Playing the Game - A Study of Budgetary Gamesmanship within Financial Planning Processes.

Sammanfattning: Purpose: The purpose of this research is to look into different financial planning processes and approaches and see whether gaming behavior is more predominant in one financial planning process or approach over the other as theory suggests. Additionally, the research aims to identify whether performance measures directly tied to financial planning targets are evident and whether this could be the root cause of the continuous gaming behaviors, despite the various new budgeting alternatives and approaches introduced which aim to reduce them. This will help understand if budgets are being used unnecessarily for control, causing information asymmetry problems (moral hazard) between management and executives. Methodology: This paper follows a quantitative research strategy with a deductive relationship between theory and research. A non-experimental cross-sectional research design (survey research) is used for primary data collection which is then complemented by secondary data from two previous studies. Literature Review: The literature review focuses on topics around the budgetary literature. This includes budgeting critique, budgeting processes and approaches, Better Budgeting, Beyond Budgeting and lastly, budget gaming and performance measures tied to financial planning. Empirical Foundation: The empirical data consists of both primary and secondary data. The data was collected through a self-completion questionnaire, reports and academic journals. Conclusion: This research confirmed that gaming behaviors are evident within organizations, even dominant in some samples. The gaming behaviors are nonetheless independent of the type of financial planning process or approach exercised, or whether budgetary or forecast targets are tied to performance measures or not. Although gaming behavior was certainly identified, no decisive cause nor solution for gaming behavior was found in this research. Importantly, the study concluded that most organizations still used budgets, although, supplemented with other alternative planning tools alongside them. Although these budgeting alternatives may reduce other inefficiencies of the traditional budgetary process, there was no sign that they reduced the effect of gaming behavior. What truly affects and mitigates the gaming behavior within financial planning processes is therefore left for further research.