Budget Fragmentation in a Large Finnish Paper Company - A Case Study

This thesis delves into the phenomenon 'budget fragmentation', as denominated by practitioner Tiina Henttu-Aho (2016). Budget fragmentation is an example of emerging budgeting practices, which have started to gain foothold in recent decades as a reaction to the pitfalls the traditional annual budgeting practices have faced. In this thesis I present a comprehensive literature review, which provides a theoretical framework regarding the commonly criticised faults of the annual form of budgeting and introduces the concept of fragmented budgets as a part of the financial management control systems of an organization. The literature review is followed by an empirical case study, in which the budgeting practices of a large Finnish paper company were researched. The findings suggest that the company uses a fragmented form of budgeting in order to maximize profitability and the performance of the company