Alternative reasons to budget, firm and budgetary characteristics, and firm performance

This study theoretically develops the exploratory findings from Hansen and Van derStede (2004), regarding alternative reasons to budget (RtB) in firms. Fouroperational RtB?s are proposed, which are developed from the two operational RtB?sused by Hansen and Van der Stede (2004). Using a similar theoretical framework tothat used in their study, propositions are developed and tested between firmcharacteristics, RtB importance, budgetary characteristics, RtB benefits and firmperformance. The four RtB?s are shown to relate differently to firm and budgetarycharacteristics. Also, by adopting a more robust path analysis model using PartialLeast Squares (PLS) regression and considering budgetary characteristics asintervening and not additive variables, results consistent with and counter to thatexpressed in prior budget research are found. These findings emphasise theimportance of studying alternative RtB?s collectively. They also pose interestingquestions for future research to address when considering the relevance of firm andbudgetary characteristics to the importance and benefits from alternative RtB?s.