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Article
Publication date: 10 September 2018

Niels Sandalgaard and Christian Nielsen

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.

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.

Details

Journal of Applied Accounting Research, vol. 19 no. 3
Type: Research Article
ISSN: 0967-5426

Keywords

Article
Publication date: 19 October 2012

Niels Sandalgaard

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.

4413

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.

Article
Publication date: 5 April 2011

Niels Sandalgaard, Per Nikolaj Bukh and Carsten Stig Poulsen

The purpose of this paper is to report the findings of a study of how dispositional factors of motivation rooted in personality interact with participative budgeting to…

2078

Abstract

Purpose

The purpose of this paper is to report the findings of a study of how dispositional factors of motivation rooted in personality interact with participative budgeting to affect budget goal commitment.

Design/methodology/approach

The study is based on a survey among bank managers from a Scandinavian regional bank. To assess the motivational disposition of the bank managers, the short version of the multi‐motive grid test (MMG‐S) is used. The management accounting variables are measured by traditional and well‐tested instruments.

Findings

The results indicate that the effect of increased budgetary participation on budget goal commitment is largest for subordinates with a high need for power or a low need for affiliation. For subordinates with a low need for power or a high need for affiliation the effect of budgetary participation is small.

Research limitations/implications

The study confirms that the interaction between personal‐level psychological variables, e.g. motives, and situational variables, e.g. budget participation, determine action, e.g. budget commitment. Taking personal‐level variables into consideration in research on management accounting systems are thus important in studies which include individual level factors.

Practical implications

The practical implications are that a general management concept, as budget participation, should be applied with knowledge of how situational factors will interact with the personal characteristics of the involved employees.

Originality/value

Most management accounting research that uses psychological theory, focuses on the effects of management accounting on the minds and behaviour of individuals and not on the effect of individual's minds on management accounting as this paper does. The paper is the first to use the MMG‐S in a management accounting study.

Details

Journal of Human Resource Costing & Accounting, vol. 15 no. 1
Type: Research Article
ISSN: 1401-338X

Keywords

Article
Publication date: 26 August 2014

Niels Sandalgaard and Per Nikolaj Bukh

This paper aims to investigate reasons for going Beyond Budgeting and the practical issues organizations face when they change their management accounting system based on…

15542

Abstract

Purpose

This paper aims to investigate reasons for going Beyond Budgeting and the practical issues organizations face when they change their management accounting system based on inspiration from the Beyond Budgeting model.

Design/methodology/approach

The authors apply a case study approach. The primary data source is interviews. The case company is a global company in the agri-food industry that is organized as a cooperative.

Findings

The authors propose that many organizations that change their management accounting system on the basis of inspiration from Beyond Budgeting will maintain fixed budget targets. Furthermore, the authors propose that even when the use of budgets at the corporate level focuses on few line items, the diagnostic use of budgeting at lower levels in the organization may focus on a larger number of line items.

Research limitations/implications

The study is subject to the usual limitations of case-based research. The propositions made in the paper should be further investigated in other organizations attempting to change their management accounting system with inspiration from Beyond Budgeting.

Practical implications

This study shows that the lack of internal benchmarks and the need to deliver the expected results to the company’s owners might hinder the implementation of the Beyond Budgeting model as described in the practitioner-based Beyond Budgeting literature.

Originality/value

The paper is one of the few case studies in the academic literature to analyze the practical issues organizations face when changing their way of budgeting on the basis of inspiration from Beyond Budgeting.

Details

Journal of Accounting & Organizational Change, vol. 10 no. 3
Type: Research Article
ISSN: 1832-5912

Keywords

Abstract

Details

Baltic Journal of Management, vol. 7 no. 4
Type: Research Article
ISSN: 1746-5265

Content available
Article
Publication date: 5 April 2011

Robin Roslender

563

Abstract

Details

Journal of Human Resource Costing & Accounting, vol. 15 no. 1
Type: Research Article
ISSN: 1401-338X

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