A contingency-based investigation of the impact of perceived environmental uncertainty on performance management systems: direct effects, mediation, moderation, and organisational performance

In recent years, organisations have faced an increasingly volatile and unpredictable environment, intensifying the need for more adaptive performance management systems. While various approaches have emerged to support organisational adaptability, including modifications to traditional budgeting and the rise of beyond budgeting, there remains limited clarity on how these approaches are selected or configured in response to perceived environmental uncertainty. The literature presents competing perspectives on the relevance and application of these methods, with some scholars advocating the complete abandonment of traditional budgets, while others support the partial relinquishment, enhancement, or the incremental adjustment to both the budget and organisational structure. Utilising a package view focusing on budgeting and BB, this research examines the extent to which perceived environmental uncertainty influences the configuration of performance management systems through flexible budgeting approaches, organisational structure, and adaptive control initiatives. Grounded in contingency theory, this research further examines whether these configurations contribute to effective organisational performance. To offer a granular view, the source and the degree of perceived environmental uncertainty are considered, with multiple configurations examined across varying degrees of uncertainty. Furthermore, the moderating role of the adaptive leadership mindset in the relationship between environmental uncertainty and the configuration of performance management systems is also acknowledged and explored.