Measuring production efficiency in a not-for-profit setting
Article Abstract:
Managers typically do not utilize information generated by productivity measurements when making control and planning decisions. However, traditional budgeting techniques, particularly those based on assumptions of fixed input cost shares, can generate inadequate information for the monitoring of performance evaluation and controls. A study of the data outputs and input consumption of 33 Tennessee correctional institutions was conducted to determine the effect of model specification on explaining operating expenditures in a budget. The research reveals that decision-making based on the matching of appropriations with expenditures in line-item budgets may not minimize costs.
Publication Name: Accounting Review
Subject: Business, general
ISSN: 0001-4826
Year: 1990
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Participative budgeting: effects of a truth-inducing pay scheme and information asymmetry on slack and performance
Article Abstract:
Empirical evidence is provided on a truth-inducing plan that has been widely discussed in the literature of incentive compensation plans. In an experiment, subjects acting as subordinates performed a production task. Budgets were set participatively under one of two pay schemes, truth-inducing or slack-inducing. The budgets were made in either the presence or absence of a superior-subordinate information asymmetry about the performance capability of the subordinates. Slack did not differ significantly between pay schemes when the information asymmetry was absent. Slack was significantly lower under the truth-inducing scheme when the information asymmetry was present.
Publication Name: Accounting Review
Subject: Business, general
ISSN: 0001-4826
Year: 1988
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Information, asymmetry, incentive schemes, and information biasing: the case of hospital budgeting under rate regulation
Article Abstract:
Methods used in the State of Washington to regulate hospital revenues encourage hospitals to bias budget data. Research results provide evidence of biasing, in certain predictable ways; budget data reported to the Washington State Hospital Commission are analyzed. One example of biasing budget data is overstating the budgeted costs associated with increased hospital volume.
Publication Name: Accounting Review
Subject: Business, general
ISSN: 0001-4826
Year: 1986
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