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1. Introduction
The business environment of large firms is characterized by uncertainty, shifting demographics, disruptive technologies, new industries and competitors and other challenges. (Raspin and Terjesen, 2007; Sandalgaard, 2012). Mainly due to the financial crisis of 2008 and the European sovereign debt crisis of 2011, the fluctuations of sales, procurement and finance markets have increased significantly. A tendency to increasing volatility and uncertainty cannot only be recognized at a macroeconomic level, but in single industries as well as in single companies. This increasing volatility is considered by Horváth as the biggest challenge of sustainable corporate management. In order to deal with this challenge, companies have to organize their systems of governance and control more efficiently (Horváth, 2012; Schäffer and Botta, 2012; Wulf et al., 2012).
Volatility, uncertainty, complexity and ambiguity (VUCA), has become the “new normal” business environment. A study by Simon Kucher & Partners states, as three quarters of surveyed managers claim, that VUCA has increased since the financial crises and will increase further (Kucher, Simon & Partners, 2011). Until this point, the budget has represented an important control system in almost all organizations (Hansen and Van der Stede, 2004) and has gained in importance (Rickards, 2008). Because of or perhaps despite this uncertainty, several studies confirm the continued increase in budgeting activities (Weber et al., 2010; Waniczek, 2012). But this overwhelming speed of change, as Friedman (2005, p. 46) calls it, leads to the classical dilemma of budgeting: despite the increase in their planning resources, companies struggle with their budgeting process and results and they experience a decline in the predictability of their budgets. Traditional budgets, appropriate for stable market conditions, cannot cope sufficiently with the prevailing volatile and uncertain environment (Hope and Fraser, 2003a). Beyond Budgeting, a new management paradigm established at the end of the 1990s, addresses this unfavourable development through the transition to a model of strong market orientation, production based on customer demand and self-organization with decentralized responsibility (Rickards, 2006). Budgeting should be abolished, replaced by rolling forecasts, long-term goals as an orientation and balanced scorecard based on outcome measures and performance drivers for self-responsible business units (Hope and Fraser, 2003b; Kaplan and Norton, 2003). The managers’ experience of self-responsibility, closely tied to an incentive compensation based...