Research On Contractual Relationship And Its Application In Enterprise Budget Management

Enterprise budget management is a management tool to maximize the enterprise value.As time goes by,the enterprise budget management methods are continuously improving.However,there are still many problems to be solved because of the lack of the proper handling of the contractual relationships in all the links.Most of the previous studies aim at the problems arising in the budget management process as well as the solutions,not solving the essential problems.Therefore,it's necessary to study based on the essence of the enterprise budget management,which is the contract,analyze the internal and external contract relationships systematicall in the each link of the budget management,define “right”,“responsibility” and “interest” clearly,build a new budget management framework and improve the efficiency and effect,which helps to make full use of the budget management in the operation strategies and the resource utilization.Focusing on the idea that the essence of budget management is the contract,this paper first analyzes each link and purposes of budget management,finds the lack of proper handling of the contractual relationships resulting in the problems like “two skins of the budget”,“eat a big pot of rice”,and “free ride” phenomena in budget management,analyzes the cause of contractual relationship from principal-agent theory,target management theory,responsibility assessment theory,incentive theory,etc.,and sorts out the internal and external contractual relationships existing in all aspects of budget management.Secondly,the paper states that the contractual relationship should be established in all the links of the budget management and its function according to the causes of contractual relationship and the analysis of it with the deductive method.Finally,the paper explains why the enterprise should construct the theoretical framework of contractual budget management with the experience summary method.The case method is properly applied throughout this paper,which studies plenty of cases to explain and prove the relevant opinionsThis paper proposes the idea to build a theoretical framework of contractual budget management through the analysis of the essence of the budget management.It is expected to contribute to solving the existing problems in the budget management and improving the management theory.However,because of limited expertise of the author's,the analysis might not be thoughtful.In addition,the quality of the relevant study might be affected since it is difficult to collect the cases because of the trade secret.The paper will need to be further improved in the future.