Beyond Budgeting – A Fair Alternative for Management Control? - Examining the Relationships between Beyond Budgeting and Organizational Justice Perceptions

Schmitz Sven Olaf 1 , Michniuk Agnieszka 2 ,  and Heupel Thomas 3
  • 1 UCAM Universidad Católica San Antonio de Murcia, , Spain
  • 2 UCAM Universidad Católica San Antonio de Murcia, , Spain
  • 3 FOM University of Applied Sciences, , Germany

Abstract

Since the seminal work of Chris Argyris research has realized that the design of Management Control Systems (MCS) has a significant impact on the social framework of an organization. This influence has been discussed in literature for decades. But there has been no holistic alternative for budget related MCS until the development of Beyond Budgeting (BB). Even though BB proponents claim that BB empowers organizations to become more adaptable, efficient and fair and is able to reduce unethical behaviors, BB has not been adopted by a considerable amount of organizations. One reason for this conservative attitude of organizations might be the lack of a framework that makes it possible to assess the possible advantages of BB for a specific organization. Current research suggests evaluating MCS in terms of their impact on organizational justice perceptions. Building on these new empirical findings, our paper tries to contribute to a better understanding of the potential advantages and disadvantages of BB by assessing the impact of BB characteristics on organizational justice perceptions. After identifying BB core characteristics, these characteristics are assessed regarding their impact on organizational justice perceptions. Partial least squares regression is applied to evaluate the relationship between BB core characteristics and organizational justice perceptions. Our results suggest that applying BB might enhance informational and interpersonal justice perceptions and therefore be beneficial for knowledge-based organizations.

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