The Importance Of A Cultural Framework That Is Suitable For The Modern Dynamic Business Environment

1222 Words Mar 4th, 2016 5 Pages
1.0 INTRODUCTION

Budgets are very important part of business environment. They are considered to be essential key drivers and evaluators for planning and control as well as managerial performance since 1920 (Reka et al., 2014). This report aims to investigate how to promote a cultural framework that is suitable for the modern dynamic business environment. Firstly, it will explain the concept of budgetary control, It will then point out advantages and disadvantages of the current traditional system and how some weaknesses can be addressed by implementing Beyond Budgeting (BB) using practical examples of organisations that have been successful and what were the problems that they have encountered. It will also discuss why some organisations may not want to abandon budgets. These findings will then give some guidance to help Sheffield Surgical Ltd. to decide which direction will suit the company the best.

2.0 FINDINGS

2.1 The Concept of Budgetary Control

The budgetary control is a system of processes controlling costs of organisations, which helps with co-ordination, planning measuring and rewarding (Campbell, 1985; Horngren, Datar and Rajan, 2012). It is defining whether predictions of the future period figures of calculated variances of the budget match with actual financial results, making the progress easily measurable. Findings of the comparison of these figures can then help the organisation to find out differences and enable managers to decide how to correct them…
Open Document