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The Impact of Uncertainty and Strategy on the Perceived Usefulness of Fixed and Flexible Budgets
Author(s) -
Ekholm BoGöran,
Wallin Jan
Publication year - 2011
Publication title -
journal of business finance and accounting
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.282
H-Index - 77
eISSN - 1468-5957
pISSN - 0306-686X
DOI - 10.1111/j.1468-5957.2010.02228.x
Subject(s) - dysfunctional family , association (psychology) , economics , contrast (vision) , operations management , psychology , computer science , clinical psychology , artificial intelligence , psychotherapist
It has been claimed that the traditional annual budget is a dysfunctional management instrument and that flexible budgets, such as rolling budgets, should be used instead. However, empirical research has produced conflicting results. The results of the present study indicate that environmental uncertainty has a significant negative association with the perceived usefulness of traditional annual budgets, whereas there is no indication of a significant association with flexible budgets. By contrast, there is a significant positive association between accentuation of strategy and appreciation of both types of budget. There is also evidence of a positive association between the perceived usefulness of traditional annual budgets and the perceived usefulness of flexible budgets, supporting prior findings that these budgets are seen more as complements than rivals.