Faculty Scholarship 1994 - Present

Budgetary Allocations to Organizational Peripheries: Are they Related to Organizational Effectiveness?

The public-sector budgeting and organizational ecology literature suggest that budgeting is probably unrelated to organizational effectiveness except in an organization's periphery. In contrast, the private-sector budgeting and management science literature suggest that budgeting is probably related to organizational effectiveness except in an organization's periphery. Our study takes a step, towards resolving these contradictory expectations by examining the relationship between peripheral budget allocations and profitability in a private-sector population of large U.S. freight railroads. We find an insignificant impact on profitability of budgetary allocations to organizational peripheries, supporting the expectations of the private-sector budgeting and management science literature.