Enabling characteristics of new budgeting practice and the role of controller

Tiina Henttu-Aho

57 citations0/0 files storedQualitative Research in Accounting & Management

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Accounting and Organizational Management Accounting Theory and Financial Reporting Corporate Governance and Management

Abstract

Purpose This paper aims to investigate the emergence of the enabling characteristics of new budgetary practices and their implications for the role of controller. Design/methodology/approach The longitudinal perspective of this qualitative case study is based on interviews of controllers and managers involved in budgetary work. This study monitored the four enabling characteristics of management control, namely, repair, internal transparency, global transparency and flexibility (Adler and Borys, 1996), related to the new budgeting practices in one global paper company. Findings The findings of the study demonstrate that the implementation of rolling forecasting was a major attempt at “repair” to remedy the incompleteness of accounting information, which made controllers experts in producing and delivering more realistic forward-looking information in the organization. The increasing internal and global transparency of new budgetary practices enabled controllers at various levels of organization to develop new competences, which helped controller network to build a holistic view of the totality of control and supply more relevant information in organization. Moreover, the inherent flexibility of the system was a major condition for improving organizational effectiveness in budgetary work. However, the study shows that the controller’s attitude towards enabling formalization is not necessarily positive if the system is not aligned with professional mindset and competence. Originality/value This study adds to the understanding of the complementarity between new developments of budgeting and controller role by addressing the enabling uses of management control systems, which have the potential to enhance the controller role change.

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References

1996Two Types of Bureaucracy: Enabling and Coercive 2004Accounting for Flexibility and Efficiency: A Field Study of Management Control Systems in a Restaurant Chain*1994Management control in contemporary organizations: towards a wider framework 2003ERP systems and management accounting change: opportunities or impacts? A research note 1994Never mind the gap: towards an institutional perspective on management accounting practice 2003Practice Developments in Budgeting: An Overview and Research Perspective 2002Moderate impact of ERPS on management accounting: a lag or permanent outcome?2008Information system integration, enabling control and performance

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