The relationship between budgetary evaluation, firm size and performance
Abstract
Purpose
The purpose of this paper is to present the main results of the first empirical study done in Morocco and attempts to highlight the impact of the firm size on the budgetary evaluation and its performance according to the firm size.
Design/methodology/approach
Data were collected using a questionnaire sent to the Moroccan firms. A total of 62 questionnaires were correctly returned. The response rate was 15 per cent.
Findings
In this research, we identified three principal styles of budgetary evaluation: “strict budgetary evaluation” adopted by 21 per cent of the sample; “moderate budgetary evaluation” adopted by 27.4 per cent of the surveyed enterprises; and “lower budgetary evaluation” adopted by 51.6 per cent of the sample. The first style is adopted especially by large firms. The firm’s performance is significantly and positively correlated with the budgetary evaluation in large enterprises. This correlation is not significant in SMEs.
Practical implications
The findings of this research can help managers of companies in emerging economies in the choice of a better budgetary evaluation system.
Originality/value
The outcomes of the study are relevant both to the literature on budgetary evaluation in particular and on management control in general, since they determine that the correct fit between budgetary evaluation and firm size causes a positive and significant change in the firm’s performance.
Keywords
Acknowledgements
The author would like to thank the two anonymous reviewers for their valuable and constructive comments and their suggestions to improve the quality of this paper.
Citation
Elhamma, A. (2015), "The relationship between budgetary evaluation, firm size and performance", Journal of Management Development, Vol. 34 No. 8, pp. 973-986. https://doi.org/10.1108/JMD-06-2014-0053
Publisher
:Emerald Group Publishing Limited
Copyright © 2015, Emerald Group Publishing Limited