A Review of the Barriers to Implementing Operational Budgeting in Iranian Free Trade-Industrial Zones

Reforming the budgeting systems will make an enormous contribution to the economic prosperity of the country. Although the full implementation of operational budgeting is confronted with barriers, such as allowing the low-rank executive managers more authority, changing the governmental approach to accounting into accrual approach, and reforming the Public Accounting Act, changing the budgeting system to operating budgeting is inevitable to and necessary for the economy of the country. The purpose of this study is to review the barriers to implementing the operational budgeting based on Shah Model in Iranian free trade-industrial zones, and to suggest ways of overcoming them. The participants of this study were selected from among the financial managers, programming and budgeting managers of free trade-industrial zones, and also the staff of secretariat of high council of Iranian Free Trade-Industrial Zones. Data needed to test the research hypotheses were gathered through interview and questionnaire. To ensure the normal distribution of the responses for each test agent, “Kolmogorov-Smirnov” test was used. Finally, to test the research hypotheses, «T one sample" and "Median test" were used. The results of the study are indicator of the fact that inability to assess the performance, inefficiency of human resources, lack of legal and procedural authority, and also the lack of motivation for acceptability were identified as the barriers to implementing the operational budgeting based on Shah Model. Nevertheless, factors such as technical ability, organizational authority, political acceptance, and managerial acceptance were not among those identified as barriers. The Findings of this study attest to the fact that at the present time, Free Trade-Industrial Zones Organizations do not have enough ability, authority and acceptability to execute operational budgeting.