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Difference between revisions of "Beyond Budgeting"

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== What is Beyond Budgeting? ==
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'''Beyond budgeting''' is a management approach that challenges traditional budgeting practices and focuses on continuous, flexible planning and decision-making. It was developed in response to criticisms of traditional budgeting systems, which are often seen as inflexible, time-consuming, and disconnected from the realities of the business environment.
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The beyond-budgeting approach emphasizes the importance of aligning organizational goals and resources with changing business conditions, rather than adhering to rigid budget targets. It also emphasizes the importance of decentralized decision-making and empowering employees to take ownership of their work.
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The beyond-budgeting approach includes a number of principles and practices, such as:
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*Continuous planning and forecasting: Rather than relying on a single, annual budgeting process, beyond budgeting organizations engage in ongoing planning and forecasting to respond to changing business conditions.
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*Flexible resource allocation: Beyond budgeting organizations use more flexible mechanisms, such as cost center budgets and rolling forecasts, to allocate resources and make decisions.
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*Performance measurement: Beyond budgeting organizations use a variety of performance measures, including both financial and non-financial metrics, to evaluate organizational performance.
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*Decentralized decision-making: Beyond budgeting organizations empower employees to make decisions and take ownership of their work, rather than relying on a centralized decision-making process.
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The beyond-budgeting approach has been adopted by a number of organizations and has been found to be particularly effective in environments that are highly uncertain or rapidly changing.
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==See Also==
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*[[Organizational Agility]]
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==References==
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<references />

Latest revision as of 12:00, 6 January 2023

What is Beyond Budgeting?

Beyond budgeting is a management approach that challenges traditional budgeting practices and focuses on continuous, flexible planning and decision-making. It was developed in response to criticisms of traditional budgeting systems, which are often seen as inflexible, time-consuming, and disconnected from the realities of the business environment.

The beyond-budgeting approach emphasizes the importance of aligning organizational goals and resources with changing business conditions, rather than adhering to rigid budget targets. It also emphasizes the importance of decentralized decision-making and empowering employees to take ownership of their work.

The beyond-budgeting approach includes a number of principles and practices, such as:

  • Continuous planning and forecasting: Rather than relying on a single, annual budgeting process, beyond budgeting organizations engage in ongoing planning and forecasting to respond to changing business conditions.
  • Flexible resource allocation: Beyond budgeting organizations use more flexible mechanisms, such as cost center budgets and rolling forecasts, to allocate resources and make decisions.
  • Performance measurement: Beyond budgeting organizations use a variety of performance measures, including both financial and non-financial metrics, to evaluate organizational performance.
  • Decentralized decision-making: Beyond budgeting organizations empower employees to make decisions and take ownership of their work, rather than relying on a centralized decision-making process.

The beyond-budgeting approach has been adopted by a number of organizations and has been found to be particularly effective in environments that are highly uncertain or rapidly changing.



See Also



References