Is The Budget Has Outlived Its Usefulness On The 21st Century?

1996 Words8 Pages
Introduction The purpose of this paper is to examine the question of whether the budget has outlived its usefulness in the 21st century. Over the past 20 years, people within the academic and business worlds have argued that it is time for companies to move away from traditional budgets to a concept known as beyond budgeting (Sandalgaard & Nikolaj Bukh, 2014: 409-410). Researchers and business practitioners have argued that the traditional budget process requires too much time, with some estimating that traditional budgeting requires 20% of management time throughout the year to complete (Neely, Bourne & Adams, 2003: 22). Others have also argued that traditional budgeting is flawed because it provides an incentive for managers to essentially lie about how much money they project to spend or the revenue and profits they project to achieve in order to receive more monies or to demonstrate reduced spending to corporate leaders (Hope & Fraser, 2003: 108). However, some researchers and practitioners have explained that the entire idea that the traditional budgeting process is going to end in favor of the beyond budgeting concept is incorrect given that most organizations continue to prepare and use traditional budgets (Jackson & Starovic, 2004: 2). In the discussion and examination that follows, a brief definition and description of the concept of beyond budgeting is provided. Then, the criticism of the traditional budgeting process by the proponents of the beyond

More about Is The Budget Has Outlived Its Usefulness On The 21st Century?

Get Access