Coping with ambiguity through the budget: the positive effects of budgetary targets on managers' budgeting behaviours

Marginson, David Evan Winston and Ogden, Stuart 2005. Coping with ambiguity through the budget: the positive effects of budgetary targets on managers' budgeting behaviours. Accounting Organizations and Society 30 (5) , pp. 435-456. 10.1016/j.aos.2004.05.004

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Abstract

Much consideration has been given over the years to what may be described as the 'negative' aspect of budgeting; that budgets may constrain innovation and learning, and that budgetary pressure may lead to unintended behavioural side effects. In contrast to this, the present study examines the extent to which budgets have a more positive, 'comforting' role to play in the individual's work experiences. We argue that managers confronted with uncertainties associated with role ambiguity may respond by becoming positively committed to achieving budgetary targets as budgets offer a source of structure and certainty. We find that the use of budgets as an antidote to role ambiguity is a powerful influence on the manager's budgeting behaviour. We test the strength of this effect and we find that budgetary commitment brought on by the experience of role ambiguity may over-ride the potential for recognised explanatory variables such as leadership style, the expectations of the superior, and occupational socialisation, to inform managers' budgeting behaviours in these circumstances. Budgets, it seems, may be as useful to the individual as they are problematic.

Item Type:	Article
Date Type:	Publication
Status:	Published
Schools:	Business (Including Economics)
Publisher:	Elsevier
ISSN:	0361-3682
Last Modified:	19 Mar 2016 22:05
URI:	https://orca.cardiff.ac.uk/id/eprint/2823

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