The Relationship Between Machiavellian Leadership, Budget Participation, and Budgetary Slack: mediating propensity to create slack and moderating Locus of Control

Abstract

The study aims to investigate the relationship between Machiavellian Leadership style, Budget Participation, and Budgetary Slack, with the mediating role of Propensity to create slack, and the moderating role of Locus of Control. The study encompasses bankers, who work in Egyptian banking sector. A total of 384 questionnaires were distributed using electronic survey, and 274 questionnaires were retrieved, with a response rate of 71.3%, statistical analysis was conducted on 248 questionnaires. Simple and multiple regressions were used to analyse the data and test hypotheses. The study found a significant positive effects of Machiavellian Leadership style, Budget Participation, on Budgetary Slack. Moreover, the study found a positive and significant partial mediating role of Propensity to create slack on this relation. Finally, the study found a negative and significant partial moderating role of locus of control on the relationship between Machiavellian Leadership style and budgetary slack. The reported findings are interdisciplinary in nature, as it contributes to two different literatures, namely Management accounting literature and organizational behaviour literature. Moreover, this is one of the first studies to confirm the concluded mediating and moderating roles in the middle eastern context.