Contingent factors affecting budget system usefulness: an information processing perspective

An examination of the management accounting systems literature revealed the need for additional research based on a contingency perspective. Specifically, additional empirical research based on a well-articulated theory. A theoretical model was developed building on Galbraith’s theory of organization structure. Two sources of uncertainty -- environmental uncertainty and task uncertainty -- were viewed as forming the information processing requirements faced by the organization. In response to these requirements, organizations were viewed as adapting by altering their level of decentralization and their use of budget systems. Organizational effectiveness was achieved by a proper fit between the uncertainty faced by the organization and these responses. Data were collected from business unit managers using a survey instrument. A total of 103 usable responses were obtained with an overall response rate of 49%. Previously developed measures were used for all variables except for budget system usefulness. A measure for this variable was developed and validated. The data were examined using path analysis. The data did not support the model. Problems encountered in the use of perceptual measures for the uncertainty variables appeared to be the most likely explanation for the weak results. However, when the data was split based on the performance measure an interesting result was observed. Specifically, the relationships between the uncertainty measures, decentralization, and budget system usefulness were different for the low and high-performance group. An explanation for this tinding was offered.

Name thesis:degree_name

Ph. D.

Level thesis:degree_level

doctoral

Discipline thesis:degree_discipline

Business Administration

Department dc:contributor.department

Business Administration

Grantor dc:publisher

Virginia Polytechnic Institute and State University

Year dc:date.issued

1989

Author dc:creator

• Cathey, Jack M.

Chair dc:contributor.committeechair

• Leininger, Wayne E.

Committee members dc:contributor.committeemember

• Bonham, Thirwall W.
• Killough, Larry N.
• Sopariwala, Parvez R.
• Wolfle, Lee M.

Statement dc:rights

• In Copyright

Licence dc:rights.uri

• http://rightsstatements.org/vocab/InC/1.0/

Language dc:language.iso

en_US

Handle dc:identifier.uri

http://hdl.handle.net/10919/54503

OAI identifier oai:identifier

oai:vtechworks.lib.vt.edu:10919/54503