The planning and budgeting systems of knowledge organizations: A case study at the internal audit department of Rabobank Group

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Master Thesis

The planning and budgeting systems of knowledge organizations: A

case study at the internal audit department of Rabobank Group

Author:

Sierd Wilkens

Student number:

1724495

e-mail adress:

sierdwilkens@hotmail.com

Telephone number: 06-17336615

University:

University of Groningen

Faculty of Business and Economics

Master of science in Business Administration

Specialization Organizational and Management Control

Supervision:

Dr. S. Tillema

Co-supervision:

Dr. E.P. Jansen

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Planning and budgeting can conjure up in the minds of many managers images of inaccurate estimates, produced in detail, which are never exactly achieved but whose shortfalls or overruns require explanations. (Churchill, 1984)

To assume that the events and their impact can be known and locked down into a planning and budgeting document is folly, but failing to plan because of uncertainty is an even greater folly. (Frause, 2009)

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Preface

After working for two years in different departments in different local Rabobanks this internship was a great opportunity to see a headquarter activity. Not only writing my thesis at HQ is a privileged, doing this at the audit department is the icing on the cake! The subprime mortgage crisis was associated with banking panics. The internal audit department is in the eye of this hurricane. Their main task is to help evaluate and improve the effectiveness of risk management, control and

governance process. After finishing the Bachelor Financial Services Management at the university of applied science (HBO) and now finishing the MSc BA Organizational and Management Control this was a unique opportunity to combine both educations during this master thesis.

In March 2010, I had a first meeting with Tjibbe Moed and Ad van Zanten. Tjibbe became my supervisor at Rabobank and Ad was always available when I needed information about anything or when I got stocked during research. All meetings with Tjibbe and Ad where very helpful and therefore I thank them. Most of all I would like to thank my supervisor Sandra Tillema for the help during the writing process. She gave me valuable advice and support always when needed. I would like to thank Pieter Jansen for the feedback on my thesis. Other important persons considering my thesis are Maurice Wennekes and Karl van Oostenbrugge whom I like to give special thanks for giving me an opportunity to be invited to participate in conducting an audit. I would like to thank all the Rabobank interviewees to share their knowledge and the best available information about the planning and budgeting system. At last I would like to thank my aunt and uncle, Pieta and Jan-Dirk, for staying at their home for half a year.

With this thesis, my study at the university and student life comes to an end. During the previous 8 years I have gained valuable theoretical and practical knowledge about many business related subjects. This knowledge is essential in my current job as financial controller.

Sierd Wilkens,

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Management Summary

A control system controls people. In knowledge organizations those ‘people’ are professionals and the key resource for the organization. Their behavior determines failure or success for organizations on a daily basis. Control of professionals is somewhat different than the control of non professionals. Flexibility, innovation and creativity is demanded from professionals, therefore the control system should not only control the professional but should also empower them.

The planning and budgeting system (PBS) is a control system. The PBS is an important means of accomplishing an assortment of organizational objectives. This thesis focuses on the operational PBS, which directly influences the professional in their daily work. The PBS has two major functions in many organizations. A planning function and a control function. Within those two functions the PBS is able, to coordinate operational activities, to motivate employees and to provide management oversight over operations.

The purpose of this research is to explain the role of planning and budgeting in knowledge

organizations. To answer the purpose of the research, a case study has been conducted at three sub departments of an internal audit department of the Rabobank group (ARG), a large financial

institution. The three sub departments, LB, SRG and GIS operate in different market and

independently from each other. All three sub departments have their own autonomous PBS. The internal audit department is a stereotype knowledge organization with a highly qualified workforce.

For a PBS to be effective it requires that there is an understanding of both the effect of changes in the design and the effect caused by the way the control system is used. This thesis investigates how different design and usage characteristics influence the effectiveness of the PBS among the three sub departments. Important design characteristics are: Initiation and participation; Should the plan and budget be prepared from the bottom op or from the top down? Planning period; When does an organization start and when does it complete the budget process? And decentralization vs.

centralization; how far is the PBS segmented to guide activities. Important usage characteristics are: Management style; an objective or subjective style of evaluating plan and budget targets, and Organizational culture; The influence of organizational culture, determined by concern for people and concern for performance, on how the PBS is used.

Initiation and participation; The researcher found that participation in preparing the plan and budget

is important at ARG because auditors know where to find opportunities, what weaknesses need to be addressed and thus what needs to be done. The amount of participation can be reduced when managements understanding of the auditing transformation process is high. Planning period; The researcher found the preparation time is generally longer at ARG due to high information asymmetry between reviewing parties and the designer of the planning and budget. The planning horizon was very different between the three sub departments because all departments operate in very different environments. Decentralization vs. Centralization; The researcher found a high degree of

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Organizational culture; The researcher found that there is a high concern for people. The concern for

performance varied between the departments.

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1. Introduction

1.1 The research problem

The planning and budgeting system (PBS) is a potentially powerful management tool that serves many functions, including a planning and a control function. On the planning side it is used for communicating instructions and on the control side it is used for evaluating what has been done (Churchill, 1984). Although planning and budgeting is a crucial activity for many organizations, it is often seen as an awkward process by management (Hansen, 2004). In many organizations, one frequent outcome of the planning and budgeting process is a lot of frustration (Frause, 2009). To reduce the problems of the PBS many researchers have spent a large amount of time to understand the PBS and to try to improve it (Hansen, 2004). However, this work has not been finished.

To get a better understanding of the PBS, it is a necessity to understand the employees using the system. A PBS does not operate by itself, people operate it. In the 1950’s, as much as 90% of the workforce (in developed countries) was classified as “non-exempt” (employees who had few skills and little education) and compromised subordinates who did as they were told. The “exempt” were the supervisors who did the telling. Today, highly skilled and highly qualified employees

(professionals) make up 40% and while they may have supervisors, they are not subordinates; they are associates. Within their area of expertise, professionals are supposed to do the telling (Drucker, 2002).

The PBS will need to ‘fit’ it’s environment (Hansen, 2004). This thesis will focus on the PBS in an environment where many professionals work. We name such an environment a ‘knowledge organization’. A study will be conducted at an internal audit department of a large financial institution. The internal audit department is a stereotype knowledge organization with a highly qualified workforce.

1.2 The research question

The purpose of this research is to explain the role of planning and budgeting in knowledge

organizations. This thesis investigates how different design and usage characteristics influence the effectiveness of the PBS.

Research questions:

What is the role of planning and budgeting systems in the control systems of knowledge organizations and how can this role be improved.

Research sub questions:

What are planning and budgeting systems and how do they fit into organizations overall control systems?

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What are relevant design and use considerations for a planning and budgeting system within a knowledge organization?

How is the planning and budgeting system designed and used in three different cases and what can be learned from their experiences?

1.3 Relevance of the research

The fundamental problem managers face is how to exercise adequate control in organizations that demand flexibility, innovation, and creativity (Simons, 1995). In this thesis this fundamental

empowerment vs. control problem is addressed. First, the work in knowledge organizations, which is to be performed individually styled, open-ended, creative, and highly demanding, cannot be

standardized or fully planned out in advance. Managers cannot tell their employees in detail how to do their jobs and monitor them with constant surveillance (Perlow, 1998). Second, the PBS is an important management control instrument in many organizations (Hansen, 2003). Therefore this thesis will contribute to the work of Simons (1995) in how to balance empowerment and control. This thesis will also contribute to the literature on PBS in general. There has been a distinguished amount of research on PBS in general. Attempts are made to improve or even abandon the PBS (Hansen, 2003). There are some success stories but major breakthroughs have not been made in practice. According to one of the most recent studies on this topic, minimizing some of the “pains” in a PBS is today’s solution for the majority of organizations (Frause, 2009). This thesis will follow this perspective. Most of the research concerning planning and budgeting has taken a rather narrow view on specific problems such as performance evaluation, coordination, or resource allocation (Churchill, 1984). This thesis intends to provide a broader and more adaptive framework, although it restricts itself to knowledge organizations.

1.4 Structure of the thesis

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2. Literature Review

In § 2.1 an overview of our knowledge on control systems is given. Section 2.2 discusses how PBS fit into organizations overall control systems, what the function of a PBS is, and what design

characteristics and usage characteristics of a PBS are. Section 2.3 will discuss the characteristics of knowledge organizations and how control is exercised over professionals. In § 2.4 the expected influence of knowledge organizations, on design and usage characteristics of the PBS, are discussed. The last section (§ 2.5) will summarize the results.

2.1 Control systems

Control systems involve managers taking steps to help ensure that the employees do what is best for the organization (Merchant 2007). This is a vital function because it is people in the organization who make things take place. Control systems are necessary to guard against the possibilities that people will do something which the organization does not want them to do or fail to do something they should do. It makes little sense to talk about the control process without reference to what they control; they control people.

The problem of organizations is the problem of obtaining cooperation among a collection of

employees who share only partially congruent objectives (Ouchi, 1979). Ouchi (1979) suggested that the type of control system appropriate in a given organizational context depends on two dimensions of task-related uncertainty; namely, ‘knowledge of the transformation process’ and ‘the ability to

measure outputs’.

Figure 1 Ouchi’s (1979) framework

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10 Implicit in his framework is the notion that agreement on organizational objectives exists. Knowledge of, and agreements on, objectives is a necessary condition for the design of any control system (Merchant, 2007). Employees must have an understanding of what the organization/department is trying to accomplish. In addition to the sort of controls, the scope of the control system is important too. Control systems can be viewed very broad (Simons, 1990, 1995). They encompass not only the measuring of progress against plans (to guarantee the predictable achievement of objectives). They also ensure that flexibility, innovation and creativity is demanded from employees. This broad scope enables, encourages or sometimes forces employees to act in the organization’s best interest (Simons, 1995).

The typology and scope of, respectively, Ouchi (1979) and Simons (1995) are a solid theoretical foundation for this thesis. This thesis analyzes a case study, therefore the control system typology of Merchant (2007) is included as well. Merchant (2007) provided an in-depth analysis of the

relationship between theory and practice. He characterizes four types of controls to reduce control problems. These four types are result controls, personnel controls, cultural controls and action

controls. Result controls are rather similar to output controls. Action controls are rather similar to

behavior controls and a combination of personnel controls and cultural controls is similar to clan control.

Theory offers several other ways to classify control systems (Anthony, 1988 Flamholtz, 1983). The typology primarily proposed by Ouchi (1979) and extensively sophisticated by Merchant (2007) provides a number of advantages for this thesis. Firstly, the descriptions of the variety of control processes in this typology are detailed enough to map practices into it. Secondly, its richness can be exploited within knowledge organizations. Finally, it can be applied to a subset of control systems and, in particular, to systems for planning and budgeting. Previous research successfully used this typology to analyze a specific part of a control system (Rockness, 1988).

Effective implementation of a control systems requires that there is an understanding of both the effect of changes in the design of the control system and the effect caused by the way a control system is used (Ter Bogt, 2000). In this thesis a distinction between those two aspects is made. The control system’s design characteristics are purely a formal technical matter. In this thesis the word ‘usage’ is used to reflect the fact that control systems are not only formal. Because organizations and organizational members differ, they will (and should) not equally make use of a control system (Hopwood, 1972). If an organization ‘Usage’ and its ‘Design’ are not synchronized, it is not likely that even a well integrated control system will actually influence behavior in its intended ways

(Flamzholtz, 1983). In practice it can be difficult to differentiate between the design and usage characteristics because system usage does not always strictly follow system procedures. This can occur due to either poor design or unanticipated perceptions of a control system (Cowen, 1990).

2.2 Planning and budgeting systems

2.2.1 Introduction

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11 on what to do without any link to financial aspects. This thesis will mainly focus on the operational PBS. At the operational level, contact with the professional takes place.Operational planning and budgeting has a role in directing employee’s behavior (Frausé, 2009). This thesis defines PBS as the system to direct future activities (clarify where the organization wants to go and how to get there) and the system to build employee’s commitment to those activities. This thesis will not focus on ‘capital budgeting techniques’, where investment (budget) decisions are made by determining the value of a project.

The PBS is one of the core control systems in overall organizational control (Flamholtz,1983). Flamholtz’s (1983) concept of core control systems presents an integrated structure of basic

organizational processes. According to Flamholtz (1983) the PBS compromises three basic elements.

A planning element: basically the system of deciding about the objectives to be performed as well as

the means to attain those objectives. An operational element: the ongoing system for performing the functions required for day to day activities. These are the responsibilities and activities specified in organizational roles. A measurement element: the system for measuring the performance used to monitor the extent to which objectives and standards have been achieved (Flamholtz, 1983). As stated, Merchant (2007) defines the PBS as part of the (financial) result control system. The plans and budgets become targets that are linked to performance evaluations and, in turn, various

organizational rewards. Therefore the researcher, adds a fourth basic element to the PBS; evaluation. Evaluation is the mechanism for performance assessment (Flamholtz, 1983).

A core control system is a narrow (cybernetic) interpretation of a control system (Flamholtz, 1983). It does not include personnel controls, cultural controls or other broader organizational control aspect. Since this thesis investigates how managers are attempting to balance empowerment and control, Simons (1995) broader scope will be discussed placing the PBS in an overall organizational

perspective. As a result, the PBS is a control system with four basic elements in an overall organizational perspective.

2.2.2 Function of the PBS

The term “Budget” and, to a lesser extent,“Planning” tends to conjure up in the minds of many managers images of inaccurate estimates, produced in detail, which are never exactly achieved but whose overruns or shortfalls require explanations. Even though PBSs are not flawless they have a major function in many organizations (Churchill 1984). Churchill (1984) states that PBSs have two primary functions: a planning function and a control function. Merchant (2007) divides the purpose of PBS in three different purposes, coordination, top management oversight, and motivation. Although both academics describe the purpose of PBS differently they are in essence quite similar, which will be explained next.

Planning: Many organizational benefits of the PBS are due to the process of developing the plans, or

making decisions in advance. Unless they are encouraged to do so, most people tend to become pre-occupied with their day to day work. The forward-thinking decision making process makes people pro-active instead of re-active and sharpens the organizations responses.

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12 organizational structure, the management and employees, and the tasks that need to be done to implement strategy. It translates the organization’s objectives and its implementation programs into period-oriented operational guides to company activities (Churchill, 1984). Management oversight increases due to the sharing of information across the organization (Merchant, 2007).

Control: A PBS is a pro-active form of control. Initially it sets out the objectives of the functional area

of the organization, in this way it is steering effort and behavior. Also it provides the standards to be achieved in relation to the objectives, and makes clear the level of effort and behavior expected from management and employees. In this way PBS can be used as a tool for motivating and evaluating employee’s performance, implementing a management-by-exception form of control (Merchant, 2007).

Especially large organizations need a sophisticated formal PBS for coordinative control purposes. Smaller companies have less need to plan or budget since they control their organization informal and more personally (Churchill, 1984). Another control function is facilitating top management

oversight. This supervision occurs as pre-action reviews; plans are examined, discussed, and

approved before actions are being made at successively higher levels in the organization (Merchant, 2007). A sophisticated well-functioning PBS can also protect against optimistic projections.

Achievable plans or budget targets protect the organization against the costs of optimistic revenue projections. The first step in planning and budgeting is usually preparation of activity forecasts, for example sales. Production levels are then geared to the forecasted level of activity. If the budget has an optimistic revenue projection, managers will be induced to acquire resources in anticipation of activity levels that may not be forthcoming. Some of these acquisitions decisions are at least partially irreversible, for example the expense to shed people (Merchant, 2007).

2.2.3 Design characteristics for the PBS

There is no universal “off the shelf” operational PBS. This design section describes some major PBS variations. The following design characteristics will be discussed: initiation and participation, planning period, and centralizations vs. decentralization.

Initiation and participation: Plans and budgets can be made from a top-down and from a bottom up

perspective. The top-down approach is imposed from the top of the organization with little input from the broader group of plan participants. This approach allows top management to put forward their wide-ranging views of the organization and its competitive and economic environments. Top management knows the objectives, strategies, and available resources for the company. The top-down planning and budgeting approach is favorable when employees must be given explicit performance objectives. This might occur due to financial distress in an organization. Top down approach is also necessary when the nature of the departmental activities demand close

coordination between different departments (Churchill, 1974). In this case, the knowledge necessary for good planning and budgeting generally resides at management level and not at employee level (Churchill, 1974).

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13 better able to anticipate towards changing environments. When using the bottom up approach, a planning and budget is prepared at the level for which it has to be implemented. This approach will evoke more commitment than one imposed from higher level management (i.e the top-down approach). In top down planning commitment decreases because imposed plans and budgets are according to employees often unrealistic and unattainable (Burchman 2005). Besides, when employees participate in planning and budget preparation they can be held accountable for their actions. This is especially the case for the long term performance measurement of the employee (Churchill, 1974).

The bottom up approach also has disadvantages. A major disadvantage is gamesmanship caused by information asymmetry between management and employees. Because individuals want to achieve their plans and budget targets, they may look for ways to protect themselves from the downside risk of missing plans and budget targets. For planning so called “sand bagging” can occur, creating a planning with plenty of stretch. Participation in the preparation of the budget has a similar disadvantage; the creation of “budget slack”. Budget slack involves the consumption of organizational resources by employees in excess of what is required. ‘Budget slack’ and ‘sand

bagging’ can obscure true underlying performance and it disturbs the right allocation of resources. As a result, company performance falls short of potential (Burchman, 2005). Slack has a positive side effect because it reduces tensions, increases organizational flexibility to change, and makes some resources available which can be used for innovation (Merchant, 2007).

Planning period: When does an organization start and when does it complete a planning and budget

process? Most operating plans and budgets are based on the passage of time, with revenues and expenses related to calendar periods. In many organizations operational planning and budgeting covers one year. There is not one best planning and budget period or interval. The period should fit the needs of an organization, in terms of its planning horizon and the time needed to prepare a plan and budget (Churchill, 1974). The size of the organization or department often a preparation

complication. The larger the organization, the more approval on operational plans and budgets are required from different management levels (Churchill, 1974).

The planning horizon is the length of time you can plan into the future with validity (Chenhall, 2003). External environmental dynamics are an important factor determining the planning horizon

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Centralization vs. decentralization: Environmental heterogeneity is the market expectation and

diversity of an organization (Chenhall, 2003). As the level of heterogeneity increases, the product or service portfolio increases and there is a greater need for a more decentralized PBS. In this situation the PBS should decentralize plans and budgets to better guide activities and assess the performance of the separate (sub) departments (Gordon, 1976).

2.2.4 Usage characteristics for the PBS

Design changes do not automatically result in changes in the ‘usage’ of a PBS (Ter Bogt, 2000). PBSs can be used in different ways. Different ways have a different impact on behavior of those using the system. The design of the PBS is important for organizations. However, case study evidence suggests that the use of information from the PBS can be even more significant than the design of a PBS (Ferreira, 2009). When a PBS is implemented this does not automatically mean that the people working with this system will use it equally and in the best interest of the organization (Ferreira, 2009).

In this section a focus will be on two important ‘usage’ characteristics of a PBS, management style and organizational culture. Effective cultural controls eventually create a stronger organizational culture (Killman, 1985). Culture fills the gaps between what is formally decreed by the organization and what actually takes place (Killman, 1985). Culture thus determines how the design characteristics will be interpreted. The manager, described in this context as management style, is the initiator in implementing a PBS. The management also stimulates employees to use the PBS in a particular way (Ter Bogt, 2000).

Management style: Management style refers to the technique on how the managers are controlling

the behavior of the employees. The manager must consider the consequences of his actions in terms of the kinds of behavior that he or she motivates in his or her subordinates (Cammann, 1976). For the evaluation element of the PBS two management styles are illustrative, the Rijnlandse

management style and the control technocrat management style (Weggeman, 2007).

Plans and budgets become targets that can be used for evaluation. The Rijnlandse manager evaluates employees in a subjective way. The use of subjective evaluations has the important advantage of enabling managers to correct for identifiable faults in planning and budget targets (Ferreira, 2009). Furthermore, research on the use of subjective evaluations has found that they are positively related to the level of training and the extent of interdependency between employees. However they have the disadvantage of permitting favoritism, perceptions of bias, and for creating uncertainty about evaluation criteria (Ferreira, 2009).

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15 make their performance indicators look more favorable while knowing the actions are having no positive effects on real performance, and might actually be harming it. The ability to play games with the numbers increases when the knowledge of the transformation process is low among those who evaluate (Merchant, 2007).

Organizational culture: Four different organizational cultures can be defined (figure 2).They are classified by two basic criteria, concern for performance and concern for people (Killman, 1985). Apart from the apathetic culture all other

cultures can be linked to the usage of a PBS (Killman 1985, Parker 2006). In a caring culture the PBS is frequently used for planning purposes and not for control purposes (Parker, 2006). The information provided by the PBS might give management an overview about the progress, however the PBS is not used to motivate employees (Merchant 2007, Churchill, 1984). For example, the PBS is

not used to provide individual planning and budget targets (Parker, 2006).In this culture teamwork is important and collective achievement of organizational objectives is the center of attention

(Weggeman, 2007). To achieve those organizational objectives effectively, synergies are created by multidisciplinary collaboration between employees. Compliance and cooperation are important behaviors (Killman, 1985). Moreover, the culture increases the flexibility of the organization and managers act like father figures.

In the exacting culture the PBS is used for control purposes (Parker, 2006). In the exacting culture the employees compete with each other, it is the “survival of the fittest. Generally, result controls are used to compare employees. However, when the ability to measure output is low, actions controls will be used (Ferreira, 2009). The PBS is used as if it is a cockpit. The “pilot” assumes to be ‘Major Tom’ when touching the sophisticated dashboard (Weggeman, 2007). Group commitment, shared values, family feeling etc. are all romantic concepts but not important for the PBS. Encouraging and stimulating employees takes much time that should be used to analyze work and progress. The information provided by the PBS can significantly help to make a (short-term) planning, to monitor progress, and to prepare performance contracts (Weggeman, 2007).

Organizations with an integrative culture use their PBS for both planning and control purposes. This culture focuses on long term result controls (Parker, 2006). When output is measurable, integrative cultures could use benchmarking. In the exacting culture the benchmarking is internal, in the integrative culture benchmarking is external. Performance is measured relative to the performance of other organizations facing similar business circumstances (Weggeman, 2007).In addition to individual rewards, group rewards are used to make the strengths of the employees productive and their weaknesses irrelevant. Those rewards are usually superior to market standards, because organizations with this culture are serious about attracting and retaining talented people (Killman, 1985).

Concern for performance

C on ce rn f or p e op le Caring Apathetic Integrative Exacting Low High H ig h Lo w

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2.3 Knowledge organizations

2.3.1 Introduction

Knowledge is an elusive concept that has been classified and defined in a variety of ways (Birkinshaw, 2002). In this thesis knowledge is defined as specific knowledge created and used by employees, or so called ‘know-how’ (Birkinshaw, 2002). The know-how of the employees working within the organization is the accumulated practical skills or expertises that allows them to do their tasks smoothly and efficiently. Professionals are employees with a lot of know-how on their field of expertise (Birkinshaw, 2002). Above all, professionals are not homogeneous, they are heterogeneous because their knowledge is specialized and unique (Drucker, 2002).

Knowledge organizations can be viewed from a number of perspectives. This thesis defines knowledge organizations as organizations where a substantial part of the employees are professionals and where the organization’s knowledge base (the employees) is a key resource (Drucker, 2002). Examples of knowledge organizations in this concept are law firms, research and development departments, audit firms, architectural firms, consultancy firms, medical practices and universities (Powell, 1999).

2.3.2 Characteristics of knowledge organizations

Mintzberg (1983) argued that the knowledge organization represents a ‘professional bureaucracy’, one of his five dominant organizational configurations. According to Mintzberg (1983) the key element of the configuration in knowledge organizations is the operating element, where the professionals provide services directly to clients. Many professionals are functioning in an autonomous way because they are working directly with their clients without much reference to other professionals in the organization (Mintzberg, 1983).

In a knowledge organization the organizational structure is very different compared to, for example, a large manufacturing firm. Instead of a traditional hierarchical division of labor, one encounters a more loosely coordinated set of individual professionals. The governance structure of accounting firms for example is based on partnerships with local offices as the principal place of business (Powell, 1999). Therefore, knowledge organizations are typically highly decentralized with different operating units loosely coupled to each other (Powell, 1999).

In general, knowledge organizations face turbulent and complex external environments. Consequently, they are experiencing considerable change and uncertainty in their external environment (Powell, 1999).This is one of the reasons why it is very difficult for the knowledge organization to formulate a coherent, organization wide strategy. In this context, strategy tends to be the accumulation of the initiatives of ‘professional entrepreneurs’ (Mintzberg, 1983).

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17 do not develop strategies independently from the professional but, rather, must flatter professionals to support and champion their initiatives (Powell, 1999).

In knowledge organizations the knowledge of the transformation process is often low. Managers and colleague professionals are not capable to analyze the tasks in the professional’s field of expertise. Therefore equivocally often occurs in knowledge organizations (Turner, 2006). Equivocally can be defined as the multiplicity or diversity of meanings conveyed by information about organizational activities (Daft, 1981). One of the solutions to the equivocally problems that knowledge organization face, is to underline cultural controls. When a thru common organizational culture (norms, beliefs, and organizational commitment) exists in an organization, information conveys through traditions so that equivocally is reduced (Turner, 2006).

2.3.3 Control in knowledge organizations

Control of professionals is somewhat different than the control of non-professionals. Academics have long questioned if action and result oriented control practices may be effectively applied to

professionals or whether they are intrinsically motivated, and thus intrinsically controlled (Perlow, 1998).

In knowledge organizations there usually are no well developed systems of action and result control. (Mintzberg, 1983). According to Drucker (1989) result controls are not necessary because

professionals are self-motivating, self-directing, and self-supervising. The knowledge organization cannot rely on action controls because the tasks in knowledge organizations require certain

capacities for planning, judgment, collaboration, and analyzing complex systems. The work demands the professionals to be flexible, creative, adaptive and responsive (Perlow, 1998).

Therefore, control in the ‘professional bureaucracy’ of Mintzberg (1983) depends on

(internationalized) values, personnel controls and cultural controls to ensure high quality work. However some things have changed since Mintzberg’s (1983) configuration about ‘professional bureaucracies’. Markets, in developed countries, for knowledge organizations have been deregulated and clients are increasingly sophisticated and demanding. In addition, previously the professionals in knowledge organizations were more often the owners, managers and practitioners. In the last decades professionals work more often in larger organizations where they are salaried employed (Perlow, 1998). According to Covaleski (1998)the simple interpretations of intrinsic motivation therefore fails to recognize today’s understanding of mutual forms of result/action and intrinsic control in modern knowledge organizations. In his article he states two interesting quotes of a professional working in one of the big four audit firms.

Every year when they called you in on your review, it’s always, “Well, you did wonderful this year. Now, what are you going to do, to do twenty percent more next year?” Felt great the first couple of times they said it, but by your sixth or seventh year, and you’re doing twenty percent more every year, there’s got to be a point when you say, “Gee, how much more can I do?“ (Covaleski, 1998, p293) I’ve become chargeable [ i.e I have become identified as revenue stream] (Covaleski, 1998, p293)

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18 motivated due to result controls. However, Covaleski (1998) explained that beyond the point, where the professional ‘identified himself as a revenue stream’ he was no longer accepting to discard professional autonomy for the greater good of the organization. Covaleski (1998) figured out there is a difficult relationship between professional freedom, calculability, and identification.

Covalenski (1998) argues that control in knowledge organizations occurs in a complex field of first stimulating employees to become entrepreneurial empowered knowledge workers and second result and action controls on the contrary to ensure employees duplicate organizational objectives. In practice the second often prevails, professionals are explicitly and implicitly turned into so called “corporate clones”. This often happens in large organizations where all employees, including the non professionals, are controlled in an action or result way (Covalenski, 1998). By reducing the

professional freedom to much the professional is lacking creativity and motivation (Covalenski, 1998). Weggeman (2007) illustrates this by starting his book with the following quote ’Professionals

are creative and intrinsically motivated, until they meet their boss’

As mentioned, the work demands the professionals to be flexible, creative, adaptive and

responsiveness, which might be flawed when empowerment is lost (Perlow, 1998). A sophisticated control system should be made in a way that whether a professional is motivated by genuine commitment to the organization or by self-interest, the professionals behavior will be in the best interest to the organization (Perlow, 1998). To achieve genuine commitment to the organization, the control system should be paying attention on personnel and cultural controls (Perlow, 1998). Drucker (1989) also argues that a manager should not emphasize to much on result controls but support and trust the employees. In addition, the manager should stimulate and motivate in a way that a

professional will not lose commitment to the organization (Drucker, 2002).

2.4 Expected characteristics of the PBS in knowledge organizations

In the previous sections the PBS characteristics and knowledge organization characteristics have been identified. With this information the theoretical framework can be build. This framework includes the expected design and usage characteristics of a PBS in a knowledge organization. 2.4.1 Expected design characteristics

Initiation and participation: Simple top-down or bottom-up approaches for planning and budgeting

are rare. The decision is not whether to choose for top-down or bottom-up, it is rather how much of each sort is suitable (Churchill, 1984). According to Drucker (2002) especially professionals are often held responsible for information sharing and (continuous) innovation. The professionals know where to find opportunities, what weaknesses need to be addressed and thus what needs to be done. Therefore their input in the planning and budget formulation is needed. They are capable to decide courses of action and targets for their department and they should decide where to allocate the resources (Drucker, 2002). As a consequence the bottom-up approach is expected to be appropriate for knowledge organizations since it uses the professional’s detailed knowledge on his/her field of expertise. However, when the bottom up approach dominates, management might lose oversight and coordination of activities (Churchill, 1984).

Planning period: The planning period should fit the needs of an organization, in terms of its planning

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19 dynamics is an important factor to determining the planning horizon (Chenhall, 2003). Because the environmental uncertainty is on average higher in knowledge organizations, the planning horizon is expected to be short. In his article, Neely (2001) listed the 12 most cited weaknesses of budgetary control. One of the weaknesses is that plans and budgets are outdated. Therefore the planning horizon should be aligned with the planning period.

Although the planning horizon might be expected shorter, it is expected that knowledge

organizations require more time to put their plans and budgets together. There are two reasons for this longer preparation time. Firstly, more often professionals work in larger organizations. Large organizations have log planning and budget procedures because they go through many management layers and planning cycles to translate the strategy into operational plans and budgets (Merchant, 2007). Secondly, the high amount of information processing during the preparation of the plan and budget costs extra time. There is a high information asymmetry because the knowledge of the transformation process is generally low in knowledge organizations (Daft, 1981). Another most cited weakness of the PBS is that plans and budgets are based on unsupported assumptions and

guesswork.

Centralization vs. decentralization: For two reasons, it is expected the PBS should be designed

decentralized. Firstly, knowledge organizations are typically highly decentralized with different operating units loosely coupled to each other. Secondly, the work of professionals is highly demanding.

It may appear to be a very complex, time consuming process for organizations to make an effective decentralized planning and budget. Cowen (1990) noticed it does not need to be so. This is because many organizations already apply a decentralized principle when they design incentive

compensations systems for employees and managers. Another advantage is that the professionals do not have to assess, and agree on, plans and budgets that are not directly related to their work (Cowen, 1990).

2.4.2 Expected usage characteristics of the PBS

Management style: The work of professionals is heterogeneous, the tasks are specialized and the

outcome is unique. In general knowledge of the transformation process is low among managers in knowledge organizations. The combination of these factors make objective (formulaic) planning and budget targets inappropriate as an evaluation element. Verbeeten (2001) concluded similarly, as he noticed that a low knowledge of the transformation process was associated with a reduced emphasis on meeting planning and budget targets. Verbeeten (2001) stated that when managers did not understand the exact process of the transformation, this negatively influenced their ability to evaluate their subordinates and to convince them about the necessity to meet plans and budgets. Therefore, objective planning and budget targets should play a minor role in evaluation and thus the subjective style of target evaluation (i.e the Rijnlandse management style) is expected to be

appropriate for knowledge organizations.

Organizational culture: In §2.2.4 three different cultures are mentioned, they are defined by concern

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20 (Killman, 1985). Losing the experience and knowledge of a professional can be seen as capital

destruction. Hiring new professionals (with the experience and ‘communal’ network) is very expensive (Drucker, 2002). For that reason the exacting culture is expected not to be successful in knowledge organizations.

The two remaining cultures are Caring and the Integrative. Organizations with a caring culture use their PBS for both planning and control purposes. Organizations with an integrative culture use their PBS for planning purposes. According to Covaleski (1998) the professional should not be controlled to tight. In such a case the professional will not accept to discard their professional autonomy.

Moreover, empowerment can be lost, which makes people feel undervalued (Neely, 2001). A manager should not behave contradictive but more counterbalancing towards the professional (Van der Knaap, 2009). When performance begins to move in an undesired direction it is time for

managers and professionals to meet and to develop solutions to the problems that have come up (Cammann, 1976). Therefore, predetermined planning and budgets targets should play a minor role in evaluating the professional and should play a major role for problem identification (Parker, 2006). It is also important for professionals that they are trusted and supported because creativity and initiative is essential in knowledge organizations.

With these remarks the caring culture seems to be the best culture. When directing towards a caring culture, the organization should be convinced that the professionals working for them are

intrinsically motivated (Covaleski, 1998). However, Covaleski (1998) also noticed that professionals are positive towards a sort of task setting and performance measurement because they obtain recognition and appreciation from it. Therefore, when knowledge of the transformation is medium or high and progress of plans and budget targets is measurable, the integrative culture is expected to be suitable to.

2.5 Summary of the literature review

In this chapter the theoretical building blocks for an effective PBS in a knowledge organization have been placed. During this chapter the characteristics of PBSs (§ 2.2) and knowledge organizations (§ 2.3) have been discussed. Combining those two (§ 2.4) resulted in an expected PBS for knowledge organizations that will be the starting point for the empirical study.

A summary of those design and usage characteristics are shown in figure 3. Initiation and participation is expected to be high because the knowledge of professionals is crucial for the organization. The planning period is depended upon the preparation time and the planning horizon. The preparation time is expected to be longer due to a higher information processing between management and professionals and increasing larger knowledge organizations. The planning horizon is expected to be shorter because in general the environment is rather uncertain in knowledge organizations. The PBS is expected to be decentralized due to loosely coupled departments and heterogeneous tasks in knowledge organizations.

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Figure 3: Design and Usage characteristics in knowledge organizations

In this chapter the answers have been presented of the first three sub research questions. However the fourth research question, How is the planning and budgeting system designed and used in three

different cases and what can be learned from their experiences, is not yet answered. To figure out

the answer an empirical research will be conducted. Before starting the empirical research, firstly the glue that holds the empirical research structured will be described; the research design.

Organization type

Characteristic

Expected PBS characteristics in knowledge organization

Design Characteristics

 Initiation and participation High participation, primarily bottom-up planning and budgeting

 Planning period Preparation time longer,

planning horizon shorter

 Centralization vs. Decentralization

Decentralized

Usage Characteristics  Management style,

evaluation of planning and budget targets

Subjective evaluation, conform Rijnlandse management style

 Organizational Culture, planning or control function of the PBS.

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3. Research Design

3.1 Introduction

This chapter describes the research design used to answer the research question:

“What is the overall role of planning and budgeting systems in the control systems of knowledge organizations and how can this role be improved.”

So far, the literature showed that it requires an understanding of the design and usage

characteristics of a PBS to be able to improve it. By conducting an empirical research, in the form of a case study, the author tries to understand the design and usage characteristics of a PBS in knowledge organization in practice. The case study is based on an in-depth investigation to explore causal relationships in order to find underlying principles. When conducting a case study it is possible to get a deeper understanding of the question “Why” certain choices about the PBS have been made in the organization (Baxter, 2008).

3.2 Case selection

The empirical research is conducted at the Internal Audit department of the Rabobank Group. The Audit Rabobank Group (ARG) department is one of the largest internal audit departments in the Netherlands. ARG consists of four sub departments: a staff department Global quality control (GQC) and three line departments, Local banks (LB), Support Rabobank Group (SRG) and Group and International Services (GIS). In figure 4 a graphical overview of the audit department is given. Although some aspects of the control systems are similar, the three ‘line’ departments have their own operational PBS.

Figure 4: Organogram Audit Rabobank Group

One of the main reasons for selecting Rabobank ARG is because they are a real example of a

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23 Others, who do not have an auditing background or education, are experts in a certain banking area. They have a broad knowledge in a specific domain.

Another reason for selecting ARG is that all line departments have an autonomous PBS. When studying the PBS in one of the largest internal audit departments (190 FTE) in the Netherlands, it is interesting not only to examine the difference between theory and practice, but also to analyze the differences between the sub departments of ARG. All three departments operate in a different type of markets and perform different types of audits. Moreover, all three departments have their own autonomous PBS. However, although PBS is different, the mission of any auditor at ARG is equal; advising about, and evaluating, the customers product, system, process etc. These circumstances are ideal for an exploratory research, to find relations and differences between characteristics (Baxter, 2008). The case is described per department. Therefore this thesis is a multi case study instead of a single case study.

3.3 Data collection

This exploratory research will provide qualitative evidence collected from document reviews and from in dept and semi structured interviews. Semi structured interviews allow for better

understanding of the planning and budgeting design and usage since the questions mainly consist of

why rather than what or how. In depth interviews have the opportunity to explain any vagueness

(Baxter, 2008). This empirical research consists of two phases. The first phase is a preliminary research and the second phase is a the multi case research.

3.3.1 Preliminary research

The purpose in the preliminary research is to collect some basic information to get an understanding about the operations at ARG, the organizational structure and the decision making authority. The researcher was attached to two different audits, one at the SRG department and one at the LB department. During this period he experienced how operational planning was used at SRG and how the planning and budgeting was prepared at LB. With this knowledge and information the researcher could asses which documents to review and which interview questions should be asked to get the right answers during the multi case research.

3.3.2 Multi case research

Many design characteristics are gathered from document reviews and interviews with members of the GQC department. For the three line departments, as a rule, the interviewees included at least one manager and at least two auditors per department. The manager along with the auditor can describe the planning and budget usage characteristics. The manager can explain the reasons for choosing a particular PBS design. The auditors can identify the advantages and disadvantages they experience with the design and usage characteristics. A few extra interviews are conducted

depending on the departmental structure and to clear any vagueness. Therefore at SRG, an account manager was interviewed and at LB an auditee (the customer) was interviewed.

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24 interview and they were able to give feedback. For subjective topics, such as the organizational culture or management style, both managers and auditors where being interviewed to get an objective view. In sections where critical remarks are given discretion is guaranteed.

3.4 Data analysis

The data is analyzed in two different phases. In the first phase (section 4.2) the actual design and usage characteristics of the PBS are analyzed per department. Moreover, the reasoning for having specific planning and budget characteristics will be discussed in this phase.

In the second phase the results will be confronted with each other and with the literature discussed in chapter two. By identifying and explaining similarities and differences the researcher seeks to provide further insights into issues concerning the PBS in knowledge organizations, and hence (analytically) generalizing the case study results. Thereafter, the last sub-question can be answered:

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4. Analysis / empirical research

In § 4.1 a general introduction of the profession of auditor is given. In addition, some key differences between the three departments are specified and the influence of the strategic PBS on the

operational PBS is given. In § 4.2 the PBS design and usage characteristics are defined and the reasoning for choosing the particular method is specified per department. Section 4.3 will confront the results of § 4.2 with each other and with the literature discussed in chapter two. The specific characteristics of knowledge organizations and their expected influence on the characteristics of the PBS are analyzed in this section.

4.1 Introduction

Internal auditing is an independent, objective assurance and consulting activity intended to add value and improve the organization’s operations. Hence, the ARG helps the Rabobank organization to evaluate and improve the effectiveness of risk management, control, and governance processes. The auditors are in this perspective ‘the professionals’. They are employed by the bank to perform the internal auditing activity. At least 95% of the auditors have an academic degree. Many of them have a post academic degree in a specific audit profession. The auditors at ARG can roughly be divided into four different fields of expertise; financial auditors, operational auditors, EDP (Information Technology) auditors and compliance auditors. Although they are specialized, the aim of each profession is the same; evaluating and advising.

Every line-department of ARG has to perform financial, compliance, EDP and operational audits. However, they execute audits in different domains. The LB department is responsible for the execution of audits at independent local banks. GIS is responsible for auditing the banks abroad, the corporate client banking department and the financial report of the Rabobank Group. SRG is

responsible for the execution of audits for the headquarter activities. Examples of headquarter activities are product development and the ICT infrastructure. The departmental context between the three departments is quite different. The ability to measure output, the knowledge of the

transformation process and the stability of the environment is high at the LB department, medium at the GIS department, and low at the SRG department. These differences in context will results in different operational PBS characteristics.

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26 for hiring external auditors or specialists. Although the line departments have an autonomous

operational plan and budget, on ARG level there are some rules about the content of the plan and budget. The plan should be based on the I.I.A (Institute of Internal Auditors) standards to make sure the audit plan has an adequate audit coverage (i.e. risk coverage). Compliance with these standards is necessary for ARG to meet the quality requirements regarding internal auditing set by external parties, such as the external auditors, the Dutch Central Bank and rating agencies. One of the I.I.A standards is that the input for any audit PBS is based on a risk analysis. Consequently, before preparing any operational plan, a risk analysis takes place.

4.2 The PBS characteristics

The design and usage characteristics are explained per case. At the end of this section an overview of the results is shown in a table (figure 11).

4.2.1 Local banks

The LB department is responsible for the execution of audits at independent local banks. A flow chart (figure 5) is given to represent chronologically the process between initiating the planning, the first boxes, and executing the audits, the last boxes.

Figure 5: LB audit flow chart

Initiation and participation: The expertise teams consist of auditors who conduct audits at local

banks. Twelve of the 54 auditors who are working at local banks are a member of such an expertise team. In general those are the more experienced auditors. Every expertise team is preparing an operational audit plan which is segmented into audit topics. They also make a prognoses of the budget required per audit topic. Those plans are combined by the manager of the expertise teams. With this information he makes one single audit that can be used for every local bank. Such an uniform audit includes the most important topics of all the plans of the expertise teams. Both the expertise teams and the expertise team manager set up the plan and budget. This makes the PBS mutually bottom up and top down.

The expertise teams have a wide role within the organization. They also have audit experience ‘from the field’. Their know-how ensures the quality of the operational planning. The manager expertise teams is combining audit themes from different expertise teams. Creating synergies and highlighting certain topics is the reasoning behind the top down approach. For example this year, one of the topic

Expertise team A Expertise team B Expertise team C Expertise team D

Audit teams A-E

District North District West District South

Manager Expertise teams

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27 is credit risk. As a result the manager expertise teams combined the credit risk audit for private banking mortgages (from expertise team A) with the credit risk audit for personal banking mortgages (from expertise team B). In this way the total budget can be reduced and a specific theme, namely credit risk, is highlighted.

Planning period: The uniform audit, plus the available budget, is then sent to the manager of a

district (Figure 5). Every district contains circa 50 banks. The district managers have a policy about the frequency of ‘auditing’ a local bank, determined by the risk performance of the local bank last year. The risk performance is based on the results of the previous audits. When results were negative, a bank will more frequently be audited. Consequently, the amount of ‘customers’ in a district is already known one year ahead. In addition, the district manager is analyzing quantitative data about current operations of local banks. By doing so a prognosis about the workload, the number of banks that might perform badly this year, can be roughly estimated for two years ahead. This predictable environment and uniform audit causes the planning horizon to be in between one and two years. The actual plan and budget is made once a year, in September, for the upcoming year. This is necessary because every year approval on plans and budgets is required from the GQC department once a year. In addition, strategic planning and budgeting is done once a year. Like to all Rabobank divisions, requesting budget from the Board of directors is done once a year.

The reason to plan up to two years is because it can be estimated rather accurately. The long planning horizon increases the ability to anticipate on impending dangers. An example of an impending danger is the lack of qualified auditors in the future.

Centralization vs. Decentralization: Although all expertise teams make their own PBS, in the end

there is only one centralized PBS. This is not remarkable since the market is very homogeneous. The audit planning of the expertise teams contains about 80-95% recurring audits for which the content only slightly changes throughout the years. Quite a lot of those recurring audits are compulsory to perform by the I.I.A standards. The service provided, the uniform audit, is sufficient because the products and services of local banks are similar to each other. The reason to make a centralized PBS is because of its simplicity. With the current centralized PBS, activities can sufficiently be guided.

The management style: Eventually an audit team performs the audit. The auditors at LB continually

work in the same audit team and are managed in a control technocrat style. The auditors working at LB have individual and team targets, fixed targets and flexible targets, almost all measurable and set by the district manager. An example of a flexible team target is the comparison of teams by the average amount of resources necessary to conduct the audit. An example of a fixed individual target is that 85% of the forms in the IT planning system need to be filled out (correctly). At last, an

auditor’s individual targets become more tight each year.

There are three reasons why management prefers the controlled technocrat management style. The high measurability of output is one of the reasons for using objective evaluation methods. Another important factor is the physical distance between the manager and the audit teams. Mostly district manager meet audit teams only once a month.

Organizational culture: The information provided by the PBS is used by expertise manager for

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28 The district manager uses the PBS for control purposes. The plans and budgets function as target standards that should be achieved.

The auditors in the LB department classify the culture in their

department as ‘Integrative’ (figure 6). Although the district managers put pressure on them to perform, the auditors get many personal development opportunities. For example, they are allowed to spend 20% of their time to indirect work related issues, such as education and training programs.

4.2.2 Support Rabobank Group

SRG is responsible for the execution of audits for the headquarter activities. A flow chart (figure 7) is given to represent chronologically the process between initiating the planning, the first boxes, and executing the audits, the last boxes.

C o n ce rn f o r p e o p le Caring Apathetic Integrative Exacting Low High H ig h Lo w

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Figure 7: SRG audit flow chart

Initiation and participation: The account auditors at SRG prepare solely an audit plan and budget for

their business (i.e. their customers). The input for the planning and budget is based on the account auditor’s self made risk analysis of the business. During the process of making a risk analysis, the account auditor is compulsory to be counseled by non account auditors. This bottom up approach, where the account auditor decides upon the content of the operational plan, is chosen because account auditors have a high knowledge of the business and they have knowledge of the profession. Every audit is eventually performed by an audit team (figure 8). The audit team involves the account auditor and two or three non account auditors. Audit teams change every audit. The “normal” auditors are given quite a lot of influence to choose the audit they want to work on. Every quarter they sign up for audits they favor.

Planning period: Although account auditors are free to decide about the content of the plan, they are

not free to determine the timing of preparing the yearly plan and budget. Like all departments, in September they have to prepare the plan and budget for the upcoming year. According to the account auditors, preparing this yearly plan and budget is done purely intuitive and rather inaccurate. This is inaccurate because the environment at SRG is very uncertain. The range of the planning horizon is determined three to six months.

Besides the yearly inaccurate planning and budget process, four time a year the account auditor update their plan. Due to the changing environment, throughout the year some planned audits will become unnecessary while other unforeseen risks appear and therefore audits have to be added to the planning to retain an adequate audit coverage. These update moments are rather informal an therefore there is no quality check by the GQC department.

Centralization vs. Decentralization: The manager eventually receives the updated plan and budget

from the account auditor (figure 7). He is responsible for creating audits teams and to divide the audits amongst them. This is a very difficult puzzle each quarter and often the puzzle cannot be solved. This problem is caused by the heterogeneity of SRG. The 27 auditors have to audit seven different businesses. The business ‘market expectations’ are high. The businesses are expecting from

Accountauditor (Business A) Accountauditor (Business B) Accountauditor (Business C) Accountauditor (Business D)

Manager (A pool of auditors)

Audit Pl. & Bud. Audit Pl. & Bud. Audit Pl. & Bud. Audit Pl. & Bud.

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30 SRG to perform a number of ‘ad hoc’ audits throughout the year. If today a huge debit card scandal occurs, an audit on this subject should be able to start tomorrow. The high heterogeneity causes another planning process problem. There are often only one or two auditors who are capable to conduct a specific audit. Sometimes the ‘customer expectations’ go beyond what the SRG auditors are specialized in. In this case the account auditor needs to hire external specialists to performing the audit. The heterogeneity at SRG is the reason for a very decentralized PBS. In total there are seven different PBSs at the SRG department.

The management style: The management style of SRG is hard to describe. Two of the four manager

of this department are new and thus the interviewees have problems describing the current

management style. To generalize it could be said that apart from a few objective figures, evaluations are primarily subjective. Especially ‘membership’ and ‘teamwork’ determine promotion

opportunities. Therefore the Rijnlandse management is the style among the new management. It should however be noticed that a year ago, auditors at this department would definitely define the management style as control technocrat.

Organizational culture: The auditors and account auditors (Red star, figure 8) in the SRG department

classify the culture in their department as ‘Caring’. In recent years they have seen their

organizational culture change towards a more ‘integrative’ culture. They also expect this change (i.e. towards performance and a slight lower

concern for people) to continue.

Some auditors believe that the emphasize on performance has led to a slightly lower concern for people. The management (Blue star, figure 8) place the culture more integrative and the new management intends to reach a higher concern for performance. To achieve a higher performance, management wants to get

more grip over operations (i.e increase the knowledge of the transformation process). At the moment the management at SRG is investigating whether there are trends in auditing at their department. With this information they want to be able to break the relaxing working atmosphere during the first quarter of each year.

4.2.3 Group and international services

GIS is responsible for auditing the banks abroad, the corporate client banking department and the financial report of the Rabobank Group. A flow chart (figure 9) is given to represent chronologically the process between initiating the planning, the first boxes, and executing the audits, the last boxes.

C o n ce rn f o r p e o p le Caring Apathetic Integrative Exacting Low High H ig h Lo w

The planning and budgeting systems of knowledge organizations: A case study at the internal audit department of Rabobank Group

Master Thesis