From budgeting to rolling forecasting: achieving goals for rolling forecasting implementation: case study evidence from production and retail industry
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School of Business |
Master's thesis
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Authors
Date
2017
Department
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Mcode
Degree programme
Accounting
Language
en
Pages
92
Series
Abstract
The objective of this thesis was to shed light on contemporary forecasting and non-budgeting practices, and to study achieving the goals set for rolling forecasting implementation. This study had two research questions, first of them being: What were the reasons for implementing rolling forecasting, and how is it functioning in the case company when compared to the pre-implementation goals set? The second research question, assessing the broader context of management controls, was: Whether and how is rolling forecasting functioning as a substitute or a complement for previously applied traditional budgeting as a management control tool? The study was qualitative in nature. It applied a single-case method to study the forecasting and non-budgeting practices in the case company. The study and post-project review was conducted in a large Finnish company operating in production and retail business. The case company had abandoned traditional budgeting in 2014 and simultaneously taken rolling forecasting to use. The data for the study was gathered from 11 semi-structured interviews with employees from different organizational levels in the Control function of the case company and from additional, internal material received from the case company. The findings of the study suggested that the goals set for rolling forecasting before its implementation can be successfully achieved by rejecting budgeting, separating target setting and forecasting, and clarifying accountabilities in forecasting chain. However, implementation of substitutive tools for previously used budgeting functions may be challenging and require tailored solutions for culturally different parts of organization. Secondly, the study indicated that rolling forecasting and budgeting were rather used as substitutes than complements as management control tools due to restricted amount of resources in use. Additionally, the study supported the existing findings of reasons for implementing rolling forecasting and abandoning budgeting.Description
Thesis advisor
Huikku, JariKeywords
management control, budgeting, non-budgeting, rolling forecasting, beyond budgeting, achieving goals for rolling forecasting