Strategic Budgeting and Budgeting Evaluation Effects on China’s Manufacturing Companies’ Performance

Fengran Zhou, Yaoping Liu (), Surachai Triwannakij and Boge Triatmanto
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Fengran Zhou: Department of Management Science, Institute of Science Innovation and Culture, Rajamangala University of Technology Krungthep, Bangkok 10120, Thailand
Yaoping Liu: Institute of Science Innovation and Culture, Rajamangala University of Technology Krungthep, Bangkok 10120, Thailand
Surachai Triwannakij: Department of Management Science, Institute of Science Innovation and Culture, Rajamangala University of Technology Krungthep, Bangkok 10120, Thailand
Boge Triatmanto: Department of Management Science, Institute of Science Innovation and Culture, Rajamangala University of Technology Krungthep, Bangkok 10120, Thailand

JRFM, 2025, vol. 18, issue 4, 1-18

Abstract: This study investigates the interplay between budget planning and budgeting evaluation functions in relation to company budget management performance, specifically focusing on the phenomenon of budgetary slack among manufacturing companies in China. A total of 589 employees, including senior executives and finance managers, participated in this study to answer structured questionnaires. Structural Equation Modeling (SEM) was used to test the proposed research hypotheses; furthermore, Hayes’ mediation analysis was applied to assess the direct and indirect effects of budgetary slack in mediating the relationship between the predictor variable (e.g., budget planning and budgeting evaluation) and the outcome variable (budgeting performance). The findings reveal that both budget planning and evaluation significantly mitigate budgetary slack while enhancing the overall budget management performance. The results suggest that effective budgeting performance is positively influenced by the quality of budget planning and evaluation functions, which directly and indirectly reduce budgetary slack. Such evidence underscores the critical role of the budgeting management process in achieving optimal budgeting performance, with budgeting evaluation serving as a catalyst for constructive feedback to prevent slack. This study advocates for companies to strengthen the alignment between their budgeting processes and budgeting strategies. Furthermore, this research provides a comprehensive strategy that integrates technology, strategic budget management, and financial governance, equipping business entities to navigate and thrive in a dynamic economic landscape.

Keywords: budget management; budgetary slack; budgeting performance; SEM (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2025
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