Diagnostic and interactive uses of budgets and the moderating effect of strategic uncertainty / Sabrina Shi Qiong Shen and Sujatha Perera

Shi, Sabrina Qiong Shen and Perera, Sujatha (2012) Diagnostic and interactive uses of budgets and the moderating effect of strategic uncertainty / Sabrina Shi Qiong Shen and Sujatha Perera. Asia-Pacific Management Accounting Journal, 7 (2). pp. 127-154. ISSN 1675-3194

Abstract

The existing literature suggests that under certain environmental conditions control systems such as budgets can be effective only if they are used interactively. However, empirical evidence to support such a proposition is scant. This study examines the moderating effect of strategic uncertainty on the effectiveness of budgets when used as (a) a diagnostic control system; and (b) an interactive control system. In examining these relationships, the intervening role of individual motivation is also considered. Findings based on the data gathered from a questionnaire survey of large and medium size public sector organisations in Australia confirm that while diagnostic use of budgets is more effective in motivating individual performance under low strategic uncertainty, interactive use of budgets is more effective when strategic uncertainty is high. This study contributes to both the theory and practice.

Metadata

Item Type: Article
Creators:
Creators
Email / ID Num.
Shi, Sabrina Qiong Shen
UNSPECIFIED
Perera, Sujatha
UNSPECIFIED
Subjects: H Social Sciences > HD Industries. Land use. Labor > Management. Industrial Management > Planning. Business planning. Strategic planning
H Social Sciences > HD Industries. Land use. Labor > Management. Industrial Management > Costs. Industrial costs
H Social Sciences > HD Industries. Land use. Labor > Management. Industrial Management > Cost effectiveness
Divisions: Universiti Teknologi MARA, Shah Alam > Faculty of Accountancy
Journal or Publication Title: Asia-Pacific Management Accounting Journal
UiTM Journal Collections: UiTM Journal > Asia-Pacific Management Accounting Journal (APMAJ)
ISSN: 1675-3194
Volume: 7
Number: 2
Page Range: pp. 127-154
Keywords: Budgets, diagnostic and interactive uses, diagnostic control systems, interactive control systems, moderating effect, strategic uncertainty
Date: December 2012
URI: https://ir.uitm.edu.my/id/eprint/10820
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10820

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