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The purpose of this study is to examine the design and implementation of enterprise risk management (ERM) in three large Chinese state-owned enterprises and to develop propositions on integrating ERM, budgetary control system and cash flow stability approach.

This study adopts a field study approach to analyze the risk assessment and risk-return matching of ERM. A field study was carried out over three years from 2008 to 2011 in three Chinese state-owned enterprises. These companies were chosen because less attention has been given to the implementation of ERM in such firms.

First, the authors find that all three companies use budgetary control to identify risks, analyze each risk to determine the potential consequences, determine the acceptable levels of risk, develop a risk mitigation plan and monitor the activities in all business processes that may change the levels of risks continuously. Second, the companies focus on cash flow risks through budgetary control to ensure the stability of cash flows. Finally, the degree of intensity of using budgetary control institutionalization to design and implement ERM has a positive impact on the level of risk acceptance and risk assessment culture.

The findings of this study, however, should be interpreted with caution because this study was conducted in three Chinese state-owned enterprises. To increase the generalizability of the findings, future research is encouraged to replicate this study in different industries, as well as in different countries. Furthermore, future research might also examine the authors’ propositions using a large-scale survey across other regions of the world.

Companies can minimize resistance to change by using budgetary control institutionalization when implementing the ERM. State-owned enterprises can initiate and implement a new risk management system by identifying the potential risks and by developing a risk mitigation plan.

The results of this study will help companies, particularly state-owned enterprises, to improve their performance and become more competitive, which in turn will benefit the society as a whole by performing their risk driver identification, risk driver impact assessment, risk management actions and risk management optimization more effectively.

The authors investigate how the firms use a legitimate system, namely, budgetary control, that is widely accepted and used in China to foster the acceptance and use of ERM. The authors also develop testable propositions of ERM implementation and cash flow stability that will provide useful guidelines for future research.

The capacity to plan, manage and control small and medium-sized enterprises (SMEs) is critical to realising their organisational goals. This paper assesses the effectiveness and perception of budgeting and budgetary control systems among SMEs.

Relying on the goal-setting theory (GST) and a methodology that accommodates questionnaires, data were collected from 170 manufacturing SMEs located in Cape Town, South Africa.

Research results affirm that the deployment of budgeting benefits from a positive perception of the value of budgeting and budgetary controls by key SME stakeholders. The study also finds that the perception of budgeting mirrors the level of education of SME operators, as educated respondents understand the value of implementing robust budgeting systems. Despite its focus on manufacturing SMEs, this study suggests that the manufacturing budget is the least utilised budgeting system among these organisations.

The study reinforces the communication power of budgeting and budgetary controls as SMEs and economic agents are not only aware of corporate objectives but are equally incentivised to support the attainment of these objectives.

Despite the extensive application of GST among scholars, its use in budgeting and budgetary control literature, particularly among SMEs in developing contexts, is limited. In line with GST, this study indicates that when agents establish and implement a plan, they are motivated to pursue and realise the set expectations while consistently evaluating themselves for improvement opportunities.

To modernize budgeting system is a challenge issue in many developing countries. To some scholars (Schick, 1998a, 1998b; Ma, 2009a), developing countries must first put into place basic budgetary controls before moving to more advanced models of budgeting. This approach of “basic first,” however, is questioned by others (e.g., Andrew, 2006). Drawing on China's recent budget reforms, this essay reconfirms the validity of the “basics first” approach. In China, budget reform since 1999 has begun to install budgetary controls for state finance, leading to an enhancement of budgeting capacity and financial accountability. However, governments at the same time have begun to be plagued by the unexpected problem of delays in spending and the accumulation of significant underexpenditures. Contrary to what many people may believe, we contend that this somewhat odd problem arises not because the new budgeting system has exercised too much control but rather because the new system is not yet effective in exerting budgetary controls.

This study examines how two important situational factors (corporate diversification and business unit strategy) and two elements of a firm’s administrative system (accounting‐based budgetary controls and associated incentives) affect the presence of slack in business unit budgets in diversified firms. The relationships among these variables are established by building on theories from organizational economics, the information‐processing view of organizations, and organizational behavior. Data are collected from 37 firms and 153 business units within these firms. The main results indicate: that corporate diversification is positively associated with slack in business unit budgets; and that tight budgetary controls and high‐powered incentives effectively curtail such slack. However, diversification does not seem to drive corporate managers to rely more on these systems to reduce higher budgetary slack associated with diversification. This suggests: that diversified firms employ a conscious strategy of slack at the business unit level to reduce information‐processing needs at the top; or that the design of the internal management control system is a function of factors other than corporate diversification. With respect to the latter explanation, the results indicate that business units that pursue a differentiation strategy receive less tight budgetary controls, which leaves them with the necessary slack to effectively pursue the critical success factors on which their strategies are built.

This paper aims to investigate the emergence of the enabling characteristics of new budgetary practices and their implications for the role of controller.

The longitudinal perspective of this qualitative case study is based on interviews of controllers and managers involved in budgetary work. This study monitored the four enabling characteristics of management control, namely, repair, internal transparency, global transparency and flexibility (Adler and Borys, 1996), related to the new budgeting practices in one global paper company.

The findings of the study demonstrate that the implementation of rolling forecasting was a major attempt at “repair” to remedy the incompleteness of accounting information, which made controllers experts in producing and delivering more realistic forward-looking information in the organization. The increasing internal and global transparency of new budgetary practices enabled controllers at various levels of organization to develop new competences, which helped controller network to build a holistic view of the totality of control and supply more relevant information in organization. Moreover, the inherent flexibility of the system was a major condition for improving organizational effectiveness in budgetary work. However, the study shows that the controller’s attitude towards enabling formalization is not necessarily positive if the system is not aligned with professional mindset and competence.

This study adds to the understanding of the complementarity between new developments of budgeting and controller role by addressing the enabling uses of management control systems, which have the potential to enhance the controller role change.

Prior research suggests that goal setting with an emphasis on accurate and tight budget targets may influence the extent of subordinates' performance. This study, however, argues that such goal setting alone is not sufficient. The implementation of other accounting controls is needed before improved performance is possible. Specifically, this study investigates: (i) if budgetary performance is increased only when an emphasis on accurate and tight budget targets is complemented with a high extent of cost control; and (ii) if these effects are found only for the production function, but not for the marketing function. The results, based on a sample of 104 senior Australian managers, support a significant two‐way interaction between an emphasis on tight budget targets and cost control affecting budgetary performance. Budgetary performance is high only when both emphasis on tight budget targets and cost control are high. These results are applicable to both the production and marketing functions.

This study aimed to examine the adoption of consortium blockchain technology to ensure interoperability for the transparency of budgetary control in Ghanaian local government.

This study is based on the design science research (DSR) observational technique for developing a consortium blockchain budgetary control system for Ghana's local government.

The study resulted in the design of a consortium blockchain monitoring and evaluation system to set up a mechanism to monitor various budget projects, processes and transactions for Ghana's local government. The findings also proved Ghana is ideally positioned to gain an advantage from designed artefacts such as ours, given its digital financial service (DFS) policy. In addition, the evaluation of the designed artefact proves there will be a positive impact on budgetary processes by addressing transparency concerns; however, the success of this concern depends on how the local government organisation embraces the artefact.

The study sheds light on budget monitoring and evaluation tied to peer-to-peer (P2P) participation in the public sector via an advanced administrative digitalised networking and communication algorithm (A Distributed Ledger Technology - blockchain). The difference between the designed artefact and the traditional M&E system is argued. The study is limited by the paradoxes and inefficiencies of the integration of blockchain into the Ghanaian local government but, at the same time, presents a high level of certainty and possibility.

The proposed artefact has presented relevance because it is a new solution to existing concerns like trust, transparency, accountability and compliance, thereby improving local government budget administration.

The study has offered unique and new methods, guidelines and designs for tracking various budget projects and processes beyond the conventional technology-driven approach via DSR, exhibiting a unique solution for solving budget transparency, trust, accountability, compliance and data accessibility concerns.

Responses to environmental uncertainty have included designating marketing units to interface with the environment to enable manufacturing units to operate in conditions approximating certainty. If buffering is effective, the impact of environmental uncertainty should be lower and conditions may be more suitable for a greater reliance on budgetary control in manufacturing than in marketing departments. The objectives of this study are to first, assess if there is a difference in the level of environmental uncertainty between these functions. Second, to evaluate if the relation between reliance on budgetary control and unit performance is influenced by departmental function. Third, since function and environmental uncertainty are unlikely to be perfectly correlated, if environmental uncertainty influences that relation. The results suggest that there is no difference in the level of environmental uncertainty or reliance on budgetary control between manufacturing and marketing departments. Furthermore, the findings suggest that reliance on budgetary control is no more effective in enhancing performance in either unit category. On relaxing the presumption that function proxied for environmental uncertainty, it was found that reliance on budgetary control is more effective in enhancing performance in conditions of low rather than high environmental uncertainty.

Prior studies on the interactive effects of performance evaluative style and budgetary participation on managers' budgetary performance have overlooked several important issues. First, the moderating effects of organisational commitment have largely been overlooked. Since managers, who are highly committed to their organisations, are likely to pursue their organizations' goals much more intensely than managers who are not committed to their organisations, the effects of performance evaluative style and budgetary participation on the budgetary performance of these two groups of managers are likely to differ. Second, prior studies in this research area have concentrated mainly on the manufacturing sector. The services sectors have received relatively little attention. Third, differences between privately owned service organisations and publicly funded service organisations and their effects on performance have also not been considered. To address these gaps in the literature, this study investigates the three‐way interaction between reliance on financial measures for performance evaluation, budgetary participation and organisational commitment affecting budgetary performance in the health services sector. Based on a sample of 170 managers, the results indicate that highly committed managers react very differently to reliance on financial measures for performance evaluation and budgetary participation from lowly committed managers. Differences were also found between managers from the privately funded service organisations and those from the publicly funded service organisations.

This paper seeks to extend the understanding of how formal management control systems (MCSs) contribute to the construction of performance management systems (PMSs) in the French higher education (HE) sector.

Empirical data are gathered both at the global level and at the local (university) level through an in‐depth case study. This allows a dynamic multi‐level analysis based on a neo‐institutional framework.

This article shows how formal MCSs contribute to the institutionalisation of a wider PMS at the global level of the HE sector. The social context then has a determining influence on universities, through the diffusion of values and norms drained by formal MCSs, calling into question the effectiveness of the autonomy supposed to be given to universities under the new PMS. Moreover, within universities, the complex interactions between MCS and PMS resulting from learning, political interactions and conflicts of values, lead to still uncertain outcomes.

The paper focuses on one main case‐study, which is still undergoing change. Analysis could be reinforced by further longitudinal and comparative research.

Steering organisations within a framework where the State defines strategic priorities requires both appropriate performance indicators and a dialogue allowing objectives to be shared at both the social and local levels.

Institutionalisation of MCSs and accountability are discussed in the specific French context of cultural centralisation.