Budgeting practices and performance in small healthcare businesses

King, Robyn, Clarkson, Peter M., and Wallace, Sandra (2010) Budgeting practices and performance in small healthcare businesses. Management Accounting Research, 21 (1). pp. 40-55.

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We present evidence linking primary healthcare business characteristics, budgeting practices, and business performance. Based on a sample of 144 responses from a survey of members of the Australian Association of Practice Managers (AAPM), we find that factors identified by contingency-based research are useful for predicting a business's budgeting practices. Specifically, we find the adoption of written budgets to be related to size and structure, and for businesses using written budgets, the extent of use is related to business structure, strategy and perceived environmental uncertainty. Finally, we find evidence of a relationship between budgeting practice and performance. Here, we initially find a business's performance to be positively associated with the use of written budgets. More refined tests of the "fit" between business contingency factors and extent of operating budget use then provide evidence of a positive association between the extent of "fit" and performance.

Item ID: 36799
Item Type: Article (Research - C1)
ISSN: 1096-1224
Keywords: budgeting, SME, healthcare businesses, management control-systems, accounting systems, contingency-model, strategy, companies, entrepreneurial, environment, directions, mechanisms, decision
Date Deposited: 19 Jan 2015 00:37
FoR Codes: 15 COMMERCE, MANAGEMENT, TOURISM AND SERVICES > 1501 Accounting, Auditing and Accountability > 150105 Management Accounting @ 100%
SEO Codes: 91 ECONOMIC FRAMEWORK > 9102 Microeconomics > 910209 Preference, Behaviour and Welfare @ 100%
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