Usability and functions of the budget in the
perception of managers of a company in the metal-
mechanical field
Silvana Dalmutt Kruger
PhD in Accounting from UFSC.
Federal University of Mato Grosso do Sul, UFMS, Brazil.
silvana.d@ufms.br
http://lattes.cnpq.br/0153188470408166
https://orcid.org/0000-0002-3353-4100
Lindomar de Togni
Graduated in Accounting from UNOESC.
Regional Community University of Chapecó, UNOCHAPECO,
Brazil.
togni@unochapeco.edu.br
http://lattes.cnpq.br/3255383474175238
https://orcid.org/0000-0003-0051-4645
Antonio Zanin
PhD at the Department of Production and Systems at the
University of Minho (Portugal).
Federal University of Mato Grosso do Sul, UFMS, Brazil.
zanin.antonio@ufms.br
http://lattes.cnpq.br/5826160717318135
https://orcid.org/0000-0001-7837-7375
Availability: https://doi.org/10.5965/2764747111212022060
Submission date: July 26, 2022.
Approval date: October 23, 2022.
Issue: Vol. 11, No. 21, Dec. 2022
58
Usability and functions of the budget in the perception of managers of a company in the
metal-mechanical field
Abstract
Objective(s): The study aims to relate the usefulness and functions of the budget in the
decision-making process, based on the perceptions of the managers of a company in the metal-
mechanical sector. Method: Methodologically, the research is descriptive, based on a survey,
considering a sample of 33 managers/supervisors/analysts who work in different areas of the
studied company. Results: It was found that 78.80% of managers use the annual budget with
monthly monitoring (budget versus actual), 84.80% indicate its use as an artifact of planning,
coordination, resource allocation, and determination of operational volumes. The mean rank
(MR) obtained shows that managers identify the functions of budget planning, dialogue, and
utility, demonstrating the usability of the instrument in the management process. The main
functions of the budget were identified as: the coordination of the company’s units (4.82);
analysis of monthly and annual projections (4.76); planning linked to company strategies
(4.73); and comparison of planned performance with actual results (4.70); the results even
indicate that in the context of the COVID-19 pandemic, the budget helped to align new
strategies and adjust organizational planning (4.27). The findings indicate that the budget has
multiple functions for the managers of the company studied, confirming its recognition by
managers as a management instrument, with utility related to the planning and decision-making
processes. Contributions: As a contribution, the study highlights the different functions and
adaptability of the budget in the organizational context, demonstrating its usability by managers
who work in different sectors in the company.
Keywords: Business Budget. Budget Functions. Budget Utility.
Usabilidade e funções do orçamento na percepção dos gestores de uma empresa do
ramo metalmecânico
Resumo
Objetivo(s): Este estudo tem como objetivo relacionar a utilidade e as funções do orçamento
no processo de tomada de decisões com base nas percepções dos gestores de uma empresa do
ramo metalmecânico. Método: Metodologicamente, a pesquisa é descritiva, realizada a partir
de um levantamento com amostra de 33 gestores/supervisores/analistas que atuam em diversas
áreas da empresa estudada. Resultados: Constatou-se que 78,80% dos gestores utilizam o
orçamento anual com acompanhamento mensal (orçado versus realizado) e 84,80% indicam o
uso como artefato de planejamento, coordenação, alocação de recursos e determinação dos
volumes operacionais. O ranking médio (RM) obtido evidencia que os gestores identificam as
funções de planejamento, diálogo e utilidade do orçamento, demonstrando a usabilidade do
instrumento no processo de gestão. Identificaram-se como principais funções do orçamento: a
coordenação das unidades da empresa (4,82); a análise das projeções mensais e anuais (4,76);
o planejamento vinculado às estratégias da empresa (4,73); e a comparação do desempenho
planejado com os resultados reais (4,70); os resultados, inclusive, indicam que no contexto da
pandemia Covid-19, o orçamento auxiliou no alinhamento de novas estratégias e nos ajustes
do planejamento organizacional (4,27). Os achados apontam que o orçamento possui
múltiplas funções para os gestores da empresa estudada, confirmando seu reconhecimento
pelos gestores como instrumento gerencial, com utilidade relacionada aos processos de
59
planejamento e tomada de decisões. Contribuições: Como contribuição, este estudo evidencia
as diversas funções e a adaptabilidade do orçamento no contexto organizacional, demonstrando
a usabilidade pelos gestores que atuam em distintos setores na empresa.
Palavras-chave: Orçamento Empresarial. Funções do Orçamento. Utilidade do Orçamento.
Funciones de usabilidad y presupuesto en la percepción de los gerentes de una empresa
metalmecánica
Resumen
Objetivo(s): Este estudio tiene como objetivo relacionar la utilidad y funciones del presupuesto
en el proceso de toma de decisiones a partir de las percepciones de los gerentes de una empresa
del sector metalmecánico. Método: Metodológicamente la investigación es descriptiva,
realizada a partir de una encuesta con una muestra de 33 gerentes/supervisores/analistas que
laboran en diferentes áreas de la empresa estudiada. Resultados: Se encontró que el 78,80%
de los gerentes utilizan el presupuesto anual con seguimiento mensual (presupuestado versus
realizado) y el 84,80% indican utilizarlo como un artefacto de planificación, coordinación,
asignación de recursos y determinación de volúmenes operativos. El ranking medio (RM)
obtenido muestra que los gestores identifican las funciones de planificación, interlocución y
utilidad presupuestaria, demostrando la usabilidad del instrumento en el proceso de gestión. Se
identificaron como funciones principales del presupuesto: la coordinación de las unidades de
la empresa (4,82); análisis de proyecciones mensuales y anuales (4.76); planificación vinculada
a las estrategias de la empresa (4,73); y la comparación del desempeño planificado con los
resultados reales (4.70); los resultados incluso indican que en el contexto de la pandemia de
Covid-19, el presupuesto ayudó a alinear nuevas estrategias y ajustar la planificación
organizacional (4,27). Los hallazgos indican que el presupuesto tiene múltiples funciones para
los gerentes de la empresa estudiada, lo que confirma su reconocimiento por parte de los
gerentes como una herramienta de gestión, con utilidad relacionada con los procesos de
planificación y toma de decisiones. Aportes: Como aporte, este estudio destaca las diferentes
funciones y adaptabilidad del presupuesto en el contexto organizacional, demostrando su
usabilidad por parte de los directivos que actúan en los diferentes sectores de la empresa.
Palabras clave: Presupuesto Empresarial. Funciones Presupuestarias. Utilidad Presupuestaria.
Introduction
In the competitive scenario, management strategies, such as planning and analysis of
economic and financial performance, become differenting factors for strategic alignment
(Souza et al., 2021). The complexity of the environment requires managers to take efficient
measures to monitor results and to support the decision-making process (Bornia & Lunkes,
2007), thereby planning, organizing, and controlling become competitive differentiators for
organizations seeking to achieve proposed objectives (Valverde et al., 2020).
Developing control skills and operational planning is necessary for conducting business
(Dantas Neto & Oliveira, 2021). The planning and contingency of future events, which
influence the development and performance of activities, are a recurring demand of managers
(Silva et al., 2018). In this sense, using the budget alongside other management controls makes
planning and analysis more efficient, helping the decision-making process (Silva et al., 2020).
60
The organizational structure of companies is undoubtedly a fundamental parameter for
developing their operational activities, and the business budget is an instrument of management
control to support management and decision-making (Mucci et al., 2016). The budget use also
unfolds into several functions, including as an artifact to evaluate personal performance
(Beuren & Silva, 2014).
Identifying how managers and organizations evaluate organizational performance
becomes relevant to control and define strategies, aiming to compare results and evaluate the
profitability of investments (Kruger & Petri, 2014). Preparing and developing the budget
should involve several sectors and individuals to measure and elaborate budget targets
(Defaveri et al., 2019). The comparison between the budget and the actually carried out project
allows observing the efficiency of each sector of the organization and the strategies to achieve
the defined goals (Dantas Neto & Oliveira, 2021). In this sense, the budget assumes multiple
functions, creating values and supporting management processes, contributing to improve
business performance (Mucci et al., 2016).
Frezatti et al. (2013) indicate that the budget process can be structured under the
perspectives top down (defined from the direction of the company) or bottom up (defined by
the areas, evaluated and validated by senior management). Silva et al. (2020) highlight the
relevance of the budget for the management control of organizations, especially for the support
in strategies and decision-making.
Budget functions can be goal-creating, and different priorities may arise in the search
for opportunities (Mucci et al., 2021). In this sense, the budget is recognized as a modern
management artifact, and the various studies in the literature indicate the relevance of budget
structuring and of the incentives of budget application, as supports for organizational planning
(Luza & Lavarda 2021).
Vargas-Hernandez and Cardenaz (2019) show that the budget allows predicting and
directing actions, aligning monetary strategies with actions for executing strategies. The budget
becomes a support base for decision making, besides enabling the evaluation of planning,
contributing to the budgetary control of operational routines and the analysis of the
effectiveness of business activities (Flores & Leal, 2018). Chenhall et al. (2011) indicate the
importance of integrating the budget into management control systems to interact with
managers and encourage innovation and improvement processes in organizations.
The relevance of the budget in the business context is highlighted, especially to assist
managers in the decision-making process and in the measurement and elaboration of budget
goals (Dantas Neto & Oliveira, 2021; Defaveri et al., 2019; Mucci et al., 2016). In this context,
the main problem of this research arises: what is the usefulness and function of the budget in
the decision-making process? The objective, therefore, was to relate the usefulness and
functions of the budget in the decision-making process, based on the perceptions of the
managers of a company in the metal-mechanical sector.
The relevance of the study is justified considering the practical contributions and
perceptions of managers, evidencing that the budget assumes multiple functions in the
corporate environment, and showing a managerial artifact in supporting the decision-making
process (Mucci et al., 2016). In this respect, this research corroborates discussions about the
budget usability and functions, considering the purpose of control and planning of the
instrument. Furthermore, it shows that the instrument is used by managers from different
sectors and with different backgrounds, with a consensus on the perception of the relevance of
the budget to support performance analysis and decision-making process. The results
corroborate the evidence of the usefulness of the budget in the management process by all
sectors of the organization (Lenz & Feil, 2016).
61
This article is organized in five sections, besides this introduction. The following
section is the theoretical review, contemplating the importance, functions, and types of business
budget. The third section shows the methodological procedures of the study. Then, the results
and analysis, providing a discussion of the perceptions of the use and functions of the budget
by the managers of the company studied, are shown. Finally, the fifth and last section shows
the final considerations, emphasizing the contributions of the research and suggestions for
future studies.
Theoretical review
This section discusses the importance of using the budget in the decision-making process,
highlighting the functions of the budget and studies related to the theme.
Business Budget
The budget process reflects the organization’s strategic planning, since it guides and
provides the guidelines that direct the actions for a given period, including the planning,
execution, and control stages (Lunkes et al., 2014). Companies can prepare for events and
contingency adversities based on controlling, analyzing, and managing the budget (Souza et
al., 2021).
The budget contributes to aligning business objectives, assisting managers in the stages
of goal control, inclusion of actions or adjustments to lead the business to the proposed
objectives (Dal Magro & Lavarda, 2015). To this end, such goals and actions should be
disseminated and understood by all sectors of the organization (Lenz & Feil, 2016). Mucci et
al. (2016) highlight the importance of the budget to assist managers’ decision-making process.
According to Vargas-Hernandez and Cardenaz (2019), in the financial issue, the budget
allows to predict and direct pre-established plans on monetary issues that positively relate to
the execution of strategies. Flores and Leal (2018) show that the budget is one of the main
support bases for decision making, since it allows evaluating planning and ensuring budget
control of the operational routines of the activities. Dantas Neto and Oliveira (2021) point out
the importance of the budget in the face of the scenario of business competitiveness for
assisting in planning, evaluating, and controlling activities.
Organizations should internally analyze their operations, flows, and strategies, but also
need to consider the comparative analysis of their performance with the external scenario, that
is, observe the market, future sales and cost prospects, acceptability of products, in addition to
the economic capacity of investment and operation (Dantas Neto & Oliveira, 2021; Tiger,
2005). In this context, the budget is established as a predictive instrument, contributing to
evaluating resources and analyzing their inputs and outputs, as well as identifying sources of
wealth generation (Chagas & Araujo, 2013).
The way companies define and organize the execution of organizational activities can be
understood as the structure of the organization, and is determinant both for the efficiency and
motivation of work and for the management and control of results (Mendes et al., 2018). In the
context of the management control systems (MCS) of organizations, the budget is an
instrument for monitoring activities, guiding the planning and execution of goals and activities
(Flores & Leal, 2018; Mucci et al., 2016). To contextualize the MCS, Correia et al. (2020)
highlight that this system is a structure that assists in producing results.
Frezatti et al. (2013) indicate that the budget process can be structured over two
perspectives: (1) top down (from top to bottom – when it is defined from the directors of the
company); or (2) bottom up (bottom up – when it is proposed by the areas, subsequently
62
evaluated and validated by senior management). Vanzella and Lunkes (2006) say that basic
budgets work in stable markets, with few choices, in predictable situations, thus becoming a
basic and traditional method of management. However, the market has been changing and
seeking more information with budget tools, since the insufficiency of basic conjuncture
information limits organizations. Different models and types of budget stem from this.
The different types of budgets can be used and adapted to the organizational reality
context. Defaveri et al. (2019) explain that the budget is a most prominent managerial artifact
within the MCS. Chenhall et al. (2011) understand that budget integration and management
control systems favor innovation for organizations, providing future opportunities and
motivating those involved.
The multiple functions of the budget create values and relate their support to management
processes, thus improving business performance (Mucci et al., 2016). Defaveri et al. (2019)
indicate that the development of a budget involves the participation of several people within
the institutions to measure and elaborate budget goals for operational development. The
business budget, in synthesis, at the end of each stage, unifies all areas of the company,
allowing to observe the efficiency of each sector (Dantas Neto & Oliveira, 2021).
Table 1 comparatively shows different types of budget that can be adapted to the business
reality.
Table 1
Budget types
Types
Characteristics
Zero-
based
budget
In this process, the philosophy is to break with past occurrences, that is, not relying on previous
facts to prepare the budget. This type of budget proposes to discuss all operational activities that
will consume the resources of the entity, questioning each expenditure (consumption of
resources) in the search for the real need of each department.
Static
budget
This type of budget uses as a premise the non-change of the activity level. In other words, it
means that quantities and volumes are static, such as the quantity of products sold. After the
budget is run, the actual data is compared with the budgeted data.
Flexible
budget
Its elaboration includes the distinction between fixed and variable costs. While fixed costs will
be treated as usual, those variable will follow the volume of activities, that is, the budget is
adaptable to changes in activity plans, not to a single static plan.
Adjusted
budget
This model originates from the flexible budget, but incorporates the change of a volume or the
change in the level of activities that was initially planned. Thus, by the characteristics of this type
of budget, making adjustments to the planned volumes is possible, changing the levels or even
changing the previously budgeted quantities.
Corrected
budget
It can be conceptualized by the automatic adequacy of the original budget, whenever prices
variate depending on inflation or according to adjustment clauses based on future inflation.
Rolling
budget
Rolling budget represents new terms on budgets, which aim to make the planning and control
tool more flexible and less static. In this concept, at least 12 months (or more, depending on the
concept of the company) are projected, and as soon as a month ends, a new period is projected,
using the same time base.
Source: Adapted from Zortéa and Araujo (2017).
Silva and Lavarda (2020) show that the development of effective budget control
stimulates organizational creativity, since it is an important part of the work environment. Silva
et al. (2020) highlight the importance of the budget as management control of the organization
and, consequently, in supporting the analysis of the behavior of the strategies, serving as a basis
for monitoring between the planned and the executed and to support the decision-making
process.
63
Budget Functions
The main objective of a budget is to establish strategies that address business activities
in a given period (Flores & Leal, 2018). Its use allows measuring the predicted and actual
performance, becoming an ally to the process of operational planning and control (Mário et al.,
2013). The budget provides a vision for the future, guides strategies, assists in defining goals
and, consequently, allows the evaluation of business performance (Santos et al., 2020).
Characterized as an artifact of managerial control, the budget assumes the function of
planning, analysis, and structuring of strategies (Silva et al., 2020). Used with planning
function, it allows the alignment to the company’s strategies and, later, the dialogue and
monitoring of the goals established in the planning (Luza & Lavarda, 2021). Frezatti (2005)
states that the relevance of the planning process is directly related to the execution of
operational activities.
On the basis of management accounting, the budget has, among its most varied
functions, the mission of providing diagnoses to managers who are at the head of operations
(Mário et al., 2013), whereas, for administrative purposes, it allows the participation and
engagement of managers (Defaveri et al., 2019). The perception of importance of the budget
process may be distinct, according to the utilization and perspectives of use of each professional
or organization (Mucci et al., 2016). It may even assume distinct functions and scope between
the sectors of the same entity (Lenz & Feil, 2016). Furthermore, we highlight the importance
of information that can support managers in conducting assertive strategies regarding
organizational objectives (Pederssetti & Kruger, 2020).
With control and planning function, the budget is considered a performance evaluation
instrument (Sena, 2021; Souza & Lunkes, 2015). Still, Mucci et al. (2021) emphasize that the
budget process is conducted by its multiple functions, highlighting the strategic, managerial,
administrative, and reporting roles. Vargas-Hernandez and Cardenaz (2019) point out that
organizations use budgets as an accounting tool to introduce strategies and conceal goals from
the organization’s sectors.
The usefulness of the budget is associated not only with forecasting, but also with
guidance, transparency of activities, creative strategies, and adaptation to the company’s
guidelines (Silva et al., 2020). The budget also has a motivational function, contributing to
aligning planning and goals, motivating, for example, the commercial sector to develop
operational strategies (Chagas & Araujo, 2013).
According to Hansen and Van Der Stede (2004), four budget functions serve as the
basis for organizations, which are divided as follows: 1) operational planning; (2) performance
evaluation; 3) goal communication; and 4) strategy formation. Still, Mucci et al. (2016) and
Mucci et al. (2021) show that the way in which organizations use the budget shows the multiple
functions of the instrument.
The multiple functions of the budget refer to the relevance of the instrument as a support
to the decision-making process and to its different ways and forms of use, whether for control,
planning by sector/department or at different hierarchical levels (Frezatti et al., 2011). Mucci
et al. (2016) indicate the reasons for preparing the budget, evidencing: 1) planning function
(plan, control, allocate resources, and determine operational volumes; 2) dialogue function
(communicate, create awareness, and motivate); and 3) usefulness function (mode of
elaboration and use, dimensions and style of use of the budget).
Previous studies, such as those by Dal Magro and Lavarda (2015), Lenz and Feil (2016),
Mucci et al. (2016), Vargas-Hernandez and Cardenaz (2019), Bilk et al. (2021), and Luza and
Lavarda (2021), highlight the importance of using the budget as an artifact to support the
management and decision-making process in the organizations’ environment. The results
64
indicated the breadth of the budget aligned with the projections of industrial companies, the
commitment to execution, the records of the budgeted versus what had been planned and their
analyses, indicating that the budget is widely used in operational planning, and is a
management artifact of support for the planning of the involved sectors (Dal Magro & Lavarda,
2016). Industries’ adoption of the flexible budget reveals the importance of the artifact as an
aid in decision-making and in the commitment to the goals and responsibilities tied to the
budget, evidencing the usefulness of the budget as a management tool (Lenz & Feil, 2016).
Mucci et al. (2016) identify the multiple functions of the business budget and its
association with the perception of usefulness and relevance. The positive association between
the functions of planning (ex ante) and dialogue (ex post) reveals that the budget has multiple
functions within a single company, highlighting its importance in performing planning and
dialogue functions, which allows associating it with the perception of usefulness and relevance
of this artifact for the management and control process. In a sample of Mexican companies,
Vargas-Hernandez and Cardenaz (2019) indicate the need to implement the use of the budget
as a management artifact to improve business productivity and competitiveness, taking into
consideration the importance of using this resource as an instrument to support the decision-
making process. Furthermore, the budget can collaborate with companies in times of economic
crises, and the budget planning function is more important for managers than the performance
evaluation function (Bilk et al., 2021). Luza and Lavarda (2021) show that the coercive,
mimetic, and normative factors arising from the business environment drive the usefulness of
the budget and indicate the positive influence of planning and strategy functions.
In general, the budget is a managerial artifact used in the environment of organizations
in different branches of activity and is adaptable to different sizes, whose use is directly related
to the purpose of supporting the control and planning of organizations and supporting the
decision-making process.
Methodological procedures
Methodologically, the research is characterized as descriptive, performed with a survey,
with quantitative analysis. Data collection was performed with an electronic questionnaire (via
Google Forms), sent to the managers of a Brazilian company in the industrial machinery
manufacturing sector, to relate the usefulness and functions of the budget in the decision-
making process based on the perceptions of the company’s managers.
Note that, after contact with the company, the questionnaire was sent in advance to the
responsible director, and after agreeing with the scope of the research and the conduct related
to data collection procedures, the schedule for sending the questionnaire to the 48
managers/supervisors of the organization was established. The data collection period occurred
between July 9, 2021 and July 31, 2021.
The study environment is a large company, located in Santa Catarina, with 27 years of
experience at national and international level, with projects of installation of industrial plants,
equipment and machinery for the cattle, pig, poultry, fish sector, among others, serving
slaughterhouses, dairy products, food industries, cosmetics, etc. The company is a family
business and has 386 direct employees, in total, being 48 managers/supervisors from various
areas of the organization and analysts involved with the budget. The study sample included 33
respondents/participants.
The research construct was developed from the study by Mucci et al. (2016),
considering the usefulness and functions of the budget, aiming to obtain empirical knowledge
about the usability and functions of the budget, according to the perceptions of
65
managers/supervisors/analysts of the company studied. According to Patton (2014), detailing
the environment of a case study can collaborate with other organizations, considering the
similar characteristics. In this sense, this research aggregates the perceptions and analysis of
the context of a large family company, active in the metal-mechanical sector.
The questionnaire was elaborated initially contemplating the characteristics of the
respondents: 1) age; 2) gender; 3) degree and training area; 4) function or position; and 5) time
in the company. Subsequently, respondents were asked about the budget: 1) types and form of
using the budget; 2) perceptions of use; and 3) budget functions. In this stage, to identify the
functions of the budget, a 5-point Likert scale was used to measure the degree of agreement
with the planning, dialogue, and utility functions of the budget. After data collection, the
information was organized in tables, and descriptive statistics and mean ranking (MR)
techniques were used for data analysis. To identify the answers MR, the method from Malhotra
(2001) for Likert scale analysis was used as a model.
Analysis and Interpretation of Results
From the questionnaires applied to the managers of the company studied (in the context
of the study environment), the respondents were initially characterized regarding age, gender,
training, time, and area of activity in the company studied, as shown in Table 2.
From the questionnaire, 60.60% of the respondents were between 30 and 40 years old,
91% were male, with only 9% of women. Regarding the training of managers, 84.85% of the
interviewees have a bachelor’s degree, and the areas of greatest emphasis are Accounting,
Administration, and Engineering. Regarding how long they had worked in the company, 63%
totaled more than 5 years, and eight managers had more than 10 years of experience in the
company. Regarding the position or function they perform, 81.82% are managers or sector
coordinators, in addition to the director and four analysts.
Table 2
Participants’ characteristics.
Characteristics
Absolute frequency
Relative frequency
AGE
Up to 30 years
9
27.27%
Up to 40 years
20
60.60%
Up to 50 years
4
12.12%
Total
33
100%
Gender
Male
30
90.90%
Female
3
9.10%
Total
33
100%
Education
Elementary school or high school
5
15.15%
Undergraduate studies
12
36.36%
Specialization, master’s or doctorate
16
48.48%
Total
33
100%
Training Area
Non-graduated
5
15.15%
Accounting/Management
11
33.33%
Engineering
5
15.15%
Miscellaneous/other
12
36.36%
Total
33
100%
Time In The Company
Up to 5 years
12
36.35%
66
From 5 to 10
13
39.39%
From 11 to 15
6
18.18%
From 16 to 20
1
3.03%
Over 21
1
3.03%
Total
33
100%
Held Position or Function
Analyst/Assistant
5
15.15%
Manager/Coordinator
27
81.82%
Director
1
3.03%
Characteristics
Absolute Frequency
Relative Frequency
Nota. Dados da pesquisa.
Next, the periodicity and way of using the budget were questioned, with Table 3
showing the data obtained.
Table 3
Periodicity and how to use the budget
BUDGET TYPE
ABSOLUTE
FREQUENCY
Annual budget with monthly monitoring (budget versus actual)
26
Budget by department or product/production line/segment
9
Annual budget
8
Semi-annual budget
5
Quarterly budget
4
Other
2
Total
33
Source: Research data.
Table 3 shows that some respondents indicate the use of more than one type/form of
budget use, and the annual budget with monthly follow-up (budget versus actual) appears with
a higher percentage of use (78.80%). Quarterly, semiannual, and annual periodicities are also
indicated (totaling 51.50% of the sample), in addition to the budget by department or
product/production line/segment (27.30%). The distinctions related to the periodicity of
budgeting may be associated with the form of participation in the budget preparation or in the
methodology used by departments/sectors for budget preparation and monitoring.
Table 3 shows that the budget is used by managers in various ways, with monthly,
quarterly, semiannual or annual analysis, or with monthly monitoring of the actual versus the
budget or by department/product/segment. Previous results of the study by Dal Magro and
Lavarda (2015) showed the use of the budget aligned with the planning (budget versus planned)
and the analysis performed by sector. The findings corroborate the research of Mucci et al.
(2021), showing that the budget process involves the combination of several characteristics to
be applied to the most varied functions of the budget.
Frezatti (2005) indicates in the context of the annual budget the relevance of the
planning process related to executing the activities. In this sense, note that the respondents
indicate the use of the budget with varied periodicity, suggesting the use of this artifact as a
subsidy for monitoring the annual planning previously prepared.
67
Table 4
Perceptions of budget usefulness
Budget use
Absolute
frequency
Relative
frequency
Planning, coordination, allocation of resources, and determination of
operating volumes
28
84.80%
Pointing out goals to be achieved, analyzing deviations, and making
corrections
21
63.60%
Performance control (budget versus actual)
20
60.60%
Communication of goals and formation of long-term strategies
15
45.40%
Allocation of resources and communication
10
30.30%
Operational planning and short-term performance evaluation
8
24.20%
Influencing behaviors, motivating, improving processes
7
21.20%
Communication, awareness creation, motivation
6
18.20%
Total
115
100%
Source: Research data.
Another characterization investigated was the perception of managers regarding the
usefulness of the budget, considering that multiple functions, shown in Table 4, were pointed
out. A total of 84.80% of the respondents understand that the purpose of the budget is to plan,
coordinate, allocate resources, and determine operational volumes, followed by the perception
of 63.60% who indicate the use to point out goals to be achieved, analyze deviations, and make
corrections, in addition to the use for performance control (60.60%). Other perceptions related
to the communication of goals and formation of long-term strategies, allocation of resources
and communication, and operational planning and evaluation of short-term performance also
reveal important aspects of using the budget as an instrument to support organizational
management.
Perception characterization may be associated with the way the budget is developed
and used by the company, as recommended by Mucci et al. (2016), and the findings agree with
the study by Souza and Lunkes (2015), highlighting the relevance of the budget as an
instrument of control, planning, and evaluation.
Next, Table 5 shows the answers for when the participants were asked about the budget
functions.
Table 5
Budget functions
Budget functions
Mr
Planning
function
Planning linked to company strategies
Planning
function
Coordination of the company’s units
4,82
Resource allocation for units
4,61
Determination of operating volumes
4,45
Instrument to support strategic management
4,64
Analysis of variations and actions (corrective or guidance) that are taken
based on the performance standard
4,70
Dialogue
function
Allocation of responsibilities
Dialogue
function
Communication of objectives and ideas
4,09
Creation of awareness of what is important to achieve
4,64
Staff motivation
3,91
Establishment of a basis for remuneration and bonus systems
4,42
Comparison of planned performance with actual results
4,70
68
Analysis of results and the relationship with the goals
4,52
Usefulness
function
The budget allows me to better manage my management
Usefulness
function
The budget allows me to maintain and improve my performance as a manager
4,39
The budget allows me to always be aware of what is needed to get a good
performance in my work
4,21
The budget provides me with adequate information to optimize decisions and
meet my performance goals
4,45
The budget makes me able to obtain tactical and strategic information needed
to evaluate decision alternatives
4,48
The budget is useful to me in the analysis of monthly and annual projections
4,76
Managers’
perceptions
The company (or department) is committed to planning, executing, and
controlling
Managers’
perceptions
In the context of the COVID-19 pandemic, the budget assisted in the
alignment of new strategies and organizational planning adjustments
4,27
Source: Research data.
Table 5 shows the answers obtained with the MR about the budget functions. The results
show in a comparative way the planning, dialogue, and utility functions of the budget. In the
analysis, the functions related to planning present higher MR, demonstrating the importance
perceived by managers, with the coordination functions of the company’s units (4.82) and
planning linked to the strategy (4.73) standing out. This result is aligned with the findings of
Lunkes et al. (2014), showing that the budget function is linked to the company’s strategic
planning since it provides support information to managers. The function with less emphasis
relates to determining operational volumes (4.45), which does not make it less important,
considering that managers agree regarding the relevance of the budget with the function of
coordinating units and aligning planning and strategies.
Regarding the dialogue function attributed to the budget, it is relevant for comparing
the planned performance with the actual results (4.70), followed by creating awareness of what
is important to achieve (4.64). With this, note the importance of the budget dialogue function
as a support instrument to monitor the established goals. In this sense, the functions of planning
(ex ante) and dialogue (ex post), evidenced by Luza and Lavarda (2021), stand out. The lowest
MR of the obtained answers is related to the motivation function (3.91) – even if managers
recognize the role of dialogue in creating awareness of what is important to achieve (4.64),
they do not perceive the budget as a support instrument in personal motivation.
The findings corroborate the research of Mucci et al. (2016) and Luza and Lavarda
(2021), highlighting the functions of planning and dialogue, as well as the relationship of the
budget with goal construction and monitoring, supporting the decision-making process.
For the function of budget use, from the MR, the analysis of annual and monthly
projections (4.76), the use of the budget in optimizing the management of each sector (4.55)
and the subsidy provided by the budget to obtain tactical and strategic information necessary
to evaluate alternative decisions (4.48) stand out. The perceptions show that, in the studied
company, the budget is perceived with planning, dialogue, and utility functions, reinforcing its
role as an organizational support instrument that allows improving the performance of
managers regarding the company’s objectives and strategies, as evidenced by Silva et al.
(2020).
The questionnaire showed the perception of managers and supervisors of the various
sectors regarding budget functions and utilities. Regarding the context of the COVID-19
pandemic, when asked if the budget helped to align new strategies and adjust organizational
planning, respondents showed they perceive the importance, according to the MR of 4.27.
Questioning the perception of managers regarding the commitment of the company or
department with the budget planning, execution, and control, lead to the MR of 4.12,
69
evidencing that the organization can still improve the communication and management of
budget attributes, aiming to demonstrate engagement and commitment to the functions and
uses of the budget by the teams.
Note the perceptions related to planning, organization, and control, becoming
competitive differentials for organizations, especially when the budget is aligned with strategic
planning and the managers recognize the proposed actions and objectives (Valverde et al.,
2020). The budget played an important role for the company in the crisis scenario triggered by
the pandemic of the new coronavirus, which agrees with the research conducted by Bilk et al.
(2021), evidencing that the budget adjusts and changes at determining and atypical moments
of crises, even though the planning function receives greater emphasis. In general,
corroborating the findings of Mucci et al. (2016), the results of this research show that the
budget is used and recognized as a management tool and that its functions are associated with
the perceptions of planning and dialogue.
The results also corroborate the researches of Dal Magro and Lavarda (2015), Lenz and
Feil (2016) and Vargas-Hernandez and Cardenaz (2019), with emphasis on the role of the
budget as support for the decision-making of managers and in the alignment of actions in
relation to organizational goals and strategies, justifying the relevance of the budget as a
management artifact. This research showed that the budget has multiple functions within the
organization, according to the study by Mucci et al. (2016), revealing that the budget functions
(planning, dialogue, and usefulness) are directly related to organizations’ operational processes
of control and planning. This study provides additional evidence to the findings of Dal Magro
and Lavarda (2015), Lenz and Feil (2016), Mucci et al. (2016), Vargas-Hernandez and
Cardenaz (2019), Bilk et al. (2021), and Luza and Lavarda (2021), demonstrating that the
budget has usability and control and planning function, considering the different perspectives
of managers in the decision-making process.
Final considerations
This study sought to relate the usefulness and functions of the budget in the decision-
making process based on the perceptions of the managers of a company in the metal-
mechanical sector. The research shows that the budget assumes multiple functions within the
studied organization. The findings demonstrate the centrality of the functions related to the role
of planning and budget dialogue, as well as the usability and function of the budget to support
decision-making processes by managers/supervisors.
The importance of budget functions within organizations stands out, as well as their use
by different sectors and levels, with diversified periodicity, revealing another characteristic of
the budget as a managerial artifact: being adaptable and malleable to the interests of managers,
departments/sectors and organizations in a broad way. A total of 78.80% of managers use the
annual budget with monthly monitoring (budget versus actual) and 84.80% indicate the use as
an artifact of planning, coordination, allocation of resources, and determination of operational
volumes.
Analyzing the MR of the answers obtained, we may observe that managers identify the
functions of planning, dialogue, and usefulness of the budget, evidencing the usability of the
instrument in the management process of the company. The main functions of the budget were
identified: the coordination of the company’s units (MR of 4.82); the analysis of monthly and
annual projections (MR of 4.76); the planning linked to the company’s strategies (MR of 4.73);
and the comparison of planned performance with actual results (MR of 4.70). The findings
show that the budget has multiple functions for the managers of the company studied,
70
confirming its usefulness as a management instrument related to planning and decision-
making processes. The results show the importance of the budget and its multiple functions
in the organizational context, especially regarding the usability for coordinating and monitoring
activities/operational units.
This research corroborates the literature by highlighting the usability of the budget by
a family business in the metal-mechanical sector that has, in total, 48 professionals acting as
managers/supervisors, whose perceptions about the use and functions of the artifact were
sought. As a contribution, the study shows the various functions and the adaptability of the
budget in the organizational context, demonstrating its usability by managers who work in
different sectors of the company. Therefore, the instrument is flexible and adjustable to the
interests of its users, and is used with different periodicity (monthly, quarterly, semiannual,
annual), to monitor the actual performance versus the budgeted or the performance by
department/product/segment. Furthermore, the managers indicated that, in the context of the
COVID-19 pandemic, the budget helped aligning new strategies and adjusting organizational
planning (MR of 4.27).
In the context of the company, using the budget for coordinating the company’s units
and developing projections gained greater prominence. In this sense, the functions related to
planning, organization, and control, identified as assumptions of the usability of the budget,
can evidently be competitive differentials for the studied company. Therefore, the research
contributes to other organizations by showing that the instrument is used in the process of
control and planning by managers, as an analysis and support mechanism to the decision-
making process. The article aggregates insights about the usability and functions that the
budget plays in business management, including with different perspectives on the part of
managers, confirming its relevance as a management tool.
As suggestions for future research, analyzing other environments and business
segments, observing the types of budgets used and their functions, considering the relationship
of financial performance with the use of the budget, and seeking to understand the importance
of this artifact in management and decision-making related to the results by department/sector
is recommended.
The results presented contribute to evidence the importance and usability of the budget
in the internal context of organizations, emphasizing it as an instrument of managerial support
to the process of control, planning, and decision-making. Further studies can explore the use
of the budget in implementing management strategies.
References
Beuren, I. M., & Silva, T. P. (2014). Participação no orçamento empresarial como forma de
valorização das pessoas: análise na perspectiva da justiça organizacional. Revista
Organizações em Contexto, 10(19), 71-101.
Bilk, A., Silva, M. Z., & Lavarda, C. E. F. (2021). Efeito da crise econômica nas funções
orçamentárias no setor industrial. Contabilidade Vista & Revista, 32(1), 160-182.
https://doi.org/10.22561/cvr.v32i1.5663
Bornia, A. C., & Lunkes, R. J. (2007). Uma contribuição à melhoria do processo
orçamentário. Contabilidade Vista & Revista, 18(4), 37-59.
Chagas, M. J. R., & Araujo, A. O. (2013). Orçamento empresarial como ferramenta de
auxílio à gestão: um estudo empírico nas indústrias de calçados da cidade de Campina
71
Grande-PB. Reunir: Revista de Administração, Contabilidade e Sustentabilidade, 3(3),
1-21. https://doi.org/10.18696/reunir.v3i3.111
Chenhall, R. H., Kallunki, J.-P., & Silvola, H. (2011). Exploring the relationships between
strategy, innovation, and management control systems: the roles of social networking,
organic innovative culture, and formal controls. Journal of Management Accounting
Research, 23(1), 99-128.
Correia, J. J. A., Nascimento, M. E. B., Santos, R. R. D., & Lagioia, U. C. T. (2020). Relação
entre sistemas de controle gerencial e comportamento organizacional. Revista
Evidenciação Contábil & Finanças, 8(2), 91-110. https://doi.org/10.22478/ufpb.2318-
1001.2020v8n2.49082
Dal Magro, C. B., & Lavarda, C. E. F. (2015). Evidências sobre a caracterização e utilidade
do orçamento empresarial nas indústrias de Santa Catarina. Advances in Scientific and
Applied Accounting, 8(1), 39-62.
https://asaa.anpcont.org.br/index.php/asaa/article/view/189/127
Dantas Neto, A., & Oliveira, C. E. (2021). O impacto da inovação no orçamento de empresas
industriais. Revista Brasileira de Gestão e Inovação, 8(2), 65-89.
https://doi.org/10.18226/23190639.v8n2.04
Defaveri, I. R., Santi, D. G., & Toigo, L. A. (2019). Relacionando as características e funções
do orçamento com a satisfação orçamentária em empresa de consultoria empresarial.
Revista Gestão Organizacional, 12(2), 24-41.
Flores, C. C., & Leal, R. (2018). Orçamento e controle orçamentário das despesas diretas e
indiretas com pessoal em uma empresa varejista de calçados. ConTexto, 18(39), 85-101.
Frezatti, F. (2005). Beyond budgeting: inovação ou resgate de antigos conceitos do
orçamento empresarial? Revista de Administração de Empresas, 45(2), 23-33.
https://doi.org/10.1590/S0034-75902005000200003
Frezatti, F., Relvas, T. R. S., Junqueira, E., Nascimento, A. R., & Oyadomari, J. C. (2013).
Críticas ao orçamento: problemas com o artefato ou a não utilização de uma abordagem
abrangente de análise? ASAA-Advances in Scientific and Applied Accounting, 3(2), 190-
216.
Frezatti, F., Nascimento, A. R. D., Junqueira, E., & Relvas, T. R. S. (2011). Processo
orçamentário: uma aplicação da análise substantiva com utilização da grounded theory.
Organizações & Sociedade, 18(58), 445-466. https://doi.org/10.1590/S1984-
92302011000300006
Hansen, S. C., & Van Der Stede, W. A. (2004). Multiple Facets of Budgeting: An
Exploratory Analysis. Management Accounting Research, 15(4), 415-439.
https://doi.org/10.1016/j.mar.2004.08.001
72
Kruger, S. D., & Petri, S. M. (2014). Novas evidências da relação entre medidas tradicionais
de desempenho e aquelas baseadas na geração de valor a partir do custo de capital.
Revista Universo Contábil, 10(2), 125-143. https://www.doi.org/10.4270/ruc.2014215
Lenz, E., & Feil, A. A. (2016). A análise da utilização do orçamento empresarial como
ferramenta de gestão industrial. Gestão e Desenvolvimento, 13(2), 112-127.
https://proxy.furb.br/ojs/index.php/universocontabil/article/view/4039/2661
Lunkes, R. J., Belli, A. P., Suave, R., & Andruchechen, J. R. (2014). Práticas de orçamento
no setor de bens industriais. Revista de Administração, Contabilidade e Economia da
FUNDACE, 5(1), 1-17. https://doi.org/10.13059/racef.v5i1.60
Luza, I. P., & Lavarda, C. E. F. (2021). Influência do isomorfismo institucional na aceitação
do orçamento mediada pelas finalidades de planejamento e diálogo. Revista de
Contabilidade e Organizações, 15(1), 1-11. https://doi.org/10.11606/issn.1982-
6486.rco.2021.174004
Malhotra, N. K. (2001). Pesquisa de marketing: uma orientação aplicada (3a ed.). Bookman.
Mário, P. C., Alves, A. D. F., Carmo, J. P. S., Silva, A. P. B., & Jupetipe, F. K. N. (2013). A
utilização de instrumentos de contabilidade gerencial em entidades do terceiro setor.
Sociedade, Contabilidade e Gestão, 8(1), 64-79.
https://doi.org/10.21446/scg_ufrj.v8i1.13283
Mendes, A. C. A., Kruger, S. D., & Lunkes, R. J. (2018). Características da estrutura de
controladoria: um estudo empírico em empresas do oeste catarinense. Contabilidade
Vista & Revista, 28(2), 121-140.
Mucci, D. M., Beck, F., & Frezatti, F. (2021). Configurações do processo orçamentário:
análise de empresas que atuam no Brasil. Revista de Educação e Pesquisa em
Contabilidade, 15(1), 89-109. https://doi.org/10.17524/repec.v15i1.2721
Mucci, D. M., Frezatti, F., & Dieng, M. (2016). As múltiplas funções do orçamento
empresarial. Revista de Administração Contemporânea, 20(3), 283-304.
https://doi.org/10.1590/1982-7849rac2016140121
Patton, M. Q. (2014). Qualitative Research & Evaluation Methods. SAGE Publications.
Pederssetti, W. C., & Kruger, S. D. (2020). Análise dos sistemas de controles gerenciais e a
interface com o ciclo de vida de uma indústria de alimentos. ABCustos, 15(3), 256-286.
https://doi.org/10.47179/abcustos.v15i3.597
Santos, T. R., Veloso, C. R., Zanolla, E. Z., & Silva, J. O. (2020). Reserva orçamentária:
estudo de caso em uma empresa comercial. Revista Mineira de Contabilidade, 21(1), 23-
33. https://doi.org/10.21714/2446-9114RMC2020v21n1t02
Sena, T. R. (2021). Características da produção científica sobre orçamento: uma análise
bibliométrica no período de 2012 a 2018. Revista de Gestão e Secretariado, 12(2), 52-
71.
73
Silva, A. J., Galegale, N. V., & Marion, J. C. (2018). Orçamento como instrumento de
controle interno para gestão das instituições eclesiásticas. Revista ENIAC Pesquisa, 7(2),
307-328. https://doi.org/10.22567/rep.v7i2.542
Silva, T. B. J., & Lavarda, C. E. F. (2020). Relação da utilidade do orçamento no
empoderamento e na criatividade. Contextus – Revista Contemporânea de Economia e
Gestão, 18(1), 81-91. https://doi.org/10.19094/contextus.2020.43566
Silva, T. B. J., Ferreira, M. P., Dal Magro, C. B. D., & Lavarda, C. E. F. (2020). Utilidade do
orçamento em cooperativas do agronegócio. Revista de Administração da Unimep, 18(4),
134-155.
Souza, K. G., Santos, G. C. D., Oliveira, E. R., Silva, D. L. J., & Paranaiba, A. C. (2021).
Análise da produção de artigos científicos sobre orçamento empresarial. Gestão e
Sociedade, 15(41), 4088-4118.
Souza, P., & Lunkes, R. J. (2015). Budgeting Practices: A Study on Brazilian Hotel
Companies. Revista Brasileira de Pesquisa em Turismo, 9(3), 380-399.
https://doi.org/10.7784/rbtur.v9i3.851
Tigre, P. B. (2005). Paradigmas tecnológicos e teorias econômicas da firma. Revista
Brasileira de Inovação, 4(1), 187-223. https://doi.org/10.20396/rbi.v4i1.8648911
Valverde, C., Chiareto, J., & Goulart, L. E. T. (2020). A importância do planejamento
financeiro e do controle orçamentário para a tomada de decisão em instituições de ensino
de educação básica. Revista Liceu On-line, 10(2), 136-153.
Vanzella, C., & Lunkes, R. J. (2006). Orçamento baseado em atividades: um estudo de caso
em empresa distribuidora de energia elétrica. Contabilidade Vista & Revista, 17(1), 113-
132.
Vargas-Hernandez, J., & Cardenaz, R. C. (2019). O orçamento na gestão financeira dos
Mpymes auxiliado pelo processo administrativo como uma ferramenta competitiva.
Revista Administração em Diálogo, 21(3), 87-114. https://doi.org/10.23925/2178-
0080.2019v21i3.39868
Zortéa, B. R., & Araujo, G. A. (2017, 3-6 de junho). Planejamento estratégico e orçamento
empresarial: estudo da integração entre as práticas gerenciais em uma empresa
prestadora de serviços. Congresso da Anpcont, Belo Horizonte.
https://anpcont.org.br/pdf/2017/CCG570.pdf