Food Processing Technology and Methods for Cereal

Food Processing Technology and Methods for Cereal Most of the principles of making breakfast cereals are similar to all products. Trix cereal is made with corn. The process of converting corn into the delicious product many children as well as adults will be discussed in this section. The corn from the field is dried milled, sifted and cleaned to separate the germ from the bran, oils and debris collected from the field and the milling process. The goal of this separation is to get to the endosperm where most of the starch that will be used for production is located. Most cereals produced are produced as flakes. Prior to flaking the grits are cooked and mixed with sugar, malt syrup, proteins, and salt into a large amount of water to create what is called cooking liquor. This cooking liquor provides the Milliard reaction that occurs during cooking and is what provides most of the flavor to the flakes or in the case of Trix, corn puffs. This mixture is loaded into a cylindrical industrial steam pressure cooker for about two hours at a 15-18 psig steam pressure (Smith Hui, 2004). In the case of Trix the cooking process is done by puffing. Puffing is done either through high temperature ovens, guns or extrusion. The use of any of these three methods is to expose the moist grain to high temperatures where its moisture will be converted to steam. The steam released by the grain expands and puffs the kernel. Prior to placing the grits into any of these three methods, the grains are delumped in lump-breaking machines which incorporate large volumes of air. The air supplied through the machine helps with the cooling of the product. The cooling of the grit in the lump-breaking machine helps with the initial drying step of the process of making ready to eat cereal. Grits usually have a moisture content of 28-34% (Smith Hui, 2004) are dried to about 14-17% through the use of forced air dryers at a temperature of 250 °F (Smith Hui, 2004). Once the grains have gone through this initial drying, the grains are controlled cooled to 100 °F to prevent hardening of the grain and to allow the grain to return to ambient temperature. (Smith Hui, 2004). Once the grain is dried to the moisture levels desired, the grain is tempered. Tempering of the grits takes about 2-3hours, helps reduce the darkening the product that occurs during Milliard reactions, and allow the grit to retrograde. This process uses temperature of 80o F and increases the firmness of the cooked grit (Smith Hui, 2004). From this point the grit is ready for flaking, shredding, or any of the methods of puffing grits. General Mills utilizes puffing guns to make Trix cereals. The science behind the puffing gun utilized by General Mills and some of its competitors, works by introducing the grains to high (500-800  °Ã‚  F) temperatures. This high temperature evaporates the moisture within the granules creating a steam pressure build up (100 to 200 psi) inside the chamber. When this pressure is released the moisture attempting to escape the grain, causes the endosperm to expand and simultaneously puff. Puffing guns have come long ways from when they were first introduced in the cereal business. Today General Mills utilizes a continuous puffing gun systems and extrusion puffing. Continuous puffing guns work the same way as it predecessors. The continuous gun contains a rotating cylinder that is set a specific angle. The cylinder is heated either by gas flames or electrically, and it is fed through a rotary valve. The pressure in the cylinder remains constant via the exit, thus continuously discharging the product. The contents explode into a bin provided with a floor opening leading to a conveyor belt. The product is directed to a rotating heating cylinder to dry, and then cooled. At this point the product is visually inspected for stickiness and color and sent to the packaging line. Direct expansion or extrusion puffing is the other method used by many cereal manufacturers. This type of technology was received with open arms by the cereal industry because it allows the combination of the steps in the process into one. Cereals ingredients are introduced in one batch into long barrels equipped with single or twin screws. The screws mix, shear, and pressurize the barrel and transport the â€Å"dough† to a forming die. As the mixture flows through the extruder, vitamins, flavors and colors are introduced and then the mixture exits through the die. The same principle of the puffing gun is applied to extruders. As the moisture vapor expands and the excess pressure is released, the volume of the mixture increases. The temperature in the barrel increases the mixture to about 300o-350 o F and the pressure to about 350-500 psi at the die head. As the dough exits through the orifices of the die, it is sliced off in to the different shapes and the slices expand immediately. Despite this quick expansion, the pieces still maintain moisture content of about 27% and are further dried on vibrating screens in hot air puffing ovens where the final cooking of the product occurs (Smith Hui, 2004). Pieces are inspected and sent to the packaging line. Although extruded and gun puffed mixtures products are enriched and fortified during the cooking process, the puffs receive a final spray of vitamins, sugar and flavors inside rotating spray drums. Both final sprays assist with the reduction of lipid oxidation and moisture which improve the overal l quality of the product as it relates to its texture and crispiness. One aspect of producing cereal is its quality. The cereal industry uses multiple methods to assess the quality of its product during the production process. The biggest issue for a good cereal product is moisture. Moisture is measured through near infrared analysis (NIR), wet chemistry, and image analysis. During the process the product the raw material is analyzed for moisture to ensure it can be flaked, shredded, shaped, maintained for control of oven temperatures, and to control the sugar content applied to the product. This type of testing can also be done to the final product where the fat, sugar, and moisture are analyzed to ensure the operation is working at optimum conditions. These test is necessary due to any unacceptable moisture content could lead to poor product quality as well as possible bacteria growth. At present, cereal industries are performing little or no analytical testing, and are relying on the vendors to provide them with highest quality level of product for their market. This can present a problem in production process. Despite the fact that the cereal industry does little or no analytical testing, most of the moisture content testing is performed as the product exits the oven using a 16 hour vacuum oven method or a moisture balance method (Unity Scientific, 2014). According to Unity Scientific, â€Å"both methods use loss on drying to measure moisture content.† The main problem with the 16 hr oven method is the time it takes to get results, and when these are received they â€Å"have no impact on real time process control† (Unity Scientific, 2014). When it comes to the moisture balance method Unity Scientific says, although the sample can be â€Å"analyzed in 15 minutes it is â€Å"2-3 times less accurate the vacumm oven method.† The key to cereals i s the control of its moisture and texture. Moisture as mentioned previously, is critical to maintaining a cereal’s integrity, and it is crucial that the moisture of a cereal product is not greater than 3%. Anything less or greater could reduce its crunchiness as well as make it brittle. Therefore, NIR is one of the best methods of testing for moisture as well as fat content in any step of the process. In regards to its crunchiness the cereal industry uses mechanical as well as sensory evaluation methods to ensure the products texture. Nonetheless, sensory evaluations can be subjective. One of the best ways to analyze texture is the use of mechanical instruments as these provide a quantitative measure of texture. Currently instruments used by the cereal industry include Stevens, Instron and Ottawa Texture Analyzer. The purpose of these crunch evaluation methods is to find the bowl life by exposing the product to milk for a small period of time and then performing a shear test. Other equipments used are the multiple crunching probes and the Ottawa Cell shearing test. The final step in the production process is packaging. Different equipment and films are used across the board in the cereal industry. Some of the machinery used include Ishida multi-head weighers, Bosch vertical form fill seal machines and Triangle bag in box packaging. When it comes to films, they either use wax paper or various polymer films (Smith Hui, 2014). However, before selecting a packaging film, cereal manufacturers consider whether the location the product is going to be sold is humid or arid. Based on these conditions the film is selected and used for production. One of most common packaging materials used in the cereal industry is polyethylene films (Smith Hui, 2014). The packaging film must protect from water vapor transmission and flavor loss. As mentioned previously, moisture plays a big role in the process and any sign of moisture gain could lead to potential loss of crispiness and acceptability of the product. Another issue for cereals is the instability of lipid s. Lipid oxidation leads to rancidity thus, creating a bad aroma in the product. To prevent lipid oxidation and moisture gain in the product, the cereal industry utilizes different antioxidants. The antioxidants commonly used are butylated hydroxyanisole (BHA) and butylated hydrooxytoluene (BHT) (Smith Hui, 2004). Although their use is limited in the production process, these can be added before cooking. However, after several trials, it was discovered that due to their non polarity and their volatility these would not hold during the manufacturing process. Nonetheless, it was discovered it was better to apply these antioxidants to the packaging material as the antioxidants would transfer to product after packaging (Smith Hui, 2014). Packaging does more than protect from decay, it provides the identification, and it provides consumer attraction and appeal to the product. Producing cereals entails more than what is see in the grocery store shelves or what is consumed at homes. Essentially behind all of this manufacturing process is the effort to make profit, but no matter what idea the manufacturer may have, protecting the product and providing the best quality of product to consumer becomes primordial. Accurate shelf lives, quality of stored cereal, its freshness are what attract and appeal the consumer. References How Products Are Made. Cereal. 2014. Available at: http://www.madehow.com/Volume-3/Cereal.html. Accessed September 03, 2014. Smith, J. (2004).Food processing: Principles and applications. Ames, Iowa: Blackwell Pub. Kulp, K. (2000).Handbook of cereal science and technology(2nd ed., pp. 626- 627). New York: Marcel Dekker. Breakfast Cereal. (2014, January 1). Retrieved October 18, 2014, from http://www.unityscientific.com/industries/food-dairy/cereal.asp

Marketing strategy of walkers crisps

Marketing strategy of walkers crisps Walkers is the UKs favorite crisps brand. Founded in 1948, butcher Henry Walker began making crisps in his Leicester Plant to keep his workers busy, as meat was scarce in post-war Britain. Today, Walkers is Britains largest crisp manufacturer, employing thousands of people in seven locations. Walkers have 16 ranges of crisps and snacks including Walkers Sensations, Doritos and Quavers. Still based in Leicester, Walkers joined the PepsiCo family in 1989 and makes around 10 million bags of crisps a day. Walkers is worth around  £436 million, and Walkers snacks are enjoyed by over 10 million people in the UK every day. In 2007, Walkers became the first company in the world to display a carbon reduction logo on a consumer product. The label covers the carbon used from seed to store and through to product disposal. Working with the Carbon Trust, Walkers reduced energy use per kilo by one third, and water use per kilo by 45%. Walkers have also committed to further year on year reductions to continue to qualify for the label. As part of their efforts to reduce our carbon emissions by reducing our road miles, they switched to using 100% British potatoes for Walkers crisps in July 2007. Introduction to Task 1 This task is regarding marketing strategy options for walker, the requirements from task is to identify the type of growth for walkers which is most relevant to the company and provide justification for that. And then provide two marketing strategy options for walkers and explain how these options can be used to achieve the competitive advantages and long term growth. What is a marketing strategy Marketing strategy is a process that can allow an organization to concentrate its limited resources on the greatest opportunities to increase sales and achieve a sustainable  competitive advantage. A marketing strategy should be centered on the key concept that  customer satisfaction  is the main goal. [1] There are three steps in formulating a marketing strategy Step 1: Identification of growth opportunities Step 2: Consider developing Porters generic strategies Step 3: Draw up marketing options While assessing the growth opportunities some points which needs to be focused are Planning a new business, Downsizing or terminating the old ones which are no longer profitable, and the ratio between the desired sales and projected sales. As per requirement of this task the discussion will be only limited to the step 1, which is the identification of growth opportunities for Walkers. Type of growth for Walkers As looking at the current business, market share and market opportunities it indicates that for walkers the growth type is Intensive Growth. Intensive Growth is related to the growth when an organization want to enhance their current business and try to identify opportunities to achieve further growth within the current business. The above given diagram was produced by Ansoff which is a useful framework for companies management looking for the new opportunities to increase their sales and profits. As it show that it has four marketing strategies Two marketing strategy options for Walkers By looking into the current market position Walkers and the revenue they generate each year throughout the United Kingdom market, I will suggest Walkers the following two marketing strategies. Market Penetration Strategy Market Development Strategy Market Penetration Strategy The first strategy each and every company is looking for is to adopt for increasing their sales and revenue is the market penetration strategy. Market Penetration Strategy is the marketing efforts of the company to offer their existing products and services within the current market. The best way to do this is to attract competitors customers and looking for potential customers in the existing market for existing products. As Walkers have the opportunity to use market penetration strategy for their different brands in UK, and also abroad. Before going for marketing penetration strategy proper analysis of competitors in market is required what are their strengths and in which areas they are lacking in providing good services to customers, what are the core competencies for Walkers against all those who are already in the market, and then develop a plan to address those areas which need to be, and try to capture more and more customers of other competitors and also become an attracting brand symbol for new customers in the market of crisps. Market Development Strategy Developing a new market for the existing company product is called market development strategy. In this activity efforts are put on to find new markets and make new customers to increase company revenue and profit. Walkers has the opportunity to develop markets oh geographical such as cities, counties, and demographical such as on basis of sex, age group and class etc. Walkers have the opportunities to develop new markets for its product throughout the United Kingdom, and also in other potential areas globally. Through market penetration strategy they can give good packages to their customers in order to encourage current customers to buy more, the second and important factor in this strategy is that to attract competitors customer by providing them good packages to buy Walkers product and attract all those customers who are new to this market and increase the number of customers. Justification for Marketing Strategies Choices As Walkers Crisps is a UK brand with a 47% share of the British crisp market. And 12 different types of crisps products, which shows that almost half of the UK crisps market is captured by Walkers, and they have a very good and popular brand name, thats why in this assignment the two marketing strategies Market Penetration Strategy and Market Development Strategy for the purpose of marketing are recommended to Walkers. They can launch their product in new markets to attract their competitor customers and all those who are new to the crisps market, because of having good will of Walkers and good market share in the country markets, Walkers will definitely get succeed in attracting new customers and their competitors customers. The second proposed strategy for Walkers (Market Development Strategy) will enable Walkers to introduce their products into new markets with their current products. Although Walkers have about half of the market share captured in UK crisps market but definitely there will be some potential areas where they dont have given the required focus in past, or address those markets where they have low sales as compared to their competitors, so this strategy will help walkers to properly analyze the new market areas and launch their products under the well known brand name of Walkers to achieve maximum benefits for the company. Introduction to Task 2 For every product in market the PESTEL analysis is very important as it is a main part of the marketing strategy development, so the requirement from this task is to carry out PESTEL analysis for Walkers, and then provide enough information and asses how technological change and globalization for the companys market planning in the next 3 years. What is PESTEL Analysis PESTLE stands for P: Political E: Economic S: Sociological T: Technological L: Legal E: Environmental.   PESTLE analysis is in effect an audit of an organizations environmental influences with the purpose of using this information to guide strategic decision-making. The assumption is that if the organization is able to audit its current environment and assess potential changes, it will be better placed than its competitors to respond to changes. Importance of PESTEL Analysis To help make decisions and to plan for future events, organizations need to understand the wider meso-economic and macro-economic environments in which they operate. (The meso-economic environment is the one in which we operate and have limited influence or impact, the macro-environment includes all factors that influence an organization but are out of its direct control). An organization on its own cannot affect these factors, nor can these factors directly affect the profitability of an organization. But by understanding these environments, it is possible to take the advantage to maximize the opportunities and minimize the threats to the organization. Conducting a strategic analysis entails scanning these economic environments to detect and understand the broad, long term trends.   A PESTLE analysis is a useful tool for understanding the big picture of the environment in which an organization is operating. Specifically a PESTLE analysis is a useful tool for understanding risks associated with market (the need for a product or service) growth or decline, and as such the position, potential and direction for an individual business or organization.   A PESTLE analysis is often used as a generic orientation tool, finding out where an organization or product is in the context of what is happening outside that will at some point affect what is happening inside an organization. The six elements form a framework for reviewing a situation, and can also be used to review a strategy or position, direction of a company, a marketing proposition, or idea.   Completing a PESTLE analysis can be a simple or complex process. It all depends how thorough you need to be. It is a good subject for workshop sessions, as undertaking this activity with only one perspective (that is, from just one persons view) can be time consuming and miss many critical factors. We all see things differently and harnessing the knowledge of several people will ensure the process is robust and meaningful. PESTEL Analysis for Walkers Following is the PESTEL analysis of Walkers in UK, keeping in mind the market share, growth and opportunities available in UK crisps market. Political: what is happening politically in the environment in which you operate, including areas such as tax policy, employment laws, environmental regulations, trade restrictions and reform, tariffs and political stability. As the political system in the UK is one of the most stable democratic systems, so Walker will be having no problems regarding the country political system. The taxations, employment laws and environmental regulations in UK have proper system to introduce so thats not an immediate treat, but the Walkers have to look into current recession which is effecting almost all organizations in the world. Economic: what is happening within the economy, for example; economic growth/ decline, interest rates, exchange rates and inflation rate, wage rates, minimum wage, working hours, unemployment (local and national), credit availability, cost of living, etc. the current economic conditions have effected most of the organizations throughout the world, so before launching any new marketing campaign it is necessary for Walkers to have proper analysis of the available resources for campaign and what will be the after effects of that. Sociological: what is occurring socially in the markets in which you operate or expect to operate, cultural norms and expectations, health consciousness, population growth rate, age distribution, career attitudes, emphasis on safety, global warming. As Walkers is so much focused on these issues, they have invested millions pound to improve the health related issues in their products. Technological: what is happening technology-wise which can impact what you do, technology is leaping every two years, how will this impact your products or services, things that were not possible five years ago are now mainstream, for example mobile phone technology, web 2.0, blogs, social networking websites. New technologies are continually being developed and the rate of change itself is increasing. There are also changes to barriers to entry in given markets, and changes to financial decisions like outsourcing and in sourcing. So Walkers need to keep updating on their technological side to ensure their parallel walk with the fast driven technological world. Legal: what is happening with changes to legislation. This may impact employment, access to materials, quotas, resources, imports/ exports, taxation etc. As described earlier that to bring changes in legal system in country there is a fair and smooth process, so Walkers dont need to be worried about it. Environmental: what is happening with respect to ecological and environmental aspects. Many of these factors will be economic or social in nature. So Walkers need to develop environment friendly product and use such fuels in the manufacturing plants which produce min environmental pollution and dont harm the health of the workers. Impact of Technological Change In modern world the technology evolve very quickly and each and every day there is some new innovation in the way organizations use the technology in order to enhance their operations and perform the daily activates in good and quick way. The business world has revolutionized almost beyond recognition in the past few decades. Technology and we mean the advances in communication and information technology has changed the face and the pace of business. As communication and information travels faster and faster, the world seems smaller and smaller, and this has large implications for the way we conduct business. Storing important in files on a computer  rather than in drawers, for instance, has made information easily accessible. Using  e-mail  allows businesses to communicate and send these files quickly to remote locations outside of an office. The impacts of technological change for Walkers in next 3 years will the following General changes to technology Communicating Consumers in control Technology has bring a revolutionary changes to the way of marketing, after the evaluation of internet most of the business are now not limited to shop-based shopping, but the concept of virtual business is introduced. The fast communication among the business units and storage of large scale of data easily, and accessibility of data at finger tips are the main advantages of using technology. Technology makes it easy for consumers to find information that they are looking for they are now in control of what they are getting from businesses. With the internet, it is simple for consumers to get online and find a great deal or the same product that you are selling, but one of higher quality for the same price. The internet has created a world of choices for the consumer to use, which means they can make demands on what type of product or service you are offering. What you need to do is to change your product or service and what you are delivering to ensure that your consumers are getting the best deal possible, but that they are also getting the best service and the best value when compared to other companies. Impact of Globalization Globalization has caused dramatic changes to business practices around the world. Companies such as IBM, Intel, Microsoft, and Philips have started to outsource specialists from various parts of the world, causing job shifts and changes in companies structures (Engardio, Bernstein, and Kripalani, 2003). Globalization is an interesting phenomenon since it is obvious that the world has been going through this process of change towards increasing economic, financial, social, cultural, political, market, and environmental interdependence among nations. Virtually, everyone is affected by this process. Given these changes, globalization brings about a borderless world (Eden and Lenway, 2001; Ohmae, 1989a). Globalization drives people to change their ways of living. So to complete in the globalized world Walkers management need to think out of the box and develop their marketing strategy in way which fulfills the needs of all the global stakeholders, and all products and information must be available globally. For that they may need to outsource their business operations may be to some firms in countries other than in where Walkers is in operation. Conclusion and Recommendations Walkers have very good market in UK, providing their customers good crispy products having twelve brands of snacks and crisps. They have captured forty three percent of UK market; have very good marketing strategy like having a former England football team captain as Walkers brand ambassador. But they have very potential growth opportunities which will need to be availed by having improved marketing strategy and addressing the hidden markets to penetrate in those areas, and also try to attract new customers into market, also the customers of their competitors. Also they need to keep updating on their system and technologies both for information sharing, marketing and product preparation to have improved quality of products and achieve the organizational goals and objectives.

An Analysis Of British Literature Essay -- essays research papers

An Analysis of British Literature Death is inevitable and what happens after death will always be a mystery to the living. For this reason, the afterlife has always been a topic which artists have chosen to explore in their works. Throughout the chronology of British literature, artists have used society's views as a basis to examine the afterlife, and look at it in new ways. The afterlife has been a theme in British Literature from the Anglo-Saxon period of Beowulf to the twentieth century writings of Dylan Thomas. The mysteriousness of the afterlife makes it a topic which artists will always be eager to analyze. During the Anglo-Saxon Period which lasted from 449 AD to 1066 AD, the popular belief of the times was that a person's life was predetermined by Wyrd, the Old English word for fate, and there was nothing which the individual could do to change his destiny. The most famous writing from this epoch is the epic poem Beowulf. Beowulf, the main character, had no fear of the evil monster Grendel because he believed "Grendel and I are called/ Together," by fate. He also displayed his faith in the beliefs of society when he told Hrogthgar "Fate will unwind as it must." When Grendel died, the soldiers "had no semse of sorrow, felt no regret for his sufferings," because they believed Grendel was destined to die, and there was no way to defy destiny. They also did not pity Grendel because they considered him to be entirely evil because it was his fate. The Anglo-Saxon's strong belief in fate led to them not fearing death as much as during other times periods in British Literature. Beowulf's strong belief in fate was a reflection in the society's pagan belief in fate. Due to the fact that the society at the time of Beowulf was pagan, they did not believe in the afterlife. The Christian revision to Beowulf illustrated a different outlook on death and the afterlife. When monks were copying the story, they realized it dealt with pagan ideals, and they incorporated Christian ideals into the text. The monks included the concept God was the ultimate one who controls fate. This was shown when Beowulf told Hrogthgar "God must decide/ Who will be given to death's cold grip." The monks also inserted the idea that there is an afterlife. When... ... in the afterlife. Throughout the chronology of British literature, artists have presented many different perspectives on the afterlife. There are views which I agree with, and there are views which I don't agree with. One of the ones which I support is John Donne's idea of death not being a terrible thing because it leads to the afterlife which is a better place. I support this idea because I have been raised in a rather religious family, and it has been instilled in me that death is not bad, and there is an afterlife to go to. I also agree with the ideas in "Ulysses" and "Do Not Go Gentle Into That Good Night" that one should struggle to make the most out of his life and to make it meaningful. This idea is very appealing to me because I believe a person should always attempt to make the most out of what he/she is given, and it is important to never give up. While I don't agree with the poems which state that there isn't an afterlife, analyzing and thinking about them has been valuable for me because it has forced me to consider my views, and to build up a stronger support of my views to counter the ideas presented in these poems.

The Strange Points of View of Dostoevskys The Brothers Karamazov :: Brothers Karamazov Essays

The Strange Points of View of Brothers Karamazov The novel, The Brothers Karamazov written by Fyodor Dostoevsky was first published in 1880. This book is unique because it is effectivly written in a combination of third person omniscient and first person point of view. The author seems to be a character in the book but also seems to know all. Parts of The Brothers Karamazov is in the third person omniscient point of view. Third person omniscient is when the author is all knowing. This is shown when the author is able to read the thoughts of all of the main characters. A good example of this is when Mitya, one of the main characters, is observing two Polish men that he just met. Mitya’s thoughts are displayed when he decides that "it was the little pipe-smoking Pole who was in charge" (pg. 507). This shows what is going through Mitya’s mind when he meets the Poles and is a good example of the third person omniscient point of view. The author also knows what is going on in other towns while he seems to always be at the monastery in the main town in the book. This is shown when Mitya goes to the village of Sukhoi in order to see a man about a business deal. Mitya gets a priest to go with him and the priest "suggested they go on foot, for, he assured Mitya, it was only a miles walk..." (pg. 452). This is information that could only be known to someone who was at Sukhoi at that time while the character of the author was still at the monastery that is in another town. This also shows third person point of view. The author seems to also know what is going on in the privacy of people’s homes. This is shown on page 483 when Mitya is at his friend Perkhotin’s house and they are the only two people there and yet the author is able to describe exactly what is going on. He explains how "the washing operations began" when he had no way of actually knowing. This adds to the third person point of view. The third person omniscient point of view aspect of the book makes it so that the story keeps going even though the author is not there. The thoughts and the actions of the characters are always known so that the story is more complete and therefore more effective.

Budgeting Practices and Performance in Small Healthcare Businesses

Management Accounting Research 21 (2010) 40–55 Contents lists available at ScienceDirect Management Accounting Research journal homepage: www. elsevier. com/locate/mar Budgeting practices and performance in small healthcare businesses Robyn King a , Peter M. Clarkson a,b,? , Sandra Wallace c a b c UQ Business School, The University of Queensland, Brisbane 4072, Australia Faculty of Business Administration, Simon Fraser University, Burnaby, Canada V5A 1S6 Department of Accounting and BIS, The University of Melbourne, Victoria 3010, Australia a r t i c l e i n f o a b s t r a c tWe present evidence linking primary healthcare business characteristics, budgeting practices, and business performance. Based on a sample of 144 responses from a survey of members of the Australian Association of Practice Managers (AAPM), we ? nd that factors identi? ed by contingency-based research are useful for predicting a business’s budgeting practices. Speci? cally, we ? nd the adoption of w ritten budgets to be related to size and structure, and for businesses using written budgets, the extent of use is related to business structure, strategy and perceived environmental uncertainty.Finally, we ? nd evidence of a relationship between budgeting practice and performance. Here, we initially ? nd a business’s performance to be positively associated with the use of written budgets. More re? ned tests of the â€Å"? t† between business contingency factors and extent of operating budget use then provide evidence of a positive association between the extent of â€Å"? t† and performance. Crown Copyright  © 2009 Published by Elsevier Ltd. All rights reserved. Keywords: Budgeting SME Healthcare businesses . Introduction This study investigates the relationship between contextual factors identi? ed from contingency-based research, the adoption and extent of use of budgets, and business performance within the Australian primary healthcare setting. 1 We focus on budgets because they are considered to be one of the main management control systems This study is based largely on Robyn King’s Honours thesis completed in the UQ Business School at the University of Queensland.The authors would like to thank the editor and the two anonymous referees, as well as workshop participants at Monash and Swinburne Universities, the 2007 AFAANZ Annual Conference, and especially Aldonio Ferreira, Axel Schultz, Shannon Anderson and Julie Walker for comments on an earlier version of the manuscript. ? Corresponding author at: UQ Business School, The University of Queensland, Brisbane 4072, Australia. Tel. : +61 7 3346 8015; fax: +61 7 3365 6788. E-mail address: P. [email  protected] uq. edu. au (P. M. Clarkson). Primary healthcare is the initial care of a patient as an outpatient excluding diagnostic testing; tertiary healthcare is that provided in a hospital setting. (MCS) in organisations, have been found to be the earliest MCS that a business ad opts, and continue to receive signi? cant attention in the research literature and in teaching material (e. g. , Davila and Foster, 2005, 2007; Sandino, 2007). We select the Australian primary healthcare sector as our experimental setting both because of its importance socially and economically, and because it is likely to be comprised of businesses that vary broadly in their budgeting practices.Contingency-based research proposes that there is no single MCS suitable for all businesses. Instead, the suitability of a particular MCS is argued to be contingent upon characteristics of a business including its size, strategy, structure, and also management’s perceptions of the uncertainty of the environment within which the business operates. We begin by examining the relationship between a business’s budgeting practices and these four contextual factors. In so doing, we view the development of a budgeting practice as consisting of two stages, the initial decision regarding adoption and the subsequent decision regarding extent of use.Here, the term ‘adoption’ re? ects the decision by a business to use a formal process to project its future 1044-5005/$ – see front matter. Crown Copyright  © 2009 Published by Elsevier Ltd. All rights reserved. doi:10. 1016/j. mar. 2009. 11. 002 R. King et al. / Management Accounting Research 21 (2010) 40–55 41 ?nancial performance (Davila and Foster, 2005). Alternatively, the term ‘extent of use’ refers to both the number of different types of budgets the business uses and the frequency of their use. In our analysis, we develop arguments for, and investigate, these two stages separately.We then turn to consider the relationship between a business’s budgeting practice and its performance. The relative â€Å"? t† of the business’s MCS with its contingency factors is argued to impact on performance, with performance increasing with the degree of â€Å"? t† (Chenhall, 2003). Thus, ceterus paribus, businesses using a practice which does not â€Å"? t†, whether by â€Å"over-budgeting† or â€Å"under-budgeting†, are expected to experience weaker performance. We argue that not all of our sample businesses are likely to exhibit â€Å"best budgeting practice† because of the dif? ulties associated with identifying and implementing best practice, and the discontinuous nature of upgrades (Luft, 1997). We examine the relation between â€Å"? t† and performance using the method proposed by Ittner and Larcker (2001) and classi? ed as a Cartesian/Contingency approach (Gerdin and Greve, 2004). Degree of â€Å"? t† is measured as the difference between the extent of budget use and that predicted by the business’s contingency factors. This approach assumes that at any point, not all businesses will in fact have implemented their optimal practice.To conduct our investigation, a written survey of 988 members of the Australian Association of Practice Managers (AAPM) was undertaken. In brief, we ? nd that larger, more decentralised healthcare businesses are more likely to adopt written budgets. Further, for the subset of businesses that use written budgets, we ? nd that the extent of budget use is positively associated with structure (decentralisation) and strategy (cost leadership), and negatively associated with perceived environmental uncertainty (dynamism). Finally, we document a relationship between choice of budgeting practice and performance.Here, we initially ? nd performance to be positively associated with the use of written budgets. More re? ned tests then provide evidence of a positive association between the degree of â€Å"? t† and performance. Our study makes several contributions. First, we present evidence that contingency factors do indeed provide insights into both the adoption of budgets and the extent of their use for our sample of small Australian prim ary healthcare businesses. Interestingly, the results suggest that size and structure capture the business’s initial decision to adopt a formal budgeting practice.However, once a business has adopted a formal practice, strategy, structure, and perceived environmental uncertainty appear to be the primary determinants underlying the subsequent decision regarding the extent of budget use. We also present evidence that the â€Å"? t† of our sample business’s budgeting practices is associated with performance. To our knowledge, there has been relatively little empirical evidence on this relationship documented in the literature to date. Second, contingency-based research has predominantly been conducted in the large business sector.We extend this work by examining a small business setting. We argue that our setting has the advantage of allowing for an examination not only of the extent of budget use but also of the initial decision to adopt a budgeting practice. In c on- junction, it also provides an opportunity to examine more closely the different underlying theoretical constructs of size that the two most commonly used proxies, gross fees and full-time equivalent employees, may be capturing. Finally, from a practical perspective the healthcare sector is under continuing pressure to increase its ef? iency. This study contributes by examining the contexts in which the use of budgets is associated with enhanced performance in primary healthcare. The results should be of bene? t to both practitioners and those who advise practitioners on MCS design. The remainder of this paper is structured as follows: Section 2 presents background material; Section 3 describes our experimental setting; Section 4 presents the hypotheses, Section 5 the method and Section 6 the results; and Section 7 provides a summary and conclusions. 2. Background MCS have been de? ed as all devices and systems that businesses use â€Å"to ensure that the behaviours and decision s of their employees are consistent with the organisation’s objectives and strategies† (Malmi and Brown, 2008). We focus on a business’s decision regarding its budgeting practices. Budgets are considered an MCS because they can in? uence the behaviours and decisions of employees by translating a business’s objectives into plans for action, communicating the objectives, and providing a benchmark against which to assess performance.We view budgets as both an important and appropriate focus given that they are considered to be one of the main MCS in organisations, have been found to be the earliest system adopted in startup businesses, and continue to receive signi? cant attention in the research literature and in teaching material (Davila and Foster, 2005, 2007; Sandino, 2007). Within the MCS literature, the term ‘budgeting’ is used to refer to a broad range of topics (see Chapman et al. (2007) for a review). In this study, we de? e a budget as a forward looking set of numbers which projects the future ? nancial performance of a business, and which is useful for evaluating the ? nancial viability of the business’s chosen strategy or deciding whether changes to the overall plan are required (Davila and Foster, 2005). Budgets have been identi? ed as playing a number of roles which include making goals explicit, coding learning, facilitating co-ordination, promoting accountability, facilitating control, and contracting with external parties (Davila et al. 2009). Bene? ts of budgeting include increasing ef? ciency through planning and co-ordination, supporting both control and learning through the comparison of actual results with plans, and more globally â€Å"the ability to weave together all the disparate threads of an organisation into a comprehensive plan that serves many purposes† (Hansen and Otley, 2003). Given these various roles and potential bene? ts, one might expect all businesses to adopt a formal bu dgeting practice.In fact, this view appears to underlie much of the empirical MCS research predominantly conducted in a large business setting, as it is often assumed that large businesses will already have formal MCS that can be readily examined (Chenhall, 2003). Here, the focus has typically 42 R. King et al. / Management Accounting Research 21 (2010) 40–55 been on the adoption and performance implications of speci? c MCS â€Å"innovations† like activity based costing (ABC) (Ittner et al. , 2002). However, it is argued in the MCS literature that a rational adoption decision should require an evaluation of the associated costs as well as the bene? s (Davila and Foster, 2005). Costs of a formal MCS include the easily measured out of pocket costs associated with implementing and operating the system (Hansen and Otley, 2003; Hansen and Van der Stede, 2004). Other costs that are not so easily measured are the possibility that budgets create rigidity thereby limiting co-op eration and creative response, over-emphasise short-term cost control and top down authority, encourage gaming, and de-motivate employees (Hansen and Otley, 2003; Hansen and Van der Stede, 2004). Further, arguably the bene? s and costs associated with adopting a formal budgeting practice will not be the same for every business but will depend on business-speci? c contextual factors. Thus, ex ante, it is not clear that adoption of a formal budgeting practice is necessarily a rational outcome for all businesses. Our study distinguishes itself from the majority of the MCS literature by focusing on the small business setting, speci? cally the primary healthcare business sector. Within this sector, we argue that it is likely that for some businesses, the costs of budgeting will outweigh the perceived bene? s whereas the converse will likely be true for others. Thus, we argue that this setting provides the opportunity to gain insights into both the decision regarding the adoption of budge ts as well as the subsequent decision regarding the extent of their use. We investigate the contextual factors that delineate the costs and bene? ts associated with budgeting from a contingency framework perspective. Our initial focus is on the contextual factors that differentiate adopters from non-adopters.We then consider those factors that drive the decision regarding the extent of budget use and conclude with an investigation into the relationship between the ? t of a business’s budgeting practice with its contextual factors and its performance. In adopting a contingency framework perspective, we acknowledge that research referring to contingency theory has been subject to the criticism that contingency is a general idea rather than a theory as â€Å"there is no a priori intuition of its own as to what the pertinent factors are and as to their likely consequences† (Spekle, 2001).In this study, we do not consider contingency as a theory but rather as a framework fo r investigating identi? ed factors for which we have a priori intuition based on other organisational, economic and sociological theories. A further criticism of the contingency-based literature is its simplistic nature of investigating one contextual factor or MCS at a time (Fisher, 1995). In the face of this criticism, some studies have begun investigating multiple contextual variables simultaneously (Hansen and Van der Stede, 2004; Cadez and Guilding, 2008). We also consider multiple contextual factors, speci? cally those identi? ed in Chenhall’s (2003) review of the MCS literature since 1980. This review con? rms environment, technology,3 structure and size as â€Å"the descriptors of the fundamental generic elements of context†. Strategy is also included as it emerged in the 1980s as an important factor that in? uences the design of MCS (Lang? eld-Smith, 1997). Finally, contingency-based research has its roots in sociology. The underlying premise of sociology is t hat humans are boundedly rational and satis? cing (March and Simon, 1958).Bounded rationality can impede decision-making as not all possible alternatives are known with certainty at a given point in time. One identi? ed role of MCS is to assist managers in decision-making (Lawrence and Lorsch, 1967). However, the decision on the optimal MCS is itself restricted by bounded rationality, as well as the personal incentives of the manager. Thus, while conceptually organisations may be expected to use the optimal MCS, this is not always possible. Businesses facing the same contextual factors may therefore choose different MCS, with the differences re? cted in their performance. In our study, we investigate the effect of a mismatch between the contextual variables and the extent of use of budgets on performance. 3. Experimental setting We adopt the Australian primary healthcare sector as our experimental setting for two reasons. First, we view it as an inherently interesting research setti ng in its own right, given its importance both socially and economically. Second, we believe it to be an ideal setting within which to conduct an investigation into budgeting because as argued below, it is a sector within which there are likely both signi? ant incentives and disincentives to budget. Thus, this setting provides the advantages of the controls that arise from working within a single industry while at the same time, one within which variation in budget use can reasonably be expected. 4 In detail, the Australian primary healthcare sector plays a uniquely important role in terms of both the services it provides and its place in the economy. In terms of services, it represents the gateway through which patients most typically enter the health system. Initial contact with For a sample of 57 organisational units, all with budgeting practices in place, Hansen and Van der Stede (2004) undertook an exploratory study focusing on four contextual factors (strategy, structure, envi ronment, and size) as possible antecedents to identi? ed reasons to budget. Alternatively, for a sample of large businesses, mostly manufacturing from Slovenia, Cadez and Guilding (2008) ? nd that superior performance results from an appropriate match between the contingent factors strategy, size, and market orientation, and strategic management accounting applications. We initially considered technology as an additional contextual variable but decided against its inclusion given our choice of experimental setting. Recent advances in medical technology have impacted on diagnostic specialties such as pathology and radiology (specialties not included in our study) to a much greater degree than primary healthcare. With the exception of three opthalmologists, the only specialists included in the survey were those that provide outpatient services from private rooms and like GP’s, still largely rely on their skill and basic instruments such as the stethoscope.From an administrative and medical records perspective, the use of technology is widespread, with computers being used in 89. 8% of all GP practices and 94. 5% of all specialist practices in 2002 (ABS, 2002). 4 In this regard, Merchant (1981) suggested that a desirable extension of budgeting studies guided by contingency frameworks would be to collect data from samples chosen to magnify the variation on the dimensions of interest while controlling for the many possible interacting factors which obscure or distort the ? ndings. R. King et al. Management Accounting Research 21 (2010) 40–55 43 the health system is through a general medical practitioner (GP). For specialised care, patients are then referred to specialist medical practitioners. GPs and specialists provide this primary care from private consulting rooms and refer on to other providers for diagnostic tests. 5 Economically, the sector contributed 1. 71% of GDP in 2007 (AIHW, 2008). 6 Faced with rising costs, doctor shortages and increasin g waiting times, primary healthcare businesses are increasingly under pressure to become more ef? ient (Department of Health and Ageing, 2005). Here, budgeting has been identi? ed as a management accounting tool that enhances ? nancial performance and improves ef? ciency (Davila and Foster, 2007). Further, the majority of the existing management accounting research has been focussed on in-hospital care so little is known about MCS in the outpatient setting (Abernethy et al. , 2007), with the exception of a recent U. S. -based study of the relation between performance-based compensation and ownership of primary healthcare businesses (Ittner et al. 2007). Taken together, these facts reinforce our view that the primary healthcare sector within Australia is an important and potentially fruitful setting for the conduct of MCS research generally, and research into budgeting practices more narrowly. More directly to the current investigation, we seek an experimental setting with variation in budget use, including the presence of both adopters and non-adopters. We believe that a number of factors conspire to make the primary healthcare sector a reasonable choice, ex ante.First, the small business sector has been argued to have lower levels of formal planning and control (Chenhall and Lang? eld-Smith, 1998). As such, it might also be expected to include non-adopters. 7 In Australia, primary healthcare is largely provided by private businesses owned by the doctors working in the business as sole traders, in partnership, or through a company. Management of these businesses has traditionally been by the owner, although there now appears to be a trend towards the delegation of management to practice managers. 8These primary healthcare businesses typically have fewer than 50 employees and would thereby most often be classi? ed as small businesses according to the OECD de? nition (Holmes and Kelly, 1989). 9 Second, prior research also ? nds that rapid growth small-to-medium enterprises (SME) provide more extensive future-oriented ? nancial reporting than matched non-growth concerns (McMahon, 2001). Arguably, small primary healthcare businesses are less likely to be rapidly growing as there is currently an undersupply of primary healthcare workers due to an ageing workforce and restrictions on training places. 0 These limited organic growth prospects further our expectations of ? nding non-adopters. Third, ? rms within the service sector typically do not need to account for stock, thereby eliminating one driving force behind the use of sophisticated MCS. Finally, research on small and family business supports the view that necessary management skills are required before planning can be initiated (Gibb and Scott, 1985). Since there is a lower likelihood that primary healthcare owners, the majority of whom are doctors, have formal training in MCS, non-adoption is even more likely relative to other service sectors.Conversely, there are also economic incent ives to adopt budgets. As noted, primary healthcare businesses are under increasing pressure to become more ef? cient. The National Health Performance Committee has adopted a framework speci? cally designed for measuring healthcare system performance, with one of the identi? ed components being ef? ciency. In response, a number of institutions and private management consultants now offer education on managing primary healthcare practices that includes training on budgeting. 1 In conjunction, there is the added incentive to undertake these education programs in that continuing education is a requirement of the accreditation process for GP practices. Further, only accredited practices can access Practice Incentive Payments (PIP) from the Federal Government which can represent signi? cant additional revenue. 12 5 There is currently no Medicare funding for diagnostic services provided within the primary healthcare setting and so, these businesses do not invest in the associated technolo gy. The specialist practices included in the study were the private rooms of orthopaedic surgeons, opthalmologists, ermatologists, gynaecologists, and gastroenterologists. These specialists conduct initial consultation and post operative follow up from their private rooms but perform procedures in hospitals or day surgeries for which they have visitation rights, using equipment supplied by the hospital/day surgery where a fee is charged directly to the patient for its use. 6 Overall, the healthcare industry contributed 8. 98% of GDP in 2006–2007, with 19% of recurrent health expenditure on medical services provided by GP’s and specialists. In 2006–2007, Medicare paid $4029. million for GP services, representing an average 4. 93 items per capita (AIHW, 2008). 7 In contrast, international studies of formal budget use have focused on large businesses, ? nding the vast majority use annual ? xed budgets (Horngren et al. , 2006). Australian evidence is consistent, wit h 97% of large businesses found to use budgets (Chenhall and Lang? eld-Smith, 1998). 8 The exact extent to which management is being delegated to practice managers is uncertain given a lack of studies into the prevalence or role of practice managers (Department of Health and Ageing, 2005). There were 9600 private GP practices operating in Australia at the end of June 2002. Of these, 68. 5% were single practitioner practices employing 2. 9 persons on average, and only 100 employed more than 10 practitioners. At the same time, there were 9864 private specialist practices, 89. 7% of which were solo specialist practices employing an average 3. 2 persons and only 19. 2% had greater than 10 practitioners (ABS, 2002). 10 There has been a recognised unfavourable long-term trend since 1999 towards an increasing percentage of primary care practitioners aged 55 years or over.In conjunction, the World Health Organisation (WHO) predicts a global workforce shortage of 4. 25 million health workers over the next decade (Cresswell, 2007). 11 The 2008–2009 Federal Government Budget proposal includes administered Program 5. 3—‘Primary Care Policy, Innovation and Research’ which among other things, â€Å"funds initiatives to improve service delivery and help GPs access current best business practice. † As a part of their response, the Australian Medical Association (AMA) and the AAPM have made available speci? cally tailored business education programs for healthcare managers. 2 The Royal Australian College of General Practitioners (RACGP) standards for general practice include: â€Å"Our administrative staff can describe (and there is evidence of) training undertaken in the past 3 years that is relevant to their role in our practice. † The practice manager is speci? cally mentioned in the standard, as is the term practice management training. In order to access Practice Incentive Payments, GP practices must have complied with the RACGP st andards. In 2007, 80% of GP practices were accredited (AIHW, 2008).By way of context, an accredited practice with 44 R. King et al. / Management Accounting Research 21 (2010) 40–55 However, notwithstanding, for some businesses, given their lack of size and sophistication, these incentives are unlikely to outweigh the costs of budgeting which include the initial investment in software, skills, and the added labour hours. 4. Hypothesis development 4. 1. Overview This study investigates the relationship between factors identi? ed from contingency-based research, the adoption and extent of use of budgets, and business performance. The speci? contextual factors we consider are size, structure, strategy, and perceived environmental uncertainty (Chenhall, 2003). We argue, based on how each identi? ed factor is expected to impact both a business’s needs for and thereby the bene? ts it derives from budgeting, and also its ability to meet the costs of a budgeting practice, that the four contingency factors play different roles relative to the two stages of the budgeting decision. Speci? cally, we predict that a business’s adoption decision primarily related to its size and to a lesser extent, its structure (decentralisation).For businesses that make the threshold adoption decision, we predict that those that are more decentralised, employ a cost leadership strategy, and for which management perceives a lower level of environmental uncertainty will use budgets to a greater extent. Quite clearly, however, the roles played by the various factors ultimately remain an empirical question and as such, we give consideration to each when we empirically model the two stages of the budgeting decision. Finally, we predict that the match between the contextual factors and extent of budget use will be re? ected in business performance. These predictions are formalised below. . 2. Determinants of budgeting practice 4. 2. 1. Size The construct of size has frequentl y been viewed as re? ecting two dimensions, complexity and availability of resources, with both argued to be increasing with size (Fredrickson and Mitchell, 1984; Mintzberg, 1994). While small, single-business organisations can often be controlled with largely informal mechanisms such as direct supervision and oral communications, larger organisations require more formal controls as the increased complexity associated with a larger number of employees creates problems in social control, communication, and co-ordination (Lawrence and Lorsch, 1967).Here, Davila (2005) argues, following Levitt and March (1988), that to regain ef? ciency in managing the organisation, co-ordination and control mechanisms are formalised with the objective of coding and documenting organisational learning and reducing the demand that routine activities impose on the management team’s time. Further, in terms of a business’s ability to invest in a formal budgeting practice, it is widely accepte d that larger businesses are better positioned given their greater resources, ? nancial and otherwise.Larger businesses not only have the resources required to acquire software and skills but they can also more ef? ciently achieve these administrative tasks through economies of scale and the greater technical specialisation of their employees (Merchant, 1981). Chenhall (2003) ? nds that size has been considered as a contextual variable in only a few MCS studies as most examine relatively large businesses. Such a ? nding ? ts well with Banbury and Nahapiet’s (1979) argument that there should only be a relationship between resource availability and the introduction of formal systems in organisations of relatively small size.Consistent with these types of arguments, small business studies reveal size as in? uencing the acquisition and preparation of accounting information including budgets (Holmes and Nicholls, 1989; McMahon, 2001). Further, evidence from longitudinal studies of startup businesses suggests that size in? uences the decision to adopt operating budgets, with larger ? rms adopting the budgets sooner (Davila and Foster, 2005, 2007). They ? nd that when the business is small, control and co-ordination happens through frequent informal interactions but that the ef? iency of an informal system requiring direct contact with employees rapidly decreases with increasing size, thereby making it more ef? cient to use a formal control system. In the primary healthcare setting, we view the ? xed costs associated with the adoption of a budgeting practice to be signi? cant and thus, following the arguments of Davila and Foster (2005), propose size as a determining contingency factor underlying the adoption decision. In this sector, businesses are required to comply with substantive â€Å"red tape† that places onerous demands on their resources (Productivity Commission, 2003).As such, it is likely that only larger businesses have both the need for and the resources to devote to budgeting. Smaller practices are unlikely to be able divert resources away from their primary revenue generating clinical activities. Thus, we predict a positive relationship between business size and use of budgets. However, we also argue consistent with Banbury and Nahapiet (1979) that once a business has reached a critical size and uses a budget, size is unlikely to play a signi? cant further role in the determination of budgeting practice. Thus, our ? st hypothesis, expressed in the alternative, is: H1 . The adoption of written budgets by primary healthcare businesses is positively associated with business size. 4. 2. 2. Structure The structure of a business relates to â€Å"the formal speci? cation of roles for organisational members or tasks for groups to ensure that the activities of the organisation are carried out† (Chenhall, 2003). While two components, differentiation and integration, have been identi? ed in the literature, we focus only on differentiation because of the small size of our sample businesses. Differentiation is de? ed as the extent to which managers act as quasi-owners and is achieved through decentralisation of authority (Lawrence and Lorsch, 1967). A centralised busi- 4 FTE urban GPs would receive $60,000 per annum from PIP (Medicare, 2009). R. King et al. / Management Accounting Research 21 (2010) 40–55 45 ness structure is characterised by decision-making that is restricted to owners and upper management whereas a decentralised business delegates decision-making to lower levels of management and operational staff. Given the closer links between the ownership and control of the business, ecision-making in centralised businesses should require relatively fewer MCS. Herein, existing evidence reveals centralised businesses as having relatively few administrative controls and less sophisticated budgets while decentralised businesses have more formal controls (Bruns and Waterhouse, 1975; Merchan t, 1981). We thus argue that structure has the potential to play a role in a business’s initial decision to adopt a budgeting practice, although we view its role as secondary to size since it is unlikely that the business’s ability to meet the ? ed costs associated with a budget practice will be directly related to its structure. Further, we argue that for small healthcare businesses that have reached the threshold size and use budgets, structure also has the potential to play a role in its subsequent decision as to the extent of use. As the business becomes more differentiated, decentralisation increases and thereby so does the need for formal MCS (Lawrence and Lorsch, 1967; Merchant, 1981). Our second hypothesis, expressed in two parts and in the alternative, is then:13 H2a .The adoption of written budget by primary healthcare businesses is positively associated with business structure (decentralisation). H2b . The extent of written budget use by primary healthcare b usinesses which opt to use written budgets is positively associated with business structure (decentralisation). 4. 2. 3. Strategy Business strategy, de? ned as how a business chooses to compete within its particular industry (Lang? eld-Smith, 1997), has been the focus of much of the research on MCS as opposed to corporate or operational strategy (Chenhall, 2003).While there are a number of different typologies of business strategy, we use Porter’s typology which focuses on cost leadership and product differentiation strategies. Porter’s cost leaders are characterised by competitive prices, consistent quality, ease of purchase, and a relatively restricted product selection. In contrast, differentiators offer the market something perceived as unique. Different types of MCS will be suited to different strategies due to their differing information and feedback requirements. Cost leadership strategies are argued to require speci? operating goals and budgets to facilitate co st containment at an operational level (Chenhall and Morris, 1995). Alternatively, product differentiator strategies would require more outward focussed, broadscope, MCS to collect infor- mation on competitors for planning purposes (Simons, 1987). Since primary healthcare businesses have constraints on the total number of services they can provide such as opening hours and the number of medical practitioners, a cost leadership strategy should require that tighter cost controls be in place in order to maintain overall pro? ability. In contrast, a product differentiator strategy operating with higher margins under the same constraints should require fewer controls. While we do not expect strategy to be determinative of the threshold decision to use budgets as it is unlikely to either affect the business’s ability to meet the initial ? xed costs or contribute suf? ciently to the business’s primary need for a budgeting practice, based on the arguments above we do expect it to impact on the desire to invest in marginal costs associated with a greater extent of budget use.Thus, formally, our third hypothesis, expressed in the alternative, is: H3 . For small healthcare businesses, which opt to use written budgets, those following a cost leadership strategy will use budgets to a greater extent than those following a product differentiation strategy. 4. 2. 4. Perceived environmental uncertainty (PEU) PEU is de? ned as a situation where managers perceive elements of the environment to be uncertain, with uncertainty distinguished from risk â€Å"as uncertainty de? nes situations in which probabilities are not attached† (Chenhall, 2003).In a general sense, PEU is seen to be an important contextual factor in the design of MCS because increased PEU makes managerial planning and control more dif? cult (Lawrence and Lorsch, 1967). PEU is, however, a general term and a number of researchers have provided more speci? c classi? cations of the environment (Wa terhouse and Tiessen, 1978; Ouchi, 1979). In this study, we focus on the two most commonly researched elements of PEU, the dynamic nature of the environment (dynamism) and the level of competition (hostility).Contingency-based research in large business has found that greater dynamism is associated with a need for more externally focussed, broad scope and timely information (Chenhall and Morris, 1995). Planning becomes more dif? cult in more dynamic conditions as probabilities cannot as easily be attached to future events and controls such as static budgets may quickly become outdated. Thus, greater informal communication is required for effective decision-making and formal controls are less bene? cial or desirable (Chapman, 1997). Alternatively, large business research focussed n hostility has found that businesses facing greater competition rely on more formal controls and emphasise budgets (Khandwalla, 1972). Thus, in addition to con? rming PEU as an important contextual factor, these ? ndings also reveal the importance of specifying the dimension of interest (Chenhall, 2003). Consistent with the research on dynamism in large business but in contrast with that on hostility, Matthews and Scott (1995) ? nd for small businesses, the sophistication of planning decreases with both increased dynamism and increased hostility.They argue from an economic perspective that for small businesses, the more uncertain 13 While it could be argued that it would be impractical for a small business consisting of a single medical practitioner and few administrative staff to have a decentralised structure, given the heavy demands of clinical work on the medical practitioner’s time, decentralisation is possible to the extent that operational and ? nancial decision-making is delegated to employees. This was con? rmed in discussions in the pilot study. 46 R. King et al. Management Accounting Research 21 (2010) 40–55 the environment the less likely the manager is to ex pend scarce resources on budgets with an unproven effect on performance. The rational manager trying to meet the fundamental goal of making a pro? t will weigh up the bene? ts against the costs associated with budgeting. Based on these arguments and ? ndings, we propose that as with strategy, neither dimension of PEU is likely to impact the manager’s threshold decision to adopt a budget as it does not directly impact on the ability to meet the costs.However, for businesses that have already identi? ed the need and ability to budget, both dynamism and hostility will impact on the decision to incur the added marginal costs of increased budget use. Consistent with Matthews and Scott (1995) and the large organisation literature, given the relatively small nature of our sample businesses and the likely resource constraints that they face, we predict a negative association between the PEU dimension of dynamism and the extent of use. 14 However, contrary to the large rganisation lit erature but consistent with Matthews and Scott (1995), we also predict a negative association between the PEU dimension of hostility and the extent of use. Our fourth hypothesis, expressed in the alternative, is then: H4 . The extent of written budget use by primary healthcare businesses which opt to use written budgets is negatively associated with the PEU elements of dynamism and hostility. 4. 3. Performance and budgets Budgets have been recommended for planning, monitoring, and controlling business activities, with each thought to assist businesses to achieve pro? ability (Horngren et al. , 2006). However, the effect of budgets on pro? tability has not as yet been clearly demonstrated in the literature (McMahon, 2001). There is evidence of a positive association between the use of budgets and performance as proxied by growth in small and medium enterprises (Gorton, 1999). Even without extensive empirical evidence, planning and the use of appropriate budgets are promoted by academ ics, educators and accounting practitioners as a means of enhancing ? ancial performance (Hansen and Otley, 2003; Gorton, 1999). Thus, we might expect that primary healthcare businesses using budgets experience better performance than those that do not. More carefully, according to ‘contingency-based’ research, a state of equilibrium in the relationship between the contingency factors and the type of MCS is best described by â€Å"? t† (Covaleski et al. , 2003). â€Å"Fit† occurs when the organisation designs its practices in such a way that it has a positive impact on performance relative to alternative practices.Thus, there will be no universally effective ‘extent of budget use’, as each combination of contingency factors will â€Å"? t† with different practices. The positive impact on performance of attaining â€Å"? t† is due to the ef? ciencies that result from using the most suitable MCS. When there is a lesser â€Å"? tâ €  between the extent of budget use and the contingency factors, performance will be â€Å"impaired†. Further, mis? t will be associated with lower performance irrespective of whether it arises from â€Å"over-budgeting† or â€Å"under-budgeting†. Thus, our ? th hypothesis, stated in the alternate form, is: H5 . A business’s performance is positively associated with the degree of ? t between the extent of budget use and its contingency factors. The inef? ciencies arise because the need for a budgeting practice is incongruent with the adopted practice. If the business over-commits to budgeting, it is likely to have expended scarce human and ? nancial resources without enjoying commensurate bene? ts. Conversely, if it under-commits, its performance will likely suffer because of control and/or co-ordination problems.To illustrate, consider the various contextual factors identi? ed above. First, regarding size, a relatively small business that uses an exte nsive budgeting practice will have unnecessarily expended resources implementing and operating the practice when in fact informal communication is practical and likely preferred. Conversely, a relatively large business without a formal budgeting practice will likely ? nd both communication and co-ordination problematic given the complexity associated with a larger number of employees.In a similar fashion, a relatively centralised business with an extensive budgeting practice has likely expended resources on a level of control that is greater than required to encourage employees to make decisions that are in keeping with the organisational objectives. In terms of strategy, a cost leadership strategy requires more speci? c controls than a differentiation strategy. Thus, the adopted business strategy will likely be less effective if an incompatible budgeting practice is implemented to support the strategy. Finally, high levels of PEU make it much more dif? ult to plan with certainty, t hereby reducing the need for and advantages of budgeting. Finally, notwithstanding equilibrium-type arguments, we believe that there will be variation in the degree of â€Å"? t† in our setting given the dif? culties that primary healthcare businesses likely face in identifying and implementing their best budgeting practices. Given their size and medical focus, it is likely that many of our sample businesses approach budgeting from a relatively unsophisticated perspective and/or view it as a lower priority. This makes the process of identifying a practice that â€Å"? s† relatively slow and involves ‘trial and error’ type of learning. Here, Luft (1997) argues that while static equilibrium theories â€Å"can predict the techniques the ? rm should end up with† they cannot predict â€Å"how long it will take to complete the process or what the path to the solution will be. † Thus, it is likely that there will be a lag between the need for and th e use of a particular budgeting practice. Milgrom and Roberts (1992) also argue that organisations are dynamically learning and moving towards an optimal level of management accounting practice. The problem of implementing a budget practice that â€Å"? s† is further complicated by the fact that implementation of new budget practices is likely to 14 The variation in PEU of managers from different industries has typically been the focus of previous research. In this study, industry is a constant but arguably PEU is still of interest, as it has also been found to vary among the managers of businesses within the same industry (Boyd et al. , 1993). R. King et al. / Management Accounting Research 21 (2010) 40–55 47 occur in a â€Å"lumpy† fashion because when increasing the extent to which they use budgets, businesses are forced to do so in larger rather than smaller increments.As Luft (1997) argues, â€Å"changes in information systems are often sharply discontinuo us†. 5. Method 5. 1. Sample frame and description For this study, a cross-sectional research design is used and the quantitative measurement tool is a mail questionnaire. Recognised problems associated with the implementation of survey-based studies include the initial dif? culty of identifying and accessing appropriate respondents, and then of achieving acceptable response rates (Dillman, 2000). In light of this, since budgets are considered to be a traditional management tool and there is an identi? d trend towards delegating management responsibilities to practice managers, practice managers were chosen as the target subjects for the survey (Department of Health and Ageing, 2005). The further problems of contacting practice managers via a cost effective means and encouraging participation were addressed by approaching the Australian Association of Practice Managers (AAPM) for support. The AAPM is the only recognised professional body for practice managers in Australia and c onsists of managers of dental, medical, and allied health businesses.Currently, there are 1200 members of the AAPM from medical practices, representing approximately 6% of the small private medical businesses operating in Australia. Membership in the AAPM is voluntary subject to an annual subscription fee. There are a number of bene? ts associated with membership including discounts for management education courses and national conferences. Thus, it is likely that members of the AAPM are interested in staying informed about current management trends, wish to become part of a professional network, and have the means to pay the membership fee.While no demographic data currently exist for practice managers who join the AAPM and those who do not, member businesses appear slightly skewed towards larger practices relative to the population of GP businesses. For 2005–2006, 83% of GP businesses had between one and ? ve GPs, with the remaining 17% having six or more (PHCRIS, 2008). In comparison, for our sample practices, 66. 4% had between one and ? ve GP’s and the remaining 33. 6%, six or more. However, notwithstanding this potential bias, the advantages of accessing the AAPM practice manager mailing list and having the AAPM recommend participation are considered to dominate.The questionnaire was initially developed from the existing literature and then pilot tested on a sample of 20 members of the AAPM and ? ve academic researchers. Based on this testing, a number of changes were made to wording and layout to enhance understandability in this setting. The ? nal questionnaire consisted of 35 questions presented in 10 sections and was estimated to require between 20 and 30 min to complete. Questions relating to each of the relevant constructs discussed in Section 4 were presented in dedicated and clearly labelled sections.The ? nal questionnaire was sent to a random sample of 1000 of the medical practice members of the AAPM. Of the 1000 surveys distribut ed, 12 were returned unopened. From the remaining 988 questionnaires, 144 complete and usable responses were received, representing a 14. 6% response rate which is comparable with those achieved in other studies of small businesses (Dennis, 2003). 15 Requested demographic data reveal 112 of the practices to be GP practices and 32 to be specialist practices, and that they employed between 2 and 42 full-time equivalents (FTE).Further, 98. 6% indicate that they use computers in some capacity. The average age of the practices is 23. 94 years, and for the 114 organisations that responded to the question, their average gross fees were $1,553,919, ranging from $206,816 to $11,000,000. 5. 2. Budgeting practice 5. 2. 1. Empirical model The ? rst stage of this study seeks insights both into the factors underlying a business’s decision to adopt a budgeting practice and into its subsequent decision as to the extent of budget use.To do so, it appeals to contingencybased research to identi fy four contextual factors (size (SIZE), structure (STRUC), strategy (STRAT), and perceived environmental uncertainty (PEU)) argued to drive the decisions, although in different combinations. Given this framework, we employ the following common empirical model to formally examine each of these two decisions: BUDGi = + 1 lnSIZEi 0 + 2 STRUCi + 3 STRATi + 4 PEUi + 5 TYPEi +? (1) where the various measures are described below. For the decision to adopt, based on H1 and H2a , 1 and 2 are predicted to be positive.For the decision as to the extent of use, based on H2b , H3 , and H4 , 2 and 3 are predicted to be positive and 4 negative. Practice type (TYPE) has been included in the model to control for potential structural differences (Hair et al. , 2006). Speci? cally, identi? ed differences in the pricing (higher) and supply (lower) of services by specialist versus general practices suggest that the market for specialist services may be relatively more heterogeneous (Department of Health and Ageing, 2005). We measure TYPE as a dichotomous variable, set equal to 1 for general practices and 0 for specialist practices. . 2. 2. Dependent variable measurement To examine the decision to adopt, we measure BUDG as a dichotomous variable set equal to 1 if the business indicates, in response to an explicit ‘yes/no’ question, that it 15 The mailing was restricted to 1000 questionnaires due to ? nancial constraints. Standard techniques to discourage non-response were employed including a personalised cover letter from the AAPM, promised con? dentiality, brevity of questions, the inclusion of a reply-paid envelope, a follow-up e-mail reminder, and a promise to make results available to participants (Dillman, 2000).Testing for non-response bias, undertaken by comparing 15 responses received in the ? rst month to the ? nal 15 responses received, revealed no statistically signi? cant differences. 48 R. King et al. / Management Accounting Research 21 (2010) 40–5 5 uses a written budget and 0 otherwise. We base this analysis on all 144 respondents and run Eq. (1) as a logistic regression. For this and all subsequent analysis, reported p-values are one-tailed since we have predictions relating to each of the contingency factors. To examine the extent of budget use, we restrict our tests to the 65 respondents using written budgets.Here, the survey questionnaire asked respondents to indicate on a 5-point Likert scale how systematically their business used operating budgets of various durations (annual, halfyearly, quarterly, monthly, and/or weekly), as well as cash ? ow, ? exible, rolling, long-term, or other budgets. These questions capture both the types of budgets used and the extent of their use, and are an adaptation of the alternative measurement approaches used in Chenhall and Lang? eldSmith (1998) and Jankala (2005). 16 The Cronbach’s alpha is 93. 8%. Panel A of Table 1 presents descriptive statistics for the responses relating t o the usage of each type f budget. To construct the ‘extent of budget use’ measure, we apply exploratory common factor analysis with orthogonal rotation to the responses. Two uncorrelated factors with eigenvalues of 3. 845 and 1. 234 are extracted, explaining 64. 14% of the total variance. The factor loadings are presented in the ? nal two columns of Panel A of Table 1. The ? rst factor aligns with operating budgets and the second with other types of budgets. As such, we consider two sub-categories (‘operating budgets’ and ‘other budgets’) and measure BUDG for each as the average summated budget usage score across the relevant budgets in the subcategory. 7 Here, Eq. (1) is run using OLS. Given a consistent lack of signi? cance, we do not report or discuss results based on our analyses of the ‘other budgets’ measure. 5. 2. 3. Contingency factor measurement Following the majority of contingency-based MCS studies, we measure size (SIZ E) as the number of full-time equivalent (FTE) employees (Chenhall, 2003). Respondents were asked to identify the number of FTE employees as administrative/reception staff, practice manager, nursing/allied health, medical, and other. Table 2 reveals that the mean (median) number of FTE employees for our sample businesses is 11. 31 (10. 500). For sensitivity purposes, we alternatively consider gross fees as a measure of size. Data on gross fees were provided by 114 of the businesses, with a mean (median) value of $1,553,919 ($1,322,359). For the remaining three contingency factors, the measures are based on responses across 7-point Likert scales to dedicated questions in the questionnaire survey. Panel B of Table 1 presents the questions and descriptive statistics for the responses. For STRUC and PEU which involve multiple questions, exploratory common factor analysis is then applied o develop the empirical measures. The factor loadings are presented in the ? nal two columns of Panel B. 18 In detail, the measure of structure (STRUC) is based on responses to six questionnaire items asking the extent to which decision-making authority has been delegated within the business and at which level operating decisions are made. The six items, originally developed by Gordon and Narayanan (1984), have been subjected to considerable scrutiny and empirical testing for reliability and validity in previous research (Chenhall, 2003). The Cronbach alpha is 82. 7%.Application of exploratory common factor analysis to the response scores leads to the extraction of only one factor with an eigenvalue of 3. 261, explaining 53. 81% of the variance. Thus, STRUC is measured as the average summated scores across the six items. Organisational strategy (STRAT) is based on Porter’s classi? cation scheme (Porter, 1980) and measured by the response to a single question drawn from Govindarajan (1988). This question asks the respondents to indicate their belief as to the best description of the business’s strategic emphasis, ranging from product differentiation to cost leadership.This was found in the pilot testing to be the only question from previous research applicable to our setting, Finally, we initially measure perceived environmental uncertainty (PEU) based on the responses to nine questions developed by Gordon and Narayanan (1984) to capture the intensity of competition, the dynamic and unpredictable nature of the external environment, and the potential elements of change in the environment. Based on the correlations among the responses, only ? ve items were eventually used with a Cronbach alpha of 64. %, as the responses to four items had correlations of less than the 30% level recommended for inclusion in factor analysis (Hair et al. , 2006). 19 Consistent with previous research (Gordon and Narayanan, 1984), application of exploratory common factor analysis with orthogonal rotation led to the extraction of two factors with eigenvalues of 2. 327 and 1. 122 explaining 67. 70% of the total variance. Following the literature, we label these factors as ‘PEU hostility’ (PEUhost ) and ‘PEU dynamism’ (PEUdyn ).PEUhost loads on the two questions relating to the competitiveness of the business environment whereas PEUdyn loads on the three questions relating to the predictability of the external environment. We include both in our empirical model, measuring each as the average summated response scores across the relevant questions. 16 Jankala (2005) prefers this measure of systematic use as a more reliable and precise measure of a business’s commitment to the use of budgets, rather than the more subjective scales used by, for example, Chenhall and Lang? eld-Smith (1998) that measure bene? t derived. 7 The yearly operating budgets did not load on either factor as a large majority of the businesses indicated that they used yearly operating budgets on a systematic basis. 18 The reported factor loadings, eig envalues, and percentage variation explained are based on the full sample of 144 respondents. When the exploratory common factor analysis is repeated based only on the 65 respondent businesses using budgets, all measures are qualitatively identical. 19 The four items removed were competition for manpower, new services marketed, ability to predict preferences for customers, and change in legal, political, and economic environment.Their removal is perhaps not surprising that as there was little variation in the responses received with the sample small businesses drawn from the same industry. R. King et al. / Management Accounting Research 21 (2010) 40–55 Table 1 Descriptive statistics and factor loadings for survey questionnaire responses. Question Descriptive statistics Mean Panel A: Budgeting BUDG 1 Which of the following budgets are prepared and how consistently? (5-point scale: 1 = not used, 2 = seldom, 3 = at times, 4 = often, 5 = systematically) a. Operating budget, yearl y b. Operating budget, half-yearly c.Operating budget, quarterly d. Operating budget, monthly e. Operating budget, weekly f. Cash ? ow budget g. Flexible budget h. Rolling budget i. Long-term budget Med SD Factor loadings #1 #2 49 2. 690 2. 064 2. 064 2. 092 1. 578 2. 079 1. 701 1. 704 1. 795 1 1 1 1 1 1 1 1 1 1. 899 1. 663 1. 659 1. 662 1. 315 1. 626 1. 317 1. 400 1. 473 0. 746 0. 614 0. 533 0. 668 0. 472 0. 149 0. 317 0. 168 0. 255 0. 322 0. 034 0. 346 0. 508 0. 823 0. 606 0. 715 Panel B: Contingency factors Structure (STRUC) STRUC 1 To what extent has authority been delegated to the manager or employee for each of the following decisions? Please indicate actual rather than stated authority) (7-point scale: 1 = no delegation, 7 = total delegation) a. Initiate ideas for new services b. Hiring and ? ring of personnel c. Selection of large investments d. Budget allocations e. Pricing decisions STRUC 2 Most operation decisions are made at what level? (7-point scale: 1 = owner level, 7 = manager level) 4. 999 5. 250 3. 173 3. 980 4. 311 4. 349 5 6 3 5 5 4 1. 517 1. 923 1. 963 2. 123 1. 900 1. 870 0. 531 0. 610 0. 732 0. 803 0. 761 0. 581 – – – – – – How would you best describe your practice’s strategic emphasis? 7-point scale: 1 = product differentiation; 7 = cost leadership) Perceived environmental uncertainty (PEU) PEU 1 How stable/dynamic is the external environment (economic and technological) facing your practice? (7-point scale: 1 = very stable, 7 = very dynamic) a. Economic environment b. Technological environment PEU 2 How would you classify the market activities of your competitors (i. e. , other healthcare practices) in the past 3 years? (7-point scale: 1 = becoming more predictable, 7 = becoming less predictable) How intense is each of the following in your industry, the healthcare profession? 7-point scale: 1 = negligible, 7 = intense) a. Bidding for purchases b. Price competition Strategy (STRAT) STRAT 1 2. 983 3 1. 127 n/a n/a 4. 134 4. 761 3. 691 4 5 4 1. 603 1. 596 1. 122 0. 968 0. 755 0. 369 0. 176 0. 185 0. 118 PEU 3 2. 446 3. 553 2 4 1. 352 1. 502 0. 147 0. 168 0. 676 0. 625 Panel C: Performance (PERF) PERF 1 Which best describes your response to the following statements over the past 3-year period? Compared to key competitors, my practice: (7-point scale: 1 = strongly disagree, 7 = strongly agree) a. Is more competitive b. Has more patients c. Is growing faster d. Is more pro? table e.Is more innovative f. Has more doctors 5. 082 5. 353 5. 105 5. 210 5. 320 4. 094 5 6 5 5 6 4 1. 607 1. 619 1. 644 1. 593 1. 643 2. 204 0. 660 0. 711 0. 849 0. 667 0. 592 0. 502 – – – – – For Panel A, the exploratory factor analysis was conducted based on the 65 businesses that produce written budgets. For Panels B and C, the exploratory common factor analysis was based on the full sample of 144 respondents. Items deemed to load on the identi? ed factor appea r in bold. 50 R. King et al. / Management Accounting Research 21 (2010) 40–55 Table 2 Descriptive statistics for ‘contingency-based’ model variables.Measure ‘Operating budgets’ Mean Median Standard deviation Min > max Size (SIZE) Mean Median Standard deviation Min > max Structure (STRUCT) Mean Median Standard deviation Min > max Strategy (STRAT) Mean Median Standard deviation Min > max PEUhost Mean Median Standard deviation Min > max PEUdyn Mean Median Standard deviation Min > max Performance (PERF) Mean Median Standard deviation Min > max Full sample (n = 144) 1. 948 1. 000 1. 376 1>5 11. 531 10. 500 6. 583 2 > 42 4. 344 4. 333 1. 381 1>7 1. 990 2. 000 1. 122 1>7 2. 987 3. 000 1. 199 1>6 4. 201 4. 333 1. 179 1 > 6. 6 4. 027 4. 083 1. 248 1>7 Written budget (n = 65) 3. 085 3. 000 1. 50 1>5 12. 893 12. 000 6. 367 3. 5 > 31 4. 862 5. 000 1. 212 1. 67 > 6. 83 1. 860 2. 000 1. 014 1>6 3. 231 3. 000 1. 183 1>6 4. 241 4. 333 1. 129 1 > 6. 67 4. 228 4. 333 1. 302 1>7 No written budget (n = 79) n/a p-Value – 10. 410 9. 250 6. 586 2 > 42 3. 918 3. 833 1. 372 1>7 2. 090 2. 000 1. 200 1>7 2. 785 2. 500 1. 181 1 > 5. 5 4. 169 4. 333 1. 224 1 > 6. 67 3. 861 3. 833 1. 184 1 > 6. 5 0. 024 0) or â€Å"under-budgets† (? < 0), the impact of ‘lack of ? t’ on ? nancial performance should be the same. Formally, the model we employ, illustrated using |? |, has the following form: PERFi = 0 we also requested objective measures of pro? ability from our sample businesses (Govindarajan and Gupta, 1985). Unfortunately, less than one-third of our sample provided the data. Thus, the use of objective measures for robustness purposes is also impractical. 6. Results and analysis 6. 1. Preliminaries Descriptive statistics for measures used in tests of our hypotheses are presented in Table 2, both for the overall sample of 144 respondents and for the sample partitioned on the basis of whether a written budget is adopted, along with te sts for differences in mean values between partitions. As revealed, there is considerable cross-sectional variation in each measure.Further, there appear to be several signi? cant differences between respondents adopting written budgets and those not. Speci? cally, businesses using budgets have more FTE employees (SIZE, p = 0. 024), are more decentralised (STRUC, p < 0. 001), face a more hostile enviro

Loss of Innocence in To Kill a Mockingbird Essay

â€Å"Maycomb was an old town, but it was a tired old town when I first knew it. In rainy weather the streets turned to red slop; grass grew on the sidewalks, the courthouse sagged in the square.† This environment as Scout Finch accurately describes is not the best or conducive place for young children, loud noises, and games. In the same way as the children, the adults of the novel played games that came from their imaginations, and they themselves are the ones who provided the fear for everyone. As most children do Jem, Scout, and their newly-found friend Dill find amusements to make the days pass by with excitement. When they first met Dill at the beginning, the day’s play is in the backyard. The implication is that it becomes routine for them to play and that each day brings a different experience. When Dill joins them in their daily adventures, they begin to create more elaborate activities. Many days they spent improving the treehouse, and acting out parts of plays by Oliver Victor Appleton, and Edgar Rice Burroughs. There games of Tom Swift the Rover Boys, and The Ghost are the sources of their pleasures for hours and days upon end. Once these games seem rot and overplayed they decide to make Boo Radley come out. Thus the â€Å"Boo Radley†, plays begin. These plays are simply for amusement in the end, they teach Jem, Scout, and Dill lessons about respect, courage, and understanding. The â€Å"Boo†, games begin with a simple dare that Jem has to carry out in order to gain respect from his sister and friend. Scout and Jem both learn about courage through the first Boo game they invented by testing their levels of fear. The game has turned into a dangerous, scary expedition that leaves all three of them shaken. Boo’s unspoken, unseen presence at the fire put him in a new light in Jem’s and Scout’s eyes. Yet again, they see reality and their games slowly fading and losing their meaning. The burning house and Boo’s reappearance show Jem and Scout more pieces of reality and causing them to push that much closer to reality and the adult world and that much more of their innocence and childhood is lost. As the trial crept closer, Scout and Jem each have to test their self-control in accepting or ignoring the multitudes of â€Å"nigger-lover† comments coming their way, by adults as well as children. Scout ends up losing all control when she beats up her cousin Francis, for testing her patience by criticising others. Though Scout doesn’t totally understand her mistake until her uncle Jack, punishes and guides Scout to realization. Jem, of his own fault, has to read to Mrs. Dubose every day and eventually he learns an important lesson. Jem and Scout learn about death and they gain an understanding for the type of person Mrs. Dubose is when they see how her views on life have an effect on her death. The adult games have been going on for a while but Scout and Jem are just beginning to see the games evolving. The most difficult matter for Jem and Scout to understand soon comes to be the trial. Though they have been faced with ignorant people calling them â€Å"nigger-lovers†, they haven’t truly had a full understanding of the slang term until the trial is upon them. Scout, Jem, and Dill experience a faint taste of the adult’s games’ flavor, watching from afar as the mob of common men around Maycomb County gather around Atticus, threatening his and Tom’s lives. Scout still in her innocence, breaks the crowd by recognizing Mr. Cunningham and she, proceeds to praise his son Walter without thought to the fact that Mr. Cunningham realizes that he is a father, not just part of a nameless mob, and, in a sense, he â€Å"walks around in Atticus’s skin† for a moment. The individualizing Scout has done humanizes the originally dehumanized mob and ends the threat to many lives at stake. Scout does not realize the extent of her actions until later on and the understanding raises her up a level of maturity. The game that the men are playing puts lives at risk and shows Scout that adults play with strange sets of rules. She reaches an understanding in the jailhouse scene that still continues to push her into the adult world.