Budget emphasis in small and medium-sized enterprises: evidence from Denmark
Abstract
Purpose
The purpose of this paper is to investigate the use of budget targets for performance evaluation in small- and medium-sized enterprises (SMEs) from a contingency perspective.
Design/methodology/approach
This paper is based on a survey conducted among small- and medium-sized Danish production companies. It takes a contingency approach and applies structural equation modeling to analyze the data.
Findings
The authors find that budget emphasis is related to size, decentralization and interdependence. Furthermore, the authors hypothesize and find that the degree of budget emphasis is positively related to performance.
Research limitations/implications
The usual limitations associated with survey-based research should be considered before drawing conclusions from the findings. In that regard, replications of the study could be useful.
Practical implications
The practical implication of this paper is that emphasis on the budget target in performance evaluation is of relevance for small- and medium-sized production companies.
Originality/value
This paper contributes by providing insights into management accounting in SMEs. More specifically, this paper contributes to the debate in the SME literature regarding the value of planning and budgeting in SMEs as the paper focuses on the use of budgets for performance evaluation.
Keywords
Acknowledgements
The authors gratefully acknowledge the helpful comments from participants at the Beyond Budgeting workshop (Bergen, Norway, 2013) and from participant at the 7th Conference on Performance Measurement and Management Control (Barcelona, 2013). The authors also wish to thank Lars D. Bjerregaard and Kasper Østergaard for assistance with the data collection and Tina Pedersen (In the Margins Editing) for proof reading. The authors are also thankful to the two anonymous reviewers for their helpful comments.
Citation
Sandalgaard, N. and Nielsen, C. (2018), "Budget emphasis in small and medium-sized enterprises: evidence from Denmark", Journal of Applied Accounting Research, Vol. 19 No. 3, pp. 351-364. https://doi.org/10.1108/JAAR-08-2016-0087
Publisher
:Emerald Publishing Limited
Copyright © 2018, Emerald Publishing Limited