Corporate Budgets and their Limitations: a Case Study of Meat and Poultry Producers
At an enterprise, numerous functions are attributed to the budget and therefore for years now it has been the cornerstone of each and every organisation. However, in the last few years budgeting has attracted increasingly more criticism. Some scientists argue that budget-related problems arise because the budgets are used improperly, while others maintain that budgeting as such contains deficiencies.
Results of scientific research have been self-contradictory. Although budgeting is widely criticised by scientists, most enterprises do use it and are happy with it. Meanwhile in Lithuania only one of the key budgeting weaknesses has been analysed, i.e. inflexibility. Therefore, this study seeks to look into the prevalent types of budgets in Lithuanian organisations and what budget limitations the com-panies refer to. In order to achieve this objective, the employed methods include analysis and synthesis of scientific literature, induction, deduction, and comparison. The data received during the empirical research were processed using econometric methods.
The results of the study show that budgeting is practised only by a small proportion of organisations. Small businesses find budget-ing too expensive and not that important. Even though most organisations do not practice budgeting, all businesses believe that budget-ing is beneficial for the enterprise. In the opinion of the companies that establish their budgets, the budgeting limitations conform to those discussed in scientific literature.
Keyword(s): budget, budgeting, traditional budget
Arnold J., Turley S. (1996). Accounting for Management Decisions. Prentice Hall, London.
Bengu H. (2010). The Role of Activity Based Budgeting on Target Costing Practices. The Journal of Faculty of Eco-nomics and Administrative Sciences 15, pp. 213–233.
Blumentritt T. (2006). Integrating Strategic Management and Budgeting. Journal of Business Strategy 27, pp. 73–79.
De With A., Dijkman A. (2008). Budgeting Practices of Listed Companies in the Netherlands. Management Ac-counting Quarterly Fall 10(1), pp. 26–36.
Ekholm B., Wallin J. (2000). Is the annual budget really dead? The European Accounting Review 9(4), pp. 519–539.
Ekholm B., Wallin J. (2011). The Impact of Uncertainty and Strategy on the Perceived Usefulness of Fixed and Flexible Budgets. Journal of Business Finance & Accounting 38, pp. 145–164.
Juozapaviciute A., Stonciuviene N. (2008). Lanksciuju samatu ir ju sudarymo problemu tyrimas (Flexible Budgets and Problems of their Preparation). Vadybos mokslas ir studijos: kaimo verslu ir ju infrastrukturos pletrai 13, pp. 77–84.
Frezatti F. (2004). Beyond Budgeting: any Chance for Man-agement Improvement? Brazilian Business Review 1(2), pp. 118–135.
Frow N., Marginson D., Ogden S. (2010). “Continuous” Budgeting: Reconciling Budget Flexibility with Budgetary Control. Accounting, Organization and Society 35, pp. 444–461.
Waal A., Hermkens-Janssen M., Ven A. (2011). The Evolu-tionary Adoption Framework: Explaining the Budgeting Paradox. Journal of Accounting & Organizational Change 7, pp. 316–336.
Kaplan R.S, Norton D. (2001). The Strategy – Focused Or-ganization. Harvard Business School Press, Cambridge, MA.
Hallinan E. (2006). Budgeting and Cost Control. Reeves Journal 2, pp. 24–26.
Hansen S.C., Otley D.T., Van der stede W.A. (2003). Prac-tice Developments in Budgeting: An Overview and Re-search Perspective. Journal of Management Accounting Re-search15, p. 95–116.
Hope J., Fraser R. (1999). Beyond Budgeting: Building a New Management Model for Information Age. Manage-ment Accounting 1, pp. 16–21.
Libby T., Lindsay R. M. (2003). Budgeting – an Unneces-sary Evil. CMA Management 4, pp. 28–31.
Libby T., Lindsay R. M. (2007). Beyond Budgeting or Bet-ter Budgeting. Strategic Finance 8.
Libby T., Lindsay R. M. (2010). Beyond Budgeting or Budgeting Reconsidered? A Survey of North – American Budgeting Practice. Management Accounting Research 21, pp. 56–75.
Mak Y.T., Roush M. L. (1996). Flexible Budgeting and Variance Analysis in an Activity – Based Costing Environ-ment. Accounting Horizons 8(2), pp. 141–146.
Max M. (2005). Beyond Budgeting: Case Studies in North American Financial Services. Journal of Performance Management 18, pp. 3–15.
Nelly A., Bourne M., Adams CH. (2003). Better budgeting or beyond budgeting. Measuring Business Excellence 7.
Orlando J. (2009). Turning Budgeting Pain into Budgeting Gain. Strategic Finance 3, pp. 47–51.
Stevens M. E. (2004). Activity-based Planning and Budgeting: The Coming of Age of the “Consumption-based” Approach. Journal of Corporate Accounting & Finance 15, pp. 5–28.
Taylor A. (2009). How strategic Budgeting Can Control Cost While Improving Performance. Journal of Corporate Accounting & Finance 20, pp. 53–58.
Uyar A. (2009). An Evaluation of Budgeting Approaches: Traditional Budgeting, Better Budgeting and Beyond Budg-eting. Journal of Academic Studies 11, pp. 113–130.
Tidikis R. (2003). Socialiniu mokslu tyrimu metodologija (Social Sciences Research Methodology). Lietuvos teises universiteto leidykla, Vilnius.
Visa Lietuva (2012). Available at http://www.visalietuva.lt/imones/rubrika/mesa-ir-jos-gaminiai?re=&di=
Rudzeikiene V. (2005). Socialine statistika (Social Statistics). MRU leidykla, Vilnius.
Leonaviciene T. (2007). SPSS programu paketo taikymas statistiniuose tyrimuose (Use of SPSS Software in Statisti-cal Researches). VPU leidykla, Vilnius.
Pukenas K. (2009). Kokybiniu duomenu analize SPSS programa (Qualitative Data Analysis with SPSS Software). LKKA leidykla, Kaunas.
Cekanavicius V., Murauskas G. (2004). Statistika ir jos taikymai II (Statistics and Its Use II). TEV, Vilnius.
- There are currently no refbacks.
Economics and Rural Development ISSN 1822-3346 / eISSN 2345-0347
This journal is published under the terms of the Creative Commons Attribution-Noncommercial 3.0 Unported License. Responsible editors: Prof. Dr Vilija Alekneviciene, Dr Gunita Mazure.