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    Beyond Budgeting: Distinguishing Modes of Adaptive Performance Management (2017)

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    Type of Content
    Journal Article
    UC Permalink
    https://hdl.handle.net/10092/103617
    
    Publisher's DOI/URI
    http://doi.org/10.1108/s1474-787120170000029003
    
    Publisher
    Emerald Publishing Limited
    Collections
    • Business: Journal Articles [316]
    Authors
    O’Grady W
    Scott I
    Akroyd, Chris cc
    show all
    Abstract

    Purpose – The purpose of this paper is to analyze the changes organizations can adopt to move beyond budgeting. We show how these changes can be understood as modes of adaptive performance management which explain the ways in which organizations move beyond budgeting to become more adaptive. The proposed modes are then used to derive propositions for future research. Methodology/approach – We follow a conceptual approach through an analysis of the beyond budgeting principles using the management and systems literatures on radical decentralization. We theorize how organizations can enhance their adaptability to environmental uncertainty through changes to their management structure and control processes. Findings – We show that organizations can move beyond budgeting by decentralizing within or beyond their management structure and modifying or removing their budget-based control processes. We propose that beyond budgeting can be conceptualized as four modes of adaptive performance management: better budgeting, advanced budgeting, restricted budgeting and non-budgeting. Research limitations/implications – The four modes of adaptive performance management can be used in future research to consider how changes to management structures and budget-based control processes can enhance the organizational adaptability needed to manage environmental uncertainty. Practical implications – We show that while the non-budgeting mode may be most suited to organizations facing high levels of environmental uncertainty, organizations facing low to moderate levels of environmental uncertainty can achieve sufficient levels of adaptability with less extensive changes to management structure and budget-based control processes. Originality/value – The four modes of adaptive performance management reflect different approaches for dealing with environmental uncertainty. Positioning non-budgeting as one mode, and identifying alternate modes of adaptive performance management, provides a basis for comparing and understanding the changes organizations make to move beyond budgeting.

    Citation
    O’Grady W,Akroyd C,Scott I (2017). Beyond Budgeting: Distinguishing Modes of Adaptive Performance Management. In Advances in Management Accounting.: 33-53. Emerald Publishing Limited.
    This citation is automatically generated and may be unreliable. Use as a guide only.
    Keywords
    Adaptive performance management; beyond budgeting; management structure; radical decentralization; adaptive control processes
    ANZSRC Fields of Research
    35 - Commerce, management, tourism and services::3501 - Accounting, auditing and accountability::350105 - Management accounting
    35 - Commerce, management, tourism and services::3507 - Strategy, management and organisational behaviour::350711 - Organisational planning and management
    Rights
    All rights reserved unless otherwise stated
    http://hdl.handle.net/10092/17651

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