Determinants and Effects of Diagnostic and Interactive Use of Budget in Iranian Companies
International Journal of Business and Economics Research
Volume 5, Issue 3, June 2016, Pages: 46-54
Received: Nov. 17, 2015; Accepted: Dec. 16, 2015; Published: May 11, 2016
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Farzane Jalali Ali Abadi, Department of Management, University of Tehran, Tehran, Iran
Alemeh Yazdanian, Department of Management, University of Tehran, Tehran, Iran
Elham Jamali, Department of Management, University of Tehran, Tehran, Iran
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Regarding the vital role of budget as a major feature of management control systems (MACS) in various fields like formulation of strategy, development of dynamic capabilities, competitive advantage; and additionally, due to the low volume of empirical research in this area, this paper investigates the application of budget in different Iranian companies. For this purpose, we first considered the diagnostic and interactive approaches toward MACS which are introduced by Simon (1990). We also focused on the model of Hofmann, Wald & Gleich (2012) to develop our research model and hypothesis. Finally, based on Hofmann, et al. (2012) study, we consider variables that may influence budget use such as environmental, organizational and individual factors. Findings show that leadership behavior, user attitude, competitive intensity and interactive use are determinants in diagnostic use. Besides, factors such as market dynamism, centralization, culture of trust, user attitude and leadership behavior influence the level of interactive use of budgets. Further, our research shows that both kinds of budget usage influence formulation and implementation of the strategy and diagnostic use of budgets has a significant and positive impact on financial performance.
Diagnostic Use, Interactive Use, Budget, Management Control System
To cite this article
Farzane Jalali Ali Abadi, Alemeh Yazdanian, Elham Jamali, Determinants and Effects of Diagnostic and Interactive Use of Budget in Iranian Companies, International Journal of Business and Economics Research. Vol. 5, No. 3, 2016, pp. 46-54. doi: 10.11648/j.ijber.20160503.13
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This article is an open access article distributed under the Creative Commons Attribution License ( which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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