Perceived Usefulness of Fixed and Flexible Budgets: The Impact of Uncertainty and Strategy

  • Wallin, Jan (Project manager, academic)
  • Ekholm, Bo-Göran (Project participant)

Project: Externally funded project

Project Details


Concerns have been expressed that, under conditions of uncertainty, fixed, annual budgets are dysfunctional management instruments. Empirical research has, however, produced conflicting results concerning this issue. The results of the present study indicate that environmental uncertainty is positively associated with the perceived usefulness of fixed, annual budgets and negatively associated the perceived usefulness of flexible budgets. The study also finds strong evidence to the effect that strategic positioning based primarily on good customer relations is positively associated with appreciation of both fixed and flexible budgets. Regardless of the degree of environmental uncertainty and strategic positioning, there is also evidence of a strong association between the perceived usefulness of fixed budgets and flexible budgets, suggesting that hybrid models are widely perceived as useful.
Effective start/end date01.10.200631.12.2007


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