The budgeting climate concept and its application to case organizations’ budgeting—an explorative study

Ihantola, Eeva-Mari

doi:10.1016/j.scaman.2006.03.004

Cited by 4 publications

(7 citation statements)

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“…In conclusion, the above field studies not only revealed that shared meanings of the purpose, accuracy and significance of budgets exist owing to managers' close interaction with each other in their day‐to‐day situations (Ihantola, 2006, p. 163). They also found differing purposes for budgets across organizational levels (Ihantola, 2006; Lukka, 1988a, b).…”

Section: Theoretical Frameworkmentioning

confidence: 97%

“…162‐3). Likewise, a director may use budget targets to authorize activities and to motivate subordinates, even when employees may have become used to perceiving planning and controlling (including performance evaluation) as the principal roles of budgeting (Ihantola, 2006).…”

Section: Theoretical Frameworkmentioning

confidence: 99%

“…The longitudinal case study by Ihantola (2006) illustrates how a serious conflict in the perceived roles of budgets can reduce the accuracy and significance of budget targets. A director's attempt to authorize activities and to motivate subordinates resulted in high sales targets biased upwards to create budgets as optimistic as possible, and consequently in negative budget deviations on an annual basis.…”

Section: Theoretical Frameworkmentioning

confidence: 99%

“…Since the studies by Argyris (1952, 1953), a substantial body of literature has examined the methods for setting budget targets; the level of difficulty in achieving budget targets; the role of budget targets in evaluating and rewarding employee performance; and the effects of budget targets on employee motivation and employee and organizational performance (Covaleski et al , 2007, p. 7). Some studies have proposed that the purposes of budgets may be interpreted differently not only across organizations but also across organizational levels (Lukka, 1988a, b; Ihantola, 2006) and by accountants and managers (Emmanuel et al , 1991, pp. 161‐2).…”

Section: Introductionmentioning

confidence: 99%

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How do controllers and managers interpret budget targets?

Kihn

2011

Journal of Accounting &Amp; Organizational Change

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PurposeThe purpose of this study is to further our understanding of how and why interpretations of budget targets differ from one person to another even in the same business unit.Design/methodology/approachA qualitative case study research approach is adopted, involving a review and analysis of the literature and interviews conducted among controllers and managers of a highly successful business unit.FindingsBoth the theoretical and empirical results suggest that organizational budgetary processes do not provide a similar understanding of budget targets for each person. While some shared interpretations are evident, individual‐level variations occur in the personal and subjective meanings that controllers and managers give to budget targets in their own consciousness, situationality and corporeality. A personal historical basis for understanding may impact a manager's interpretation of budget targets, but the interpretations can also be dynamic and change over time.Research limitations/implicationsThe study is both facilitated and limited by its basic assumptions and approaches, and the findings may be most relevant to companies with similar profiles. Nevertheless, the study furthers our understanding of the characteristics of controllers and managers and their perception of the meaning of this important feature of accounting in practice.Practical implicationsIt could be highly useful to jointly discuss the intended primary purposes and nature of organizational budget targets. Otherwise, people may understand targets in different and perhaps even contradictory ways, which could in turn impair the functioning of control systems.Originality/valueThis paper contributes to current budgeting research in that it interprets individual‐level differences.

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Section: Theoretical Frameworkmentioning

confidence: 97%

Section: Theoretical Frameworkmentioning

confidence: 99%

Section: Theoretical Frameworkmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

How do controllers and managers interpret budget targets?

Kihn

2011

Journal of Accounting &Amp; Organizational Change

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“…Para a autora, enquanto algumas interpretações são claras, as variações a nível individual podem ocorrer conforme os significados pessoais e subjetivos que gestores dão às funções do orçamento em sua própria consciência, situacionalidade e corporalidade (Kihn, 2011;Pihlanto, 2003). Os estudos de campo realizados sobre o orçamento revelaram que o orçamento pode ser utilizado para diferentes funções entre os níveis organizacionais (Ihantola, 2006;Lukka, 1988) e gestores de diferentes áreas (Kihn, 2011). Para Kihn (2011), as percepções em relação às funções do orçamento empresarial diferem entre cada gestor, alguns expressando significados limitados e outros, amplos, acerca do artefato.…”

Section: Funções Do Orçamento Empresarialunclassified

As Múltiplas Funções do Orçamento Empresarial

2016

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Resumo O orçamento é um dos principais artefatos de gestão e é utilizado para diferentes propósitos. Estudos têm desconsiderado que esse artefato pode ser utilizado para múltiplas funções e ser percebido diferentemente por executivos dentro de uma mesma organização. Este artigo discute a ideia de múltiplas funções do orçamento empresarial e investiga sua associação com a percepção de utilidade e relevância do artefato. Foi realizado um survey single entity, em uma empresa do setor elétrico brasileiro a partir de um questionário que foi enviado a executivos de diversas áreas abrangendo uma amostra de 75 gestores. O estudo revelou que a importância do orçamento para desempenhar as funções de planejamento e diálogo está associada à percepção de utilidade e de relevância do artefato. Especificamente, constatou-se que as funções de diálogo (ex post) estão mais fortemente associadas à utilidade para gestão e relevância para a tomada de decisões, do que as funções de planejamento (ex ante). Como consequência, são obtidos indícios de que o orçamento empresarial não deveria ser visto como um artefato estático de planejamento, e preocupações em relação à motivação, à comunicação, cujas funções são de diálogo, deveriam ser consideradas fundamentais para que o artefato possa ser explorado com maior intensidade no ambiente organizacional.

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Management control systems and strategy alignment after an MBO: A case study on the influence of the personal preferences of dominant individuals

Sales

Carenys

2012

Spanish Journal of Finance and Accounting / Revista Española de

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The budgeting climate concept and its application to case organizations’ budgeting—an explorative study

Cited by 4 publications

References 64 publications

How do controllers and managers interpret budget targets?

How do controllers and managers interpret budget targets?

As Múltiplas Funções do Orçamento Empresarial

Management control systems and strategy alignment after an MBO: A case study on the influence of the personal preferences of dominant individuals

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