The objective of this paper is to synthesise available research and empirical studies on the association between uncertainty and the usefulness of the traditional budget as well as its different functionalities. Furthermore, the aim is to critically examine conclusions that support or contradict the criticism about traditional budgeting in times of uncertainty. This review should create the foundation for further research to discuss the need for alternative budgeting systems and techniques, considering the findings of the use, preferences and concerns in different organisations.
Inhaltsverzeichnis (Table of Contents)
- Rationale for research
- Specific Objectives
- Discussing the contextual variable of Uncertainty
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This paper aims to synthesize existing research and empirical studies on the relationship between uncertainty and the effectiveness of traditional budgets in various organizational functions. It critically examines conclusions that support or contradict criticisms of traditional budgeting in uncertain environments. The goal is to lay the groundwork for further research into alternative budgeting systems and techniques, considering the findings of their use, preferences, and concerns in different organizations.
- The impact of uncertainty on the effectiveness of traditional budgeting
- The limitations of traditional budgeting in dynamic environments
- The need for alternative budgeting systems in times of uncertainty
- The measurement of environmental uncertainty in organizational studies
- The subjective nature of perceived uncertainty and its impact on research findings
Zusammenfassung der Kapitel (Chapter Summaries)
- Rationale for research: This section introduces the research problem by highlighting the limitations of traditional budgeting in the face of uncertainty. It draws upon the recent experience of a multinational retailer struggling with inflexible budgets during the COVID-19 pandemic and cites academic literature emphasizing the growing dissatisfaction with traditional budgeting in dynamic environments.
- Specific Objectives: This section outlines the specific goals of the research, which include a thorough examination of the correlation between uncertainty and the usefulness of traditional budgeting in different organizational contexts. The goal is to identify potential shortcomings of traditional budgeting and to explore the need for alternative approaches.
- Discussing the contextual variable of Uncertainty: This section focuses on the concept of uncertainty and its measurement within organizational studies. It reviews existing research that investigates the impact of both environmental and task uncertainty on budgeting practices. The section highlights the challenges associated with measuring uncertainty based on individual perceptions and discusses the limitations of existing approaches.
Schlüsselwörter (Keywords)
This literature review focuses on the correlation between uncertainty and traditional budgeting, exploring the limitations of traditional budgeting systems in dynamic environments. It examines the measurement of environmental uncertainty through perceived environmental uncertainty (PEU), highlighting the challenges and limitations of relying on subjective perceptions. The review aims to contribute to the discussion about alternative budgeting systems and techniques that can better address the challenges posed by uncertainty.
- Citation du texte
- Annika Specht (Auteur), 2020, The correlation between uncertainty and the use of Traditional Budgets as a Planning and Performance Measurement tool, Munich, GRIN Verlag, https://www.grin.com/document/1223196
