Document Type



Doctor of Business Administration


Business Administration

Date of Defense


Graduate Advisor

Dr. John Meriac


Dr. John Meriac

Dr. James Hesford

Dr. James Breaugh


Practitioners are frustrated with the budgeting process, frequently complaining that budgets cause undesirable and political behaviors in the organization (Jensen, 2001). One of the most frequent problems is budget gaming, which critics consider non-value added and frustrating. In a 2010 survey, over 95% of respondents acknowledged that budget gaming exists at least “occasionally” (Libby & Lindsay, 2010). Previous studies indicate budget gaming is frustrating, prevalent, and wasteful (Hansen et al., 2003; Libby & Lindsay, 2007; Neely et al., 2003).

I conducted an experiment to investigate organizational influences (organizational politics, compensation condition, ethics attestation) and their impact on budget gaming. The experiment results indicated that the political environment and compensation condition do not make a difference in the level of budget gaming. Results showed that 76% of participants gamed the budget. Half of the experiment participants were in an ethics condition (signed an ethics attestation). Of the participants in the ethics condition, 39% who signed the ethics attestation also gamed.

Interestingly, the political condition did not make a significant difference because the budgeting process (a division of resources) was found to make a difference in political behavior (Allen et al., 1979; Kacmar & Baron, 1999). The compensation condition did not make a difference. This finding is inconsistent with the claims of Jensen (2003) that severing the link between the budget and individual compensation will reduce budget gaming. The ethics attestation made a significant difference in budget gaming but not in the expected direction. Participants signing an ethics attestation gamed more than participants who did not sign an ethics attestation. Qualitative comments indicated that many participants felt that gaming the budget was not an ethical issue. Only 24% of participant comments indicated gaming was a moral hazard. This study reviewed budget games in two categories: (1) accelerating or delaying revenues and expenses and (2) under committing to revenue, fixed expenses, and long-term project expenses.

Keywords: Budgeting, Budget gaming, Organizational politics, Contingency Pay, Ethics