"Continuous" Budgeting: 'Practicing' Multiple Approaches to Management Control

Increasingly organizations have to operate in environments which are characterised by intense competition, rapid rates of technical change, ever shorter product life cycles and increased market volatility. While much of the literature has discussed how such conditions require organizations to place greater emphasis on flexibility and willingness to adapt, little attention has been given to the simultaneous need for organizations to exercise ‘tight’ cost control if they are to survive. Budgeting is at the centre of these seemingly contradictory imperatives. While the traditional use of budgeting is widely seen as somewhat incompatible with many of the ‘new’ management practices that have emerged in response to the greater uncertainties that now confront organizations, budgeting practices nevertheless continue to be regarded as an organizational imperative if costs are to be controlled and predicted financial performance achieved. Drawing on case study evidence, we explore how one organization has sought to contain these tensions by embedding its budgeting practices within a wider single management control process with the objective of mobilising sufficient discipline to ensure financial targets are met yet remaining flexible enough to absorb the impact of the uncertainties inherent in competitive environments. The analysis focuses on understanding the dynamics of combining different uses of budgeting with a variety of other controls within this single framework. In particular, we draw attention to the processes of what we call "continuous" budgeting, and how that is sustained.