Social capital and the budgeting process: a study of three organisations

This paper examines the budgeting process in three organisations that differ in their profit orientation and the industries within which they operate, using a social capital perspective. A qualitative case study approach was used. Semi-structured interviews were used to interview 38 managers involved in the budgeting process at the three case study organisations. The study highlights the importance of the social side of budgeting in organisations. Social capital arises through people working together and achieving more than they could working as separate individuals. An aspect of budgeting common to all organisations was the participation of interviewees in setting the budget. The social aspects of budgeting are not largely explored in the literature, and social capital theory is considered in order to shed light on this issue. The study provides insight for practitioners and policy makers on how social aspects influence (or not) the budgeting processes of organisations with different scopes.