Better budgeting methods

: a comparative effect analysis on traditional budgeting problems

Abstract

In today´s business environment, companies are forced to constantly adapt to ever changing internal and external influences. Yet, the traditional budgeting process with its inherent flaws has remained relatively stable for decades. In order to stay competitive, companies need to improve their budgeting process by implementing Better Budgeting methods. The aim of this research was to develop a framework that helps companies to identify their budgeting problems and address them more efficiently with fitting Better Budgeting methods. Through a detailed literature review, a comprehensive list of budgeting problems was developed and explained, which can act as a checklist for companies to evaluate which problems they are facing. In addition, a theoretical framework was developed that matches Better Budgeting methods and the respective traditional budgeting problems they are able to solve/decrease. A survey that tested the framework with actual organizations was used to validate the theoretical results. The results proved a strong correlation between the implementation of certain Better Budgeting methods and the reduction of certain traditional budgeting problems and therefore supported the managerial and academic value of the developed framework; however additional layers, such as company size, industry, or quality of method implementation need to be evaluated in order to increase precision of the framework.

Date of Award	2 Nov 2015
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Paulo Pardal (Supervisor) & Thomas Tapp (Co-Supervisor)