The place of budgets among management control devices: a contingency approach Doctoral thesis by

Iliya Komarev Abstract The research is aiming to redefine the place of budgets among other management control devices in a context of increasing use of non-accounting control tools like balanced scorecards. A general model explaining the relative place of budgets is build up and tested through a cross-sectional survey on French companies. The model is suggested after studying the historical factors having influenced the introduction of budgets in the private sector management practices. Adopting a contingency approach we use insights from the behavioural accounting theory to transform historical factors into contextual variables and explain the relative importance of budgets upon scorecards. Results are supporting the theory on the contingent place of budgets. However, little support is provided for the linear, mediation-effects contingency tested trough a structural equation model. Best performing companies adapt their budgeting systems to the influence of contingency factors (perceived environmental uncertainty, quality driven strategies, and progressive leadership styles) on a configurative, non-linear pattern. Conflicting actions of context factors engender selective fit of 1) the relative importance of budgets upon scorecards and 2) the budget system scope. Though, extreme “beyond budgeting” (lowest relative importance of budgets and lowest budget system scope) seemed inefficient even when contextual factors should be more favourable to use it.

Keywords: budget – history of budgeting – management control tools – scorecards – contingency – structural equation modelling – systemic models of contingency

Institut de Recherche en Gestion des Organisations (IRGO) Centre de Recherche en Contrôle et Comptabilité Internationale (CRECCI)