Abstract

ALHALAWI, Noora S.  and  DAMMAK, Saida. Breaking the budget chains: Empowering Iraqi small- and medium-sized enterprises through Beyond Budgeting. S. Afr. j. econ. manag. sci. [online]. 2024, vol.27, n.1, pp.1-11. ISSN 2222-3436.  http://dx.doi.org/10.4102/sajems.v27i1.5211.

BACKGROUND: Traditional budgeting has faced criticism, leading researchers to explore alternative management control methods such as Beyond Budgeting. Despite its potential benefits, Beyond Budgeting adoption remains limited. AIM: This research investigates Beyond Budgeting's effect on Iraqi small- and medium-sized enterprise (SME) performance, focusing on competitive advantage. SETTING: The study targets Iraqi SMEs, considering their diverse business landscape. A random sample of 353 accountants was chosen from a research community of 22 974 individuals. SPSS and AMOS 26 software and a custom questionnaire were used. METHOD: The authors conducted multiple linear regression analysis and Structural Equation Modeling to address our study's objectives. Additionally, we utilised maximum likelihood procedures to assess factor loadings, construct validity and reliability. RESULTS: Beyond Budgeting implementation significantly affected both financial and nonfinancial performance. It demonstrated positive effects on cost leadership and competitive advantage differentiation. However, an indirect negative impact on nonfinancial performance was observed through the influence on cost leadership, suggesting a trade-off between cost reduction and other nonfinancial factors CONCLUSION: The study acknowledges limitations in sample size and the need for considering additional factors. Further research is required to understand Beyond Budgeting's limited adoption in Iraq. The study contributes valuable insights on Beyond Budgeting as a substitute for traditional approaches, benefiting managers and policymakers. CONTRIBUTION: This study emphasises Beyond Budgeting's significant impact on Iraqi SME performance, highlighting the relationship between Beyond Budgeting, competitive advantage strategies, financial and nonfinancial performance. The findings provide insights for enhancing budgeting practices in Iraqi SMEs.

Keywords : Beyond Budgeting; traditional budgeting; organisational performance; competitive advantage strategy; SMEs; small- and medium-sized enterprise; Iraq.

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