Managers, budgets and organisational change: unbundling some of the paradoxes

Abstract

The interplay between accounting and organisational change has been a topic of considerable interest in recent years. This paper is concerned with exploring the ways in which managers’ attitudes towards budgets may be influenced by processes of organisational change. Traditionally a high reliance on accounting measures of performance has generally been associated with provoking unfavourable reactions from managers on account of the pressure they experience to meet pre‐determined budgetary targets, with concomitant dysfunctional consequences for the achievement of organisational objectives. In contrast the paper argues that processes of organisational change, particularly the increasing use of “stretch” targets and empowerment strategies, may be prompting a more positive disposition towards budgets amongst managers. Drawing on recent research evidence, and building on notions of “psychological empowerment”, the paper suggests that managers may value the existence of pre‐determined budgetary targets as an “empowerment facilitator” in conditions of uncertainty. This possibility opens up new directions in behavioural accounting research.

Citation

Marginson, D. and Ogden, S. (2005), "Managers, budgets and organisational change: unbundling some of the paradoxes", Journal of Accounting & Organizational Change, Vol. 1 No. 1, pp. 45-61. https://doi.org/10.1108/18325910510635281