The effects of interaction between the management tools of BB and ABC/M
Authors
Jørmundsson, Magnus ; Hasiyanova, Gloria Aleksandrova
Term
4. term
Publication year
2019
Submitted on
2019-06-06
Pages
139
Abstract
This master’s thesis addresses a research gap on how Beyond Budgeting (BB) and Activity-Based Costing/Management (ABC/M) interact. It starts from the premise that BB, as a management philosophy, and ABC/M, as a control tool, are more likely to complement than substitute one another, and aims to examine theoretically whether and how ABC/M can supplement BB and what the consequences of such interplay might be. Working within a functionalist paradigm and using a Contingency Theory perspective, the thesis explains and critiques both approaches, conducts a comparative analysis to identify implementation factors in a management control system, assesses their potential complementarity, and concludes with an illustrative case of Svenska Handelsbanken, a BB pioneer. The analyses indicate more positive than negative effects of combining BB and ABC/M: the models complement each other in theory, and organizations already using BB may particularly benefit from adopting ABC/M. Decentralized structures and cultures characterized by open communication, ambition, and freedom with accountability appear favorable. The study also highlights the need for further empirical research across different usage contexts and observes that full BB implementation is rare; many organizations mix elements of traditional budgeting and BB, suggesting the perceived polarization may be overstated and that selected elements from both can enrich financial planning.
Denne kandidatafhandling adresserer et forskningshul om samspillet mellem Beyond Budgeting (BB) og Activity-Based Costing/Management (ABC/M). Afhandlingen bygger på antagelsen om, at BB som ledelsesfilosofi og ABC/M som styringsværktøj i højere grad kan supplere end erstatte hinanden, og har til formål teoretisk at undersøge, om og hvordan ABC/M kan supplere BB, samt hvilke konsekvenser et sådant samspil kan have. Inden for det funktionalistiske paradigme og med Contingency Theory som ramme forklares og kritiseres begge tilgange, efterfulgt af en komparativ analyse af implementeringsfaktorer i en økonomistyringspakke (Management Control System), en komplementaritetsanalyse af deres samtidige anvendelse og en illustrativ case om Svenska Handelsbanken som BB-pioner. Analysen peger på flere positive end negative effekter ved at kombinere BB og ABC/M: modellerne supplerer hinanden teoretisk, og især organisationer, der allerede anvender BB, kan drage nytte af at indføre ABC/M. Decentraliserede strukturer og en kultur præget af åben kommunikation, ambition og frihed under ansvar fremhæves som gunstige betingelser. Samtidig identificeres behov for mere empirisk forskning i virksomheder med forskellige grader af anvendelse, og det konstateres, at fuld BB-implementering er sjælden, idet mange organisationer kombinerer elementer fra traditionel budgettering og BB—hvilket antyder, at polariseringen mellem tilgange kan være for skarp, og at udvalgte elementer fra begge kan styrke økonomisk planlægning.
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