Budget effectiveness in multinational companies: a systems-fit approach
2008 (English)In: Journal for Global Business Advancement, ISSN 1746-966X, Vol. 1, no 2/3, 204-224 p.Article in journal (Refereed) Published
Budget effectiveness in multinational companies receives research interest because of globalisation. Research to date has used contingency-theory methods which have limitations. A systems-fit approach, which views organisations and systems holistically, is a complementary alternative. Compared with reductionistic contingency framework methods using regression analysis, it emphasises holistic methods related to effectiveness and deals with the inherent complexity of multinationals. This study examines the effectiveness of budget control systems in a Finnish multinational company using the systems approach. The tests examined the correlation of the fit of different profiles with effectiveness of the budget control system for both domestic and foreign subunits under conditions of high and low environmental uncertainty. No significant difference between domestic and foreign subunits is detected. Reliance on budget control is not inherently dysfunctional. The study demonstrates the viability of the systems-fit research approach.
Place, publisher, year, edition, pages
Geneve: Inderscience Publishers , 2008. Vol. 1, no 2/3, 204-224 p.
budget control, globalisation, multinational corporations, MNCs, systems-fit approach, budget effectiveness, Finland
Economics and Business
IdentifiersURN: urn:nbn:se:umu:diva-10718DOI: 10.1504/JGBA.2008.018381OAI: oai:DiVA.org:umu-10718DiVA: diva2:150389