Budgeting Research: Three Theoretical Perspectives and Criteria for Selective Integration

Abstract

Budgeting is one of the most extensively researched topics in management accounting and has been studied from the theoretical perspectives of economics, psychology, and sociology. Thus, budgeting offers opportunities for research that chooses between competing theories from these perspectives or combines theories from different perspectives if they are compatible, to create more complete and valid explanations of the causes and effects of budgeting practices. In the first part of the paper we analyze budgeting research in the three theoretical perspectives, focusing on important similarities and differences across perspectives with respect to the primary research question, levels of analysis, assumptions about rationality and equilibrium, budgeting and nonbudgeting variables, and causal-model forms. In the last part of this paper we identify four interrelated criteria for selective integrative research and provide an example of using these criteria for research on participative budgeting.