Improved budget attainment in organisations: a holistic approach

A budget is a broad financial plan setting forth the projected route to achieve the financial and operational goals of an organisation. Budgeting is an important step in effective financial planning. The use of a budgetassists managers in regulating costs by retaining actual costs in consistent with the financial plan. The management accounting literature supports participative budgeting as it provides the employees with a sense of belonging and improves the possibility that they will make larger efforts to attain the organisation's budgetary goals. This study identifies five key drivers that have an impact in achieving an effective budget attainment. The five drivers are: budgetary participation, employees’ organisational commitment, information sharing, unambiguous goal setting and reward and recognition. These drivers affect the budget goal commitment positively which in turn helps to ensure an effective budget attainment. Though different researchers used different theories to study the effective budget attainment, this study contemplates the Expectancy Theoryas the most suitable theory to learn the drivers of effective budget attainment in a better way. The research model has been framed based on the above drivers and Expectancy Theory. This model will be further improved and tested among the big marketing organisations in Malaysia. This study will contribute to the society through higher organisational achievements and higher profits being reported by the organisations.