Beyond The Allure Of Budgeting: Assessing The Suitability Of Budget For Organisational Performance In The 21st Century
AbstractBudgets are important instruments for organisational management, control and planning. Following the urgency of contemporary business challenges and radical shift in business structure owing to global financial volatility, there is a growing need to rethink budgeting. Also, factors such as increasing shareholders’ expectations, impact of new technology, knowledge economy, innovation and other organisational integers have impacted on how managers think of firms in relation to budgeting. Given the limitations posed by traditional budgeting system as well as the urgency of recent global financial meltdown, there is pressure on managers and leaders to devise other ways to effectively manage organisations for productivity and competitiveness. In this paper, the Balanced Scorecard model will be used as an alternative method to traditional budgeting system. Consequently, the major concern of this paper is to articulate the limitations of (traditional) budgeting in relation to the Balanced Scorecard (BSC) method as well as in the context of what Hope and Fraser (2003) called ‘‘Beyond Budgeting’’ schema for more effective ways of managing organisations in the 21st century. The dilemma of ‘‘annual performance trap’’ is also implicated in this light. As budget restricts innovative, fluid and value-generating ways of managing organisations through its instrumentality of control and mechanistic co-ordination, troubled or distressed organisations are struggling to leverage on their opportunities. This adversely affects productivity levels.
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Bibliographic InfoArticle provided by Czestochowa Technical University, Department of Management in its journal Polish Journal of Management Studies.
Volume (Year): 5 (2012)
Issue (Month): 1 (June)
Balanced Scorecard; Budgeting; Global Financial Crisis; Organisational Performance.;
Find related papers by JEL classification:
- M40 - Business Administration and Business Economics; Marketing; Accounting - - Accounting - - - General
- C65 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Miscellaneous Mathematical Tools
- F30 - International Economics - - International Finance - - - General
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Dan Constantin Danuletiu, 2010. "Fiscal Decentralization And Issues Of Municipal Bonds. The Case Of Romania," Polish Journal of Management Studies, Czestochowa Technical University, Department of Management, vol. 1(1), pages 70-78, May.
- Lukka, Kari, 1988. "Budgetary biasing in organizations: Theoretical framework and empirical evidence," Accounting, Organizations and Society, Elsevier, vol. 13(3), pages 281-301, April.
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