Advanced Search
MyIDEAS: Login to save this article or follow this journal

A Theoretical Analysis of the Impact of Adopting Rolling Budgets, Activity-Based Budgeting and Beyond Budgeting

Contents:

Author Info

  • Stephen Hansen
Registered author(s):

    Abstract

    Budgeting accomplishes many goals in an organization and evaluating the potential impact of a change is difficult. I investigate the organization-wide effects of three distinct budgeting alternatives (rolling budgets, activity-based budgeting and beyond budgeting) using a model that incorporates three important budgeting functions: forecasting, operational planning and performance evaluation. From the perspective of the whole organization, each budgeting alternative improves profits. I then examine the department preferences for each alternative when each function is under the control of a different department and each department has its own, department-specific performance metric. Forecasting is judged on the variance of the base demand forecast, operational planning on the expected unit capacity costs and performance evaluation on the salesperson's expected action. In my model all departments always favor rolling forecasts, while only one department always favors beyond budgeting (or activity-based budgeting). For beyond budgeting and activity-based budgeting, the preferences of the two other departments vary depending upon the model parameters.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.tandfonline.com/doi/abs/10.1080/09638180.2010.496260
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Bibliographic Info

    Article provided by Taylor & Francis Journals in its journal European Accounting Review.

    Volume (Year): 20 (2011)
    Issue (Month): 2 ()
    Pages: 289-319

    as in new window
    Handle: RePEc:taf:euract:v:20:y:2011:i:2:p:289-319

    Contact details of provider:
    Web page: http://www.tandfonline.com/REAR20

    Order Information:
    Web: http://www.tandfonline.com/pricing/journal/REAR20

    Related research

    Keywords:

    References

    No references listed on IDEAS
    You can help add them by filling out this form.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as in new window

    Cited by:
    1. Maritana Sedysheva, 2011. "Building High Performance Strategy of Military Expenditures: The Utility Function in the Middle of Defence Budgeting," Annals of the University of Petrosani, Economics, University of Petrosani, Romania, vol. 11(4), pages 271-286.

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:taf:euract:v:20:y:2011:i:2:p:289-319. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.