Adaptive Performance Management Models: Insights From Beyond Budgeting

Accounting

Speaker:Winnie O’Grady, University of Auckland
Date: Wednesday 14 September 2016
Time: 14:30 - 16:00
Location: Kolade Teaching Room, Building One

Further details

Abstract

Purpose – This paper seeks to reorient discussions of beyond budgeting to focus on the adaptive performance management model inherent in its leadership and process principles. By doing this we aim to clarify the relationship between beyond budgeting leadership
principles and adaptive performance management models and to propose how different approaches to enhancing organisational adaptiveness can be distinguished.

Methodology/approach – We adopt an analytical approach, synthesizing insights from the beyond budgeting principles and the management literature on radical decentralization, to theorize how organizations enhance their adaptability through changes to structure and processes. We propose a typology to distinguish different approaches.

Findings – We find that organizations can enhance their adaptability by changing two organizational dimensions –management structure and control processes. Organizations can decentralize within or beyond management structure and modify or remove budget-based
control processes. Varying levels of adaptability are produced by different combinations of changes along these dimensions and are suitable for different levels of environmental uncertainty.

Research limitations/implications – These finding suggest future studies of beyond budgeting need to identify the structural changes that accompany beyond budgeting process changes.

Practical implications – Organizations should identify the level of adaptability they require to manage their environmental uncertainty then adjust their structure and/or processes as required to deliver performance. We contribute to practice in this area by extending our
understanding of the impact of structure on the implementation of the beyond budgeting process principles.

Originality/value – We propose a typology of beyond budgeting approaches which will help academics and practitioners better distinguish adaptive performance management approaches.

Keywords: Performance management, beyond budgeting, organization structure, radical decentralization, control processes