = 0.156, p = 0.015) were positively associated with budgetary slack. Information asymmetry strengthened the associations between participation and slack (β = 0.293, p < 0.001) and between budget emphasis and slack (β = 0.433, p < 0.001). Organisational commitment weakened the participation–slack relationship (β = −0.151, p = 0.035), but did not significantly moderate the budget-emphasis–slack relationship (β = −0.030, p = 0.651). The model explains 85.3% of the variance in budgetary slack. These findings indicate that information asymmetry amplifies opportunities for slack creation, whereas organisational commitment acts as a selective behavioural constraint. Conclusion: Budgetary slack is shaped by the interaction of budgeting system design, information distribution, and managers' commitment to organisational goals. The findings contribute to agency theory and goal-setting theory by demonstrating the distinct roles of information asymmetry and organisational commitment in explaining budgetary slack. Practically, the study highlights the importance of information transparency, stronger budget verification procedures, realistic target setting, and balanced performance evaluation to reduce budgetary slack in hotel budgeting systems.