Transformations  in
Business & Economics

ARE THE TRADITIONAL BUDGETS STILL PREVALENT: THE SURVEY OF THE CZECH FIRMS BUDGETING PRACTICES
Boris Popesko, Petr Novak, Sarka Papadaki, Dusan Hrabec

ABSTRACT. Traditional budgeting and planning methods have been widely used as one of the fundamental management techniques across different types of organizations. In last two decades, managers and academics observed the growing dissatisfaction with these traditional budgeting concepts, which are based on annual bases and control functions. Traditional budgeting methods are very often criticized for the inflexibility and strong focus on resource allocation. Criticism was focused as well on the problems related with the use of tradition budgets as a tool of management control. Many research studies points at the necessity of adopting more sophisticated budgeting methods, which could contribute to better performance management and control of business organizations. Current trends lie in adopting flexible, decentralized budgeting systems that are focused on the use of key performance indicators (KPI). The paper presents the results of the survey of Czech enterprise budgeting practices. The objective of the study was to analyse the current budgeting practices of the Czech firms and analyse the importance of the budgeting systems for company management. The first part of the paper presents the analysis of the trends in budgeting practices worldwide, which are based on the shift from traditional budgeting methods and an increasing use of alternative methods based on the performance measurement. The main part of the study presents the results of the questionnaire survey of the Czech enterprises' budgeting practices performed by the authors with the focus on the approach to the used budgeting system and its quality perception. The main objective of the survey is to find if the Czech budgeting practices are featured with similar discontent, which can be observed in literature and some foreign studies .

KEYWORDS: budgeting, planning, managerial accounting, performance management, Czech Republic.

JEL classification: M41, M19.