The Development of Positive Budgetary Theory within the UK Hotel Industry
Jones, Tracy A
Previous applied empirical research is limited. This research builds a bridge\ud between management accounting 'normative theory' and current practice,\ud through the development of 'positive budgetary theory'. In order to achieve\ud this a series of objectives were set, relating to: developing a statement of\ud textbook 'normative' theory; identifying industry practice; analysing practice in\ud relation to theory; critically reviewing the rationale for practice; and\ud developing a model of 'positive' budgetary theory appropriate for UK hotel\ud organizations.\ud The methodological stance was interpretive and corpus based. Individual\ud corpus (body of knowledge) were developed related to 'normative' theory and\ud hospitality industry practice. An interpretative approach was used to\ud interrogate the corpus in order to ascertain 'positive' theory, concerning\ud budgeting in the hospitality industry. The methodological approach adopted\ud required a multi-method approach, which allowed triangulation of results.\ud Methods used were content analysis, postal census survey, semi-structured\ud interviews and a qualitative questionnaire.\ud The content analysis results identified aspects of budgeting that were\ud 'normative', 'probably normative', 'probably not normative', and 'not\ud normative' in textbooks. Of the sixteen aspects of budgeting reviewed ten\ud were considered normative (at the primary coded level) but others such as\ud zero base budgeting was probably not normative.\ud Findings from industry research established aspects of practice in line with\ud 'normative' theory. Positive theory developed was informed by practice,\ud normative theory and the rationale for industry practice. No general\ud 'theory/practice' gap was identified for budgeting. For many aspects such as\ud the need for participation in the budgeting process, or the marginal reporting\ud of zero base budgeting, there was agreement. However flexible budgeting\ud was viewed has having little use in the industry, whilst it was normative in\ud textbooks. The results also identify aspects that need to be reconsidered by\ud industry, particularly participation at lower levels in the organization and the\ud financial training needs of non-financial managers.
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