Determinants Of Company Adoption Of A Top Down - Bottom Up Budget Process Procedure

This study develops and tests a theory on the determinants

of company adoption of different top down

– bottom up budget process procedures in a sample

of middle-large companies operating in Italy. Using

questionnaires collected by 141 management accountants,

it finds that companies adopt five different

budget process procedures. It shows that the complexity

of business units budget responsibility and

business units strategic diversification significatively

increase the likelihood of adopting a bottom up budget

process procedure (vs. the extreme top down one),

while company geographical dispersion and business

units geographical distance significatively reduce that

likelihood. This study also finds external determinants

to be not significant predictors of the likelihood of

adopting any bottom up budget process procedures

(vs. the extreme top down one).