Considering the fact that studies into budgeting basically use a reductionist approach, this paper proposes a comprehensive substantive theory based on empirical data to be used in budget analysis. This approach takes into consideration its elements and interdependence by applying the inductive approach based on empirical data (grounded theory) on a qualitative paradigm. The focus was an in-depth two-year study of a large Brazilian financial institution involving several management levels. The main contribution of the study is as a framework that treats all elements of the budget process in a comprehensive and coherent fashion, otherwise impossible using a reductionist approach. As products of the substantive theory, five propositions were developed to be applied in organizations.
Grounded theory; Budgeting; Planning process; Substantive theory; Management control in Brazilian organizations