Using Budget Variances for Performance Evaluation: A Comparison Study between Libyan and AngloAmerican Companies Operating in The Libyan oil sector
Keywords:
Budgets, Performance Evaluation, Individualism- Collectivism, Hofstede frameworkAbstract
Organizations must budget their scarce resources such as time, money, energy, raw material, facilities, services, assets, and human resources in order to optimize and maximize utilities and profit from utilizing these resources. Budgets bring to light potential advantages and disadvantages to management in advance and make planning always at the forefront of management’s minds as a priority. Therefore budgets are an important instrument that helps managers to achieve an organization’s goals and serve as a road map towards understanding planning, controlling operations and performance evaluation. The purpose of this study is to compare Libyan companies and Anglo-American companies operating in Libyan oil sector in terms of using variances for performance evaluation. A quantitative approach was utilized and Hofstede (2005) framework employed. Data was collected by 330 usable Questionnaires and Factor analysis, T-test and ANOVA test were used to test the hypothesis. The study finds that Anglo-American companies use variances to evaluate employees’ performance while Libyan companies do not use variances to evaluate employees’ performance.
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