Poster Paper: When Budgeting Decisions Giveth and Taketh Away

Friday, November 8, 2013
West End Ballroom A (Washington Marriott)

*Names in bold indicate Presenter

David R. Connelly and Robert McMurray, Utah Valley University
We all like to think of budgeting as a rational activity driven by strategic direction of the organization.  Indeed the literature is full of budgeting “best practices” and models for linking annual allocations with long term goals.  Any of us that have taught budgeting struggle with describing the preferred norms of budgeting with the realities we have observed.  Reality often demonstrates that budgeting is less than rational and data driven even with all of the training that those in the room have received.  Certainly we know that budgeting is rife with politics but that is often portrayed at the strategic level of state or municipal budgets not at the organizational level where rationality is promoted and might we say often expected.  This paper looks at organizational budgeting.  Budgeting at the organizational level it is said is driven by information, strategic goals, and rationality.  That said, if we are serious about budgets and strategic planning we might expect that in times of fiscal crisis we could see the contraction of the overall organizational budget and deep cuts in some areas but potential expansions in other areas- specifically those identified strategic goals.  While we might expect this we rarely if ever see it.  The purpose of this paper will be to explore the decision process an organization that may have actually done this.  Was it research informing policy (budgeting) choices in a timely and useful fashion (see conference call)? Or what was it that created a decision environment where the overall budget cuts that could have been absorbed by revenue expansion were not but instead, deep cuts were passed along so as to allow for expansion of other areas in the budget?  Was it strategic choices and information that drove this, or something else?  Is the current expansion and cuts being evaluated in terms of why the decisions were made in the first place?  What have the perceptions of employees been when they have seen expansion in some areas but then been told they have to make cuts in others been?  This paper will through a series of interviews with key decision makers, group interviews and surveys with various stakeholders seek to unpack these decisions and subsequent activities.  This will also be examined in a comparative fashion against decisions made at similar organizations functioning in the same geographic region and dealing with the exact same environmental conditions and how they approached similar budget shortfalls.