Hotel Budgeting in a Multinational Environment: Results of a Pilot Study

Abstract

In order to simplify the planning and control function for foreign and domestic operations, most multinational firms have put standardized and complex budgeting systems into effect. Whether or not the systems are used as intended is an unanswered question. The results of a pilot study of a multinational hotel firm indicate that as a general manager's perception of environmental uncertainty increases, a standardized budget system may be utilized in its most simplistic mode. Results also indicate that this action does not adversely influence performance. These findings contrast sharply with the prevalent trend of establishing standardized and complex budget systems throughout an organization without regard to the operating environment.