Budgeting process as a Management Control Tool: A Conceptual and Theoretical Analysis

Abstract

ABSTRACT
This article proposes a conceptual and theoretical analysis of the budgeting process (BP) as a central practice of management control (MC). It is based on an in-depth literature review drawing on academic works related to key concepts such as management control, the budgeting process, diagnostic control, and interactive control. The analysis also mobilizes organizational theories in order to better understand the role of the budgeting tool within organizations. Four theoretical perspectives structure this analysis: the classical school of management, human relations theory, neo-institutional theory, and contingency theory. This combination highlights the diversity of explanatory approaches regarding the role of budgeting in organizations. The literature synthesis makes it possible to identify analytical elements consistent with the research objective and to propose a comprehensive understanding of the budgeting process as a management tool for organizations. Thus, the study highlights the importance of the budgeting process as a control mechanism that enables both planning and the evaluation of organizational performance in complex and uncertain environments. Furthermore, this conceptual research emphasizes the structuring role of budgeting within management control systems as a decision-support and strategic management tool. It also underlines the interactions between different control mechanisms, particularly diagnostic and interactive control, which contribute to improving organizational performance. Ultimately, this theoretical work offers an integrated vision of the budgeting process as a central practice of management control within organizations.
Keywords: Budgeting process, management control, organizational theories, organizational performance.