Nearly all organizations include budgeting as a part of their management control processes. Budgeting serves planning, evaluation and control purposes, through which managers ensure that the organizational decisions are made consistently with certain objectives or strategies. Due to numerous shortcomings of traditional budgeting, organizations have widely adapted alternative approaches to budgeting. Simultaneously, the controller has undergone an identity change from being specialized to number crunching and maintaining the accounting systems (bean counter) to being a business-oriented active advisor and participant in decision-making (business partner).

However, changes in budgeting and the controller’s identity are examined as rather separate phenomena in management accounting research. Given the fact that the controller tends to be an active participant in budgeting, a deeper understanding of how budgeting change and the controller’s identity change relate to each other is required. To shed light on this, the thesis examines how the design and use of contemporary budgeting shift the controller’s identity towards business orientation. Furthermore, the controller’s identity construction within contemporary budgeting is investigated to understand the controller’s identity transformation more thoroughly. Since changes in budgeting and the controller’s identity take place in a wider management accounting culture, they are also examined as institutionalized structures.

The exploratory single-case study illustrates how contemporary budgeting may shift the controller’s identity towards business orientation. Rolling forecasting and the convergence of strategy, long-term planning and budgeting steer the controller towards continuous, proactive and strategic planning, thus contributing to the controller’s identity transformation towards business orientation. Managers’ expectations of the controller enacting the business partner identity and the encouragement to embrace this identity in contemporary budgeting positively affect the controller’s identity shift towards business orientation. Contemporary budgeting as a discursive practice and the discursive notions of the controller’s proper behavior construct the business partner identity which the controller embraces through identity work. Both budgeting change and the controller’s identity change are supported by the redefinition of the old taken-for-granted and legitimate assumptions regarding budgeting and the controller’s identity into new ones and by routinizing these through actions over time. However, conflicting discursive notions and incomplete routinization can obstruct the wide entrenchment of contemporary budgeting and the controller’s business partner identity in organizations. The interplay between contemporary budgeting and the controller’s identity change is not straight-forward as it deals with entrenching new assumptions, beliefs, and understanding in the whole management accounting function.