An Organization 's Political Structure

1964 WordsDec 10, 20148 Pages
Abstract Budgets are needed by many organisations and have been used since 1922, they’re considered to be key drivers and assessors of performance within a business. They’re mainly used in an attempt to plan and control organisations and their objectives. An organisation’s political structure is mainly affected by budgets as the managers at the top tend to use budgets as a means of power and authority. Traditional budgeting has both advantages and disadvantages; recently, critics seem to be against the use of traditional budgets within organisations. This is due to traditional budgeting being assumed to be very out of date; it has no way of being used in a contingency plan as it has nothing to do with the changes of markets. If the market changes and the budget do not then it can be deemed to be very inaccurate. Critics are seen as minor compared to the people who convey that the advantages outweigh the disadvantages but critics are attempting to use other types of budgeting; mainly beyond budgeting and zero-based budgeting: other types of budgeting being used are rolling forecasts. Beyond budgeting may be seen as the most effective of budgeting and is deemed better than traditional budgeting (Reka et al). Some businesses criticise traditional budgeting extremely but still do not remove it from their organisation (Oldman, 1999). According to one CEO; traditional budgeting is seen as the “most ineffective practice in management” (Welch) and it also “sucks the fun and dreams
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