Budget Management : The perception and use of budgets within publicly traded companies in Sweden

Background The debate about the budgets being and not being has been going on for 40 years. On one hand advocates for abolishing the budget have been criticising the budget, arguing for example that it is a waste of resources that only provides an illusion of control. Whereas on the other hand, business students are still taught to use the budget and previous studies show that companies are still holding on to it. Hence, there seems to exist a budget paradox. Purpose The purpose of this thesis is to examine the use and perception of fixed budgets within larger companies of today and to clarify the reality behind the debate about the usefulness of budgets. Further, to get an understanding of what purposes are deemed as important when using different control measures, and how well these are fulfilled. Method This study is predominantly quantitative with a deductive approach, as it via a self-administrative web survey has collected data from 58 publicly traded companies in Sweden. The questionnaire has consisted of open- and close-ended questions, to provide a deeper understanding of the role the fixed budget. Conclusion The overall percentage of companies that have abolished the budget has increased when compared to previous studies, but the majority of 81% still use the fixed budget in one way or another. Out of the participating companies, 67% stated that they supplement the fixed budget with other control measures, and as the percentage of those considering abolishing the budget have decreased, the overall perception of the fixed budget has improved.