Oscar J. Holzmann

Strategy, budgeting, and crisis in Latin America

Abstract This empirical study investigated the relationship between business strategy and budgetary usage, given perceived crisis in Latin America. Using the strategy typology of Miles and Snow (1978) , it was hypothesized that the Defender and Reactor strategy usage would be positively associated with Crisis while the Prospector and Analyzer strategy usage would be negatively associated. Employing LISREL analytic techniques, study results supported these relationships (although an alternate analysis supports the possibility that Defenders and Prospectors enact their strategy to be consistent with their Crisis perceptions). Further, though relationships between all strategy types should be related to Budgetary Usage, results indicated that the only significant relationship was between Prospector and Budgetary Usage. Though these results are consistent with the literature and have implications for budgeting practice in Latin America, additional research is needed.

Update: Mergers and intangible assets

More than a year ago, the Financial Accounting Standards Board (FASB) proposed sweeping changes in accounting for intangible assets in business combinations. But pooling may be tougher to kill than the FASB anticipated. The author gives us the latest developments.

Central American budgeting scorecard: Cross cultural insights

Abstract This study surveyed U.S. and Central American business persons to determine the effect of cultural differences and/or environmental factors on budget attitudes and practices. The results suggest that the role of cultural differences may be minor. The stronger Central American views on adjusting for inflation, budgets as reflecting certainty, and as financial limits seem to reflect coping efforts related to concern about international competition, threatening conditions, and overall sense of crisis. Thus, the findings suggest that environmental conditions, not cultural differences, would have the greater impact on budgeting.

Central America: The effect of organizational complexity, competitive fears, budgetary workrole importance and budget criticality on budgetary motivati☆☆☆

Abstract Changing trade relationships have led to concern about new competition and Latin American accounting practices. This study of Central American businessmen investigates the effects of competitive fears and organizational complexity on the importance of ones budgetary work, budget criticality, attitude toward one s budget and budgetary performance. A LISREL analysis found that fear of local competition was significantly related to importance of ones budgetary work and budget criticality, organizational complexity was also related to budgetary work importance, and that as ones budgetary work and budgetary criticality increased in importance, one had a better budgetary attitude and budgetary performance. Surprisingly, fear of international competition was not significantly related to other experimental variables. The results were consistent with other findings in an Anglo-American context and suggest that budgetary practices are similar in both cultures.

M&A accounting: FASB calls for ban on pooling

The Financial Accounting Standards Board (FASB) wants to ban an accounting method that has spurred many mergers and acquisitions (M&As)—pooling. The Board also wants to make significant changes in accounting and reporting for intangible assets. The author discusses the impact of these latest developments on accounting for business combinations and other areas.