Search

Purpose: This study delves into the inadequacies of the traditional budgeting process and their role in instigating budgetary slacking behaviour within organisations. It aims to unveil the underlying mechanisms behind this behaviour and provides practical insights for organisational enhancement. Design/methodology/approach: Grounded in the theory of planned behaviour, this research scrutinises the impact of attitudes, subjective norms (SN) and perceived behavioural control (PBC) on intentions related to budgetary slacking. The study employs a mixed-method approach involving literature review, case studies and surveys across various individuals in different organisations. Findings/results: Attitudes significantly mould budgetary slacking behaviour, underscoring the importance of positive perceptions concerning the strategic value of budgeting. Subjective norms assume a pivotal role, emphasising the need to align societal pressures with objectives related to value creation. Perceived behavioural control emerges as a critical factor, highlighting the significance of autonomy and authority in decision-making. This research reinforces the shift towards agile and responsive budgeting approaches as a countermeasure to budgetary slacking. Practical Implications: Organisations can address the flaws inherent in traditional budgeting by cultivating positive attitudes, realigning SNs and endowing practitioners with greater perceived control. This cultural shift enhances financial stability, resource allocation and strategic decision-making. Originality/Value: This study contributes to comprehending the behavioural aspects of budgetary slacking and its repercussions on organisational performance. It advocates for a transformative shift towards agile, adaptive and value-oriented budgeting, benefiting managers, policymakers and researchers aiming to refine budgeting processes.

Background: Traditional budgeting has faced criticism, leading researchers to explore alternative management control methods such as Beyond Budgeting. Despite its potential benefits, Beyond Budgeting adoption remains limited. Aim: This research investigates Beyond Budgeting’s effect on Iraqi small- and medium-sized enterprise (SME) performance, focusing on competitive advantage. Setting: The study targets Iraqi SMEs, considering their diverse business landscape. A random sample of 353 accountants was chosen from a research community of 22 974 individuals. SPSS and AMOS 26 software and a custom questionnaire were used. Method: The authors conducted multiple linear regression analysis and Structural Equation Modeling to address our study’s objectives. Additionally, we utilised maximum likelihood procedures to assess factor loadings, construct validity and reliability. Results: Beyond Budgeting implementation significantly affected both financial and nonfinancial performance. It demonstrated positive effects on cost leadership and competitive advantage differentiation. However, an indirect negative impact on nonfinancial performance was observed through the influence on cost leadership, suggesting a trade-off between cost reduction and other nonfinancial factors. Conclusion: The study acknowledges limitations in sample size and the need for considering additional factors. Further research is required to understand Beyond Budgeting’s limited adoption in Iraq. The study contributes valuable insights on Beyond Budgeting as a substitute for traditional approaches, benefiting managers and policymakers. Contribution: This study emphasises Beyond Budgeting’s significant impact on Iraqi SME performance, highlighting the relationship between Beyond Budgeting, competitive advantage strategies, financial and nonfinancial performance. The findings provide insights for enhancing budgeting practices in Iraqi SMEs.