Budgetary slack
Budgetary slack is the deliberate padding of budget targets — setting revenue goals too low or cost allowances too high — so they are easier to meet.
Also known asbudget slack
See it move
A waterfall opens at a realistic cost target of €150,000 and rises by €30,000 of budgetary slack — deliberate padding that managers build in to make the budget easier to meet — reaching a final padded budget of €180,000. The slack reduces the budget's value as a planning and control tool by embedding an artificial safety margin that conceals the true cost expectation.
Check yourself
A sales manager believes she can realistically generate €480,000 in revenue this year. She submits a budget proposal of €380,000 to senior management. Which term best describes this behaviour, and what is its primary organisational consequence?