Budgetary Control Tools and Operational Performance of Brewing Firms in South-South Nigeria

Budgetary control remains a vital management tool for enhancing efficiency and aligning organizational activities with strategic goals. However, breweries in South-South Nigeria continue to face operational challenges such as rising input costs, high tax burdens, and fluctuating consumer demand, often worsened by weak application of budgetary control tools. This study examined the effect of budgetary control tools budget flexibility, performance evaluation, variance analysis, participatory budgeting, and budgeting procedure compliance on the operational performance of selected breweries in South-South Nigeria, with operational performance proxied by cost efficiency. The study adopted a survey research design and used a census sampling technique to cover all 103 managerial staff directly involved in budgeting across four brewing firms. Primary data were collected using a structured questionnaire, validated by experts, and tested for reliability with a Cronbach’s Alpha of 0.884. Data were analyzed using Ordinary Least Squares (OLS) regression at a 5% significance level. Findings revealed that budget flexibility (β = 0.496, p = 0.000), performance evaluation (β = 0.699, p = 0.000), and participatory budgeting (β = 0.676, p = 0.000) had significant positive effects on cost efficiency. Variance analysis (β = 0.121, p = 0.112) and budgeting procedure compliance (β = 0.261, p = 0.183) showed positive but insignificant effects. The study concluded that budgetary control tools significantly influence operational performance, with flexible, participatory, and evaluative approaches proving most effective. It recommends prioritizing flexible budgeting, instituting regular performance evaluations, strengthening participatory budgeting, improving variance analysis timeliness, and complementing procedure compliance with robust monitoring systems.