Flexible Budgeting under Uncertainty: A Real Options Perspective

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dc.contributor Svenska handelshögskolan, institutionen för redovisning och handelsrätt, redovisning sv
dc.contributor Hanken School of Economics, Department of Accounting and Commercial Law, Accounting en
dc.contributor.author Ekholm, Bo-Göran
dc.contributor.author Wallin, Jan
dc.date.accessioned 2011-03-02T13:54:43Z
dc.date.available 2011-03-02T13:54:43Z
dc.date.issued 2006-11-09
dc.identifier.isbn 951-555-930-8
dc.identifier.issn 0357-4598
dc.identifier.uri http://hdl.handle.net/10227/74
dc.identifier.uri URN:ISBN:951-555-930-8
dc.description.abstract This paper examines the relationships between uncertainty and the perceived usefulness of traditional annual budgets versus flexible budgets in 95 Swedish companies. We form hypotheses that the perceived usefulness of the annual budgets as well as the attitudes to more flexible budget alternatives are influenced by the uncertainty that the companies face. Our study distinguishes between two separate kinds of uncertainty: exogenous stochastic uncertainty (deriving from the firm’s environment) and endogenous deterministic uncertainty (caused by the strategic choices made by the firm itself). Based on a structural equations modelling analysis of data from a mail survey we found that the more accentuated exogenous uncertainty a company faces, the more accentuated is the expected trend towards flexibility in the budget system, and vice versa; the more endogenous uncertainty they face, the more negative are their attitudes towards budget flexibility. We also found that these relationships were not present with regard to the attitudes towards the usefulness of the annual budget. Noteworthy is, however, that there was a significant negative relationship between the perceived usefulness of the annual budget and budget flexibility. Thus, our results seem to indicate that the degree of flexibility in the budget system is influenced by both general attitudes towards the usefulness of traditional budgets and by the actual degree of exogenous uncertainty a company faces and by the strategy that it executes. fi
dc.format.extent 242757 bytes
dc.format.mimetype application/pdf
dc.language.iso en
dc.publisher Svenska handelshögskolan sv
dc.publisher Swedish School of Economics and Business Administration en
dc.relation.ispartofseries Working Papers
dc.relation.ispartofseries 520
dc.rights Publikationen är skyddad av upphovsrätten. Den får läsas och skrivas ut för personligt bruk. Användning i kommersiellt syfte är förbjuden. sv
dc.rights This publication is copyrighted. You may download, display and print it for Your own personal use. Commercial use is prohibited. en
dc.rights Julkaisu on tekijänoikeussäännösten alainen. Teosta voi lukea ja tulostaa henkilökohtaista käyttöä varten. Käyttö kaupallisiin tarkoituksiin on kielletty. fi
dc.subject budget criticism fi
dc.subject flexible budgets fi
dc.subject uncertainty fi
dc.subject real options reasoning fi
dc.subject structural equations modelling fi
dc.subject.other Accounting fi
dc.title Flexible Budgeting under Uncertainty: A Real Options Perspective fi
dc.type.dcmitype Text

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