Organizational and Budgetary Slack

Riahi-Belkaoui’s research shows that US firms, and possibly firms elsewhere, resort to the underutilisation of their resources, a phenomenon known as organisational and budgetary slack. In this study, the author identifies and explains the phenomenon and its causes, explicates the characteristics of organisations afflicted by it, and suggests ways to remedy it. In doing so he also analyses the role of the multidivisional structure and the performance plan in the creation of slack, and the distortion of information that accompanies it. This study is aimed at organisational behaviour theorists, organisation planners and top management in the private and public sectors.