Why is traditional budgeting still used and how can it affect strategy? -A Case Study

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bachelor_Lehtoaro_Nikke_2023.pdf (338.54 KB)

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School of Business | Bachelor's thesis
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Date

2023

Department

Laskentatoimen laitos

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Mcode

Degree programme

Laskentatoimi

Language

en

Pages

23

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Abstract

This thesis will study why traditional budgeting has not been phased out in some organizations and how can budgeting affect strategy. Traditional budgeting can be seen as having a key role in the strategy process (Asogwa & Etim, 2017). Due to critique the traditional budgeting method has received, alternative budgeting methods have emerged. These alternative methods have not been implemented in some organizations for various reasons (Heupel & Schimtz, 2015). Findings of this thesis highlight the reasoning in the use of traditional budgeting in a Finnish technology manufacturing company. The stiffness of the industry and requirements set by a parent company dictate what budgeting method the case company uses. In addition, findings show that budgeting is used to ensure financial goals align with long-term strategic goals. Additionally, budgeting can be used to adjust strategy when strategic objectives are not viable.

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Thesis advisor

Taussi, Thomas

Keywords

budgeting, traditional budgeting, beyond budgeting, strategy

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https://urn.fi/URN:NBN:fi:aalto-202310156316

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[kand] Kauppakorkeakoulu / BIZ (Open Access)