Budgetary Systems in Organizations

Description

The success or failure of any budgetary system depends to a large extent on the management assumptions of human nature (views), work culture, employees’ behaviour and level of commitment towards productivity. Available accounting literature and empirical studies have created the typology of budgetary systems in organizations. These are the autocratic (non-humanistic) and the participatory (humanistic) budgetary systems. An autocratic budgetary system is synonymous with employees negative reactions which include counterproductive and antisocial work behaviours, and the illicit or deviant attitudes which are inimical to company’s success. On the other pedal of the budgetary system is the participatory budgetary system identified with employees’ positive reactions and which is embedded in productive and social work behaviours. While admitting the proposition that certain settings may require the operation of autocratic budgetary system, this work holds that the need for involvement and not the least the participation of all levels of an organization in budgetary process in viewed as a vital feature of modern budgetary systems.