Budget participation and budget emphasis in low uncertainty conditions - Considering alternative reasons to budget

Publication Type:
Conference Proceeding
2007 AFAANZ Conference, 2007, pp. 1 - 33
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This case study investigates how lower budget participation may be better suited to firms with a high budget emphasis, in lower uncertainty conditions. The organisation studied generates greater benefits when budget participation is low, though it has a high budget emphasis. This result is opposite to that found in Lau, et.al. (1995). The reason for this difference is shown to arise because budget emphasis in the case firm is not primarily related to performance evaluation as defined in prior budget research (Hopwood, 1972). Instead, the main reason for budgeting is operational planning (Hansen and Van der Stede, 2003), and this difference is shown to lead to the opposing findings. When budgets are used primarily for operational planning, their relationships to organisational antecedents appear to be different than when used for performance evaluation.
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