The Effects of Uncertainty on the Roles of Controllers and Budgets: An Exploratory Study

Accounting and Business Research, Forthcoming

45 Pages Posted: 18 Jun 2011 Last revised: 5 Aug 2013

See all articles by Frank G. H. Hartmann

Frank G. H. Hartmann

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM); Radboud University Nijmegen

Victor S. Maas

University of Amsterdam - Amsterdam Business School

Date Written: June 15, 2011

Abstract

This paper explores how contextual uncertainty and the use of the budgetary system explain cross-sectional variation in the organisational role of business unit controllers. We argue that there are complementarities between the role of the budgetary control system (i.e. coercive versus enabling) and the role of the controller (i.e. corporate policeman versus business partner). Thus, we explore both the direct effect of uncertainty on the role of the controller and the indirect effect through the role of the budgetary control system. Using survey data from 134 business unit controllers, we find that uncertainty provides a partial explanation of the variation in the role of budgetary control systems and in the role of controllers. In particular, our data suggest alignment between the coercive (enabling) use of the budgetary control system and the role of controllers acting as corporate policemen (business partners). These findings add to our understanding of the functioning of business unit controllers within their organisational context.

Keywords: Budgeting, Controllers, Management accounting, Uncertainty

Suggested Citation

Hartmann, Frank G. H. and Hartmann, Frank G. H. and Maas, Victor S., The Effects of Uncertainty on the Roles of Controllers and Budgets: An Exploratory Study (June 15, 2011). Accounting and Business Research, Forthcoming, Available at SSRN: https://ssrn.com/abstract=1611629

Frank G. H. Hartmann

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM) ( email )

P.O. Box 1738
Room T08-21
3000 DR Rotterdam, 3000 DR
Netherlands

Radboud University Nijmegen ( email )

Postbus 9108
Nijmegen, 6500 HK
Netherlands

Victor S. Maas (Contact Author)

University of Amsterdam - Amsterdam Business School ( email )

Spui 21
Amsterdam, 1018 WB
Netherlands

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