A Collaborative Approach to Budgeting and the Impact on the Budgeting Process: A Case Study

A Collaborative Approach to Budgeting and the Impact on the Budgeting Process: A Case Study by Michael Van Roestel MBA, Our Lady of the Lake University, 2006 BA, Our Lady of the Lake University, 2004 Dissertation Submitted in Partial Fulfillment of the Requirements for the Degree of Doctor of Philosophy Management Walden University May 2016 Abstract Corporations budget and strategize to set targets for planning purposes. Review of the literature indicated that methods of budget creation, including input from operational employees, are not fully understood by corporate budget officers. The problem addressed in this study was whether a collaborative approach to budgeting would improve implementation of the Generally Accepted Accounting Principles of relevance and reliability within the budgeting process. The purpose of this qualitative study was to explore the benefits of a collaborative approach to budgeting since non-inclusive budget preparation could alienate members of the operations team. Participative leadership was the conceptual framework guiding this study and formulated the research questions, which focused on inclusion of operation. An intrinsic case study was conducted by interviewing 20 operational and finance professionals, from the metro Houston area with significant budget experience, in order to assess their paradigms on the benefits of a collaborative approach. The structured interviews included questions regarding the budget experience, how budget development can be improved, and how to incorporate greater participation in the budget. Pattern-matching was used to analyze the data. Operational employees’ business insight was identified as a strength, whereas the budget process needed improvement. These findings suggest that other, similar organizations that promote collaboration could have a more attainable and meaningful budget document. Financial analysts can use these data to influence social change by enhancing investor confidence, refining the use of business resources, and improving economic stability of organizations through enhanced financial variance analysis.Corporations budget and strategize to set targets for planning purposes. Review of the literature indicated that methods of budget creation, including input from operational employees, are not fully understood by corporate budget officers. The problem addressed in this study was whether a collaborative approach to budgeting would improve implementation of the Generally Accepted Accounting Principles of relevance and reliability within the budgeting process. The purpose of this qualitative study was to explore the benefits of a collaborative approach to budgeting since non-inclusive budget preparation could alienate members of the operations team. Participative leadership was the conceptual framework guiding this study and formulated the research questions, which focused on inclusion of operation. An intrinsic case study was conducted by interviewing 20 operational and finance professionals, from the metro Houston area with significant budget experience, in order to assess their paradigms on the benefits of a collaborative approach. The structured interviews included questions regarding the budget experience, how budget development can be improved, and how to incorporate greater participation in the budget. Pattern-matching was used to analyze the data. Operational employees’ business insight was identified as a strength, whereas the budget process needed improvement. These findings suggest that other, similar organizations that promote collaboration could have a more attainable and meaningful budget document. Financial analysts can use these data to influence social change by enhancing investor confidence, refining the use of business resources, and improving economic stability of organizations through enhanced financial variance analysis. A Collaborative Approach to Budgeting and the Impact on the Budgeting Process: A Case Study by Michael Van Roestel MBA, Our Lady of the Lake University, 2006 BA, Our Lady of the Lake University, 2004 Dissertation Submitted in Partial Fulfillment of the Requirements for the Degree of Doctor of Philosophy Management Walden University May 2016 Dedication To my parents, who have always supported me through my journey, no matter where it has gone. Acknowledgments Thanks to Dr. Annette Hebble who supported me throughout the KAM process at Walden. Thanks also to Dr. Diane Stottlemyer, Dr. Mohammed Sharifzadeh, Dr. William Brent, and Dr. Mary Dereshiwsky for their support, comments, and feedback through this process.