Characteristics of Non-Budget Firms: Strategy, Environment, Planning, Firm Performance Evaluations and Management Incentive Rewards

Abstract

The topic of non-budget firms is currently of interest because of many factors including cost, morale, and functionality. Using survey findings, this study adds to that body of knowledge by exploring characteristics of firms that do not use budgets. The results from this study suggest that no-budget firms continue to plan and monitor the performance of the company through other means. Key success factors are often used to evaluate firm outcomes and to reward managers, where these factors are generally linked to the firm's strategy. The majority of the firms from this survey focus on cash flow and short-term finances as a means to plan. The primary key success factors for measuring firm performance are based on earnings and revenue. The same holds for creating links between performance and efforts as a vehicle for rewarding management. Further, whether a firm faces a stable or turbulent environment is irrelevant with respect to the choice of key success factors.

Citation

Onaitis, S. and Shastri, K. (2012), "Characteristics of Non-Budget Firms: Strategy, Environment, Planning, Firm Performance Evaluations and Management Incentive Rewards", Epstein, M.J. and Lee, J.Y. (Ed.) Advances in Management Accounting (Advances in Management Accounting, Vol. 21), Emerald Group Publishing Limited, Leeds, pp. 207-231. https://doi.org/10.1108/S1474-7871(2012)0000021014