2021 Volume 29 Issue 1 Pages 71-90
The purpose of this study is to provide one explanation to the question, “Why is there a difference in the effectiveness of budgets across organizations despite they commonly use budgets for control.” This paper is unique in that it focuses on and conceptualizes the quality of control for achieving the budget, and then examines the process of its impact in detail. The results showed that high quality diagnostic use, which emphasizes support for behavioral choices, has a superior effect through the establishment of a high quality decision-making processes, whereas low quality diagnostic use, which forces effort and obedience, leads to various problematic behaviors. These results show that focusing on the qualitative aspects of the exercise of diagnostic control, rather than the exercise of diagnostic control itself, can explain the diversity of effects. In addition, it is shown that the establishment of a quality decision-making processes is essential to achieve superior effectiveness through budgetary control.
