Traditional budgeting during financial crisis

Marie Anne Lorain, Aurora García Domonte and Francisco Sastre Peláez

Cuadernos de Gestión, 2015

Abstract: [EN] This study examines the evolution of budgeting practices in the extremely difficult Spanish economic environment. In order to analyse if companies are still maintaining their budgeting process and if, right now, they are facing more difficulties in forecasting accurate indicators, two similar web surveys were addressed over two periods of time, firstly in 2008 at the beginning of the financial crisis, and secondly in 2013 after five years of a downward trend. In addition, in-depth interviews were conducted to investigate how companies brought more flexibility to their budgeting process in order to cope with environmental uncertainty. The survey indicates that 97% of respondents are still using a traditional budgeting process being this result similar to the one found in 2008. However, 2013 showed that the reliance on forecasted information is being increasingly questioned. Furthermore the study revealed that the respondents are bringing more flexibility to their processes, being able to modify the objectives once the budget is approved and to obtain new resources outside the budgeting process. This paper contributes to revealing information about difficulties in setting reliable objectives in a turbulent environment and provides data about the evolution of budgeting practices over five years during an austere economic crisis.

Keywords: traditional budgeting; planning; uncertainty; management control; presupuesto tradicional; planificación; incertidumbre; control de gestión (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://addi.ehu.eus/handle/10810/15776 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ehu:cuader:15776

Ordering information: This journal article can be ordered from
Instituto de Economía Aplicada a la Empresa, Revista Cuadernos de Gestión, Facultad de CC. Económicas y Empresariales, Universidad del País Vasco, Avda. Lehendakari Aguirre 83, 48015 Bilbao, Spain
https://ojs.ehu.eus/index.php/CG

Access Statistics for this article

Cuadernos de Gestión is currently edited by Pilar Fernández

More articles in Cuadernos de Gestión from Universidad del País Vasco - Instituto de Economía Aplicada a la Empresa (IEAE) Instituto de Economía Aplicada a la Empresa Avda Lehendakari Aguirre 83 CP 48015 Bilbao (Vizcaya) Spain. Contact information at EDIRC.
Bibliographic data for series maintained by Alcira Macías Redondo ().