The role of budgets in organizations facing strategic change: an exploratory study

Article Abstract:

Simons' (1990) interactive/diagnostic typology of management control systems proved to be useful in assessing the role of budgeting in companies undergoing strategic change. An analysis of data taken from 63 hospitals shows the validity of Simon's prediction on budgeting, which states the positive effect of interactively utilizing budgeting during strategic redirection on performance. It shows consistency with Simon's description of the manner in which control systems are applied to address strategic uncertainties. The data also validates Simon's claim regarding the influence of effective application of strategic priorities on the way accounting controls are utilized. The use of budgeting by upper management was proven effective in terms of satisfying the learning and adaptation needed when strategic change is going on.

Accounting Methods, Organizational change, Strategic planning (Business), Financial management

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Fabricating budgets: a study of the production of management budgeting in the National Health Service

Article Abstract:

The processeses involved in the development of accounting and budget systems were examined. The data used in the study were obtained from the UK's National Health Service where a new budgeting system has just been introduced. Results of the study contradict the assumption that accounting systems are fixed and well-defined technologies that are developed and introduced to the organization. Instead, findings indicate that accounting and budgeting systems are fabricated in a variable fashion. Management budget systems start out with ambiguous characteristics, objectives and uses which become more specific as go through the design and implementation stages.

Admin. of public health programs, Accounting and auditing, United Kingdom. National Health Service

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