Uncertainty and budgets: an empirical investigation
Abstract
Purpose
The purpose of the paper is to report the findings of a study of the relation between perceived environmental uncertainty and the abandonment of traditional annual budgets.
Design/methodology/approach
The paper is based on the use of data from a survey among the largest Danish companies. The hypothesized relationships are tested by the use of logistic regression.
Findings
The results show no sign of a relationship between perceived environmental uncertainty and the abandonment of traditional annual budgets. Instead, the results show a positive relationship between competition in the environment and the adoption of rolling forecasts.
Research limitations/implications
Instead of focusing on the budgeting system in isolation, future research should, to a larger extent, focus on management control systems as a package.
Practical implications
The results indicate that a competitive environment could be handled by retaining budgets but supplementing them with rolling forecasts.
Originality/value
This paper is among the first to investigate the relationship between environmental uncertainty and the abandonment of traditional annual budgets.
Keywords
Citation
Sandalgaard, N. (2012), "Uncertainty and budgets: an empirical investigation", Baltic Journal of Management, Vol. 7 No. 4, pp. 397-415. https://doi.org/10.1108/17465261211272157
Publisher
:Emerald Group Publishing Limited
Copyright © 2012, Emerald Group Publishing Limited