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'Continuous' budgeting: reconciling budget flexibility with budgetary control

Frow, Natalie, Marginson, David Evan Winston and Ogden, Stuart 2010. 'Continuous' budgeting: reconciling budget flexibility with budgetary control. Accounting, Organizations and Society 35 (4) , pp. 444-461. 10.1016/j.aos.2009.10.003

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Abstract

This paper explores the role of budgeting in the context of the more flexible modes of management required in conditions of uncertainty. It contributes to the growing literature on the tensions between the need to meet specified financial targets, as expressed in budgets, and the need for more flexible and innovative forms of managing prompted by heightened market volatility and rapid rates of technological change. Drawing on case study evidence, the paper introduces the notion of “continuous budgeting” to highlight the ways in which one organization sought to reconcile these potentially conflicting objectives. By integrating different uses of budgeting with other management controls, the processes of “continuous budgeting” encouraged managers to use their discretion in operational matters when confronted by unexpected events. Consequently, it enabled managers to prioritise, as necessary, the revision of plans and reallocation of resources in order to meet wider strategic organizational objectives. As well as empowering managers, “continuous budgeting” also imposed strict accountabilities to ensure that managers remained committed to achieving their own and the organization’s financial targets. Thus far from being an obstacle, budgeting contributed effectively to both the flexibility and the financial discipline required for effective strategy implementation.

Item Type: Article
Date Type: Publication
Status: Published
Schools: Business (Including Economics)
Subjects: H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
H Social Sciences > HF Commerce > HF5601 Accounting
H Social Sciences > HG Finance
Publisher: Elsevier
ISSN: 0361-3682
Last Modified: 19 Mar 2016 22:29
URI: https://orca.cardiff.ac.uk/id/eprint/17981

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