The impact of cultural differences on follow up on budget variances: an empirical comparison between Libyan and Anglo-American companies operating in the Libyan oil sector

Abstract EN

Budget performance evaluation is when management uses budget variances in performance evaluation of individuals.

Budget action is when management attribute budgetary variances to a manager’s area of responsibility.

Attainment of Budget’s targets should logically lead to incentive rewards.

The purpose of this study is to compare Libyan companies and AngloAmerican companies operating in Libyan oil sector in terms of follow up on budget variances.

A quantitative approach was utilized and the dimension Masculinity vs.

Femininity of Hofstede (2005) framework employed.

330 usable Questionnaires was collected and Factor analysis, Ttest and ANOVA test were used to test the hypothesis.

The study finds that Anglo-American companies usually take action towards unfavourable variances while Libyan companies do not usually take actions towards unfavourable variances.

The contribution of the study is to provide new evidence to support the impact of societal culture on budgeting setting generally and specifically demonstrating the impact of societal culture on other aspects of budgets and budgeting processes in the Arab context which is important in the global oil and gas industry.

The finding of the study in the Libyan oil sector supports Hofstede’s Masculinity vs.

Femininity (2005) cultural dimension.