Budget–forecast responsiveness, forecast use and management control effectiveness
DOI:
https://doi.org/10.1108/REGE-01-2026-0016/11863732Palabras clave:
Management control effectiveness, Loose-coupling theory, Interdependence, Budget, Forecast, Forecast rolesResumen
PurposeThis study examines the relationship between the responsiveness of budgets and forecasts and management control (MC) effectiveness, and whether this relationship is mediated by the planning, control and evaluation roles of forecasts.
Design/methodology/approachWe conducted a survey and obtained a sample of 86 medium and large firms that use both annual budgets and forecasts. For data analysis, we used Structural Equation Modeling (PLS-SEM).
FindingsThe results show that budget–forecast responsiveness is not directly associated with MC effectiveness but is positively associated with all three forecast macro-functions: planning, control, and performance evaluation. However, effectiveness arises from how forecasts are used through two distinct channels. Planning has the strongest direct association with MC effectiveness, contributing autonomously rather than transmitting responsiveness. Performance evaluation was the only role mediating the responsiveness–effectiveness relationship.
Practical implicationsOur findings suggest that aligning budget and forecast design is insufficient, on its own, to increase MC effectiveness; it depends on how forecasts are used. Using forecasts for planning delivers value directly, whereas using them for performance evaluation converts a responsive design into effectiveness.
Originality/valueThis study contributes to the internal forecasting and management control literature by linking budget and forecast (through loose coupling theory), forecast use and MC effectiveness.
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Derechos de autor 2026 Daniel Magalhães Mucci
Esta obra está bajo una licencia internacional Creative Commons Atribución 4.0.
