Register or log in at GRIN

Your e-mail-address or password is wrong
Register now
For new authors: free, easy and fast
This will be used as your user name, please specify a valid e-mail address

Lost password

Your e-mail-address or password is wrong

Request a new password
Are traditional budgeting practices out of kilter with companies' competitive en... close

Please wait

Please install the Adobe Flash Player if no e-book is displayed.

Are traditional budgeting practices out of kilter with companies' competitive environment

Essay, 2004, 13 Pages
Author: Sven Röhm
Subject: Economics / Business: Controlling

Details

Event: Managing Financial Resources
Institution/College: Teesside Business School - University of Teesside (Tesside Business School)
Tags: Managing, Financial, Resources
Category: Essay
Year: 2004
Pages: 13
Grade: 80% äquivalent zu 1,0 (A)
Language: English
Archive No.: V24457
ISBN (E-book): 978-3-638-27331-2
ISBN (Book): 978-3-638-75997-7
File size: 85 KB

Abstract

Hope and Fraser (2002) argue that traditional budgeting is “out of kilter with [companies’] competitive environment”. Indeed, traditional budgeting has faced harsh criticism in the recent years. Eye-catching titles, e.g. ‘The budget – an unnecessary evil’ (Wallander, 1999), ‘Bye, bye budget – the annual budget is dead’ (Gurton, 1999), and ‘Take it away’ (Hope and Fraser, 1999b) show the “anti”- traditional budgeting campaign led by some critics. According to Hope and Fraser (1999a), some big European and American companies have dismantled the budget or are about to do so. It seems that the theoretical debate increasingly changes the companies’ attitudes towards the traditional budgeting. Especially some Scandinavian companies head for new forms of operational and strategic control means, e.g. balanced scorecards. About 40 per cent of Swedish companies stated in a survey that they already work on changes to the budgeting process (Glader et al., 1996). Above all, rolling forecasts should play a more important role in the future, raising the responsiveness to changing external factors. According to Hope and Fraser (2003) only 20 per cent of organisations change their budget within the fiscal year. This rigidity is not up-to-date to the fast-changing competitive economy. Therefore rolling forecasts could be more effective for observing and controlling short-term changes. This paper will primarily deal with the criticism on traditional budgeting, especially in relation to Hope and Fraser’s assertion. Furthermore, this paper examines whether there is an impact of the above noted campaign on economy, and companies increasingly abandon its budgeting systems due to the criticisms.


Excerpt (computer-generated)

Are traditional budgeting practices
“out of kilter with [companies’]
competitive environment”
(Hope and Fraser, 2002)

 


by: Sven Roehm

Table of contents

1 Introduction  1

2 The purpose of traditional budgeting…  2

3 …in a highly competitive environment  4

4 Budgetary control and its disadvantages  6

5 Is the traditional budget really out of kilter with competitive environment?  7

6 Summary 9

7 Conclusion 9

References II
 

 

 


 

1 Introduction

Hope and Fraser (2002) argue that traditional budgeting is “out of kilter with [companies’] competitive environment”. Indeed, traditional budgeting has faced harsh criticism in the recent years. Eye-catching titles, e.g. ‘The budget – an unnecessary evil’ (Wallander, 1999), ‘Bye, bye budget – the annual budget is dead’ (Gurton, 1999), and ‘Take it away’ (Hope and Fraser, 1999b) show the “anti”- traditional budgeting campaign led by some critics.

According to Hope and Fraser (1999a), some big European and American companies have dismantled the budget or are about to do so. It seems that the theoretical debate increasingly changes the companies’ attitudes towards the traditional budgeting. Especially some Scandinavian companies head for new forms of operational and strategic control means, e.g. balanced scorecards. About 40 per cent of Swedish companies stated in a survey that they already work on changes to the budgeting process (Glader et al., 1996). Above all, rolling forecasts should play a more important role in the future, raising the responsiveness to changing external factors. According to Hope and Fraser (2003) only 20 per cent of organisations change their budget within the fiscal year. This rigidity is not up-to-date to the fastchanging competitive economy. Therefore rolling forecasts could be more effective for observing and controlling short-term changes. This paper will primarily deal with the criticism on traditional budgeting, especially in relation to Hope and Fraser’s assertion. Furthermore, this paper examines whether there is an impact of the above noted campaign on economy, and companies increasingly abandon its budgeting systems due to the criticisms. Topic B Managing Financial Resources

2 The purpose of traditional budgeting…

[...]


Comments

No comments yet

Add Comment
Your comment is reviewed before being published

Other users also were interested in the following titles:

Brand Analysis of Lion Nathan China

Author: Frauke Strathkötter
Economics / Business: Marketing, Corporate Communication, CRM, Market Research, 2003 Download as PDF-file for 4,99 EUR

Corporate Codes of Ethics

Author: Christian Bacher
Economics / Business: Business Ethics, Corporate Ethics, 2005 Download as PDF-file for 12,99 EUR

Corporate Social Responsibility

Author: Christian Bacher
Economics / Business: Business Management, Corporate Governance, 2005 Download as PDF-file for 8,99 EUR

Bedeutung und Messung von Kundenzufriedenheit im CRM

Author: Tobias Pickl
Computer Science - Commercial Information Technology, 2002 Download as PDF-file for 14,99 EUR

A Strategic Case Analysis of Ice-Fili

Author: Christian Vögtlin
Economics / Business: Business Management, Corporate Governance, 2006 Download as PDF-file for 6,99 EUR

Grundlagen der Optionsscheinanlage

Author: Andre Merz
Economics / Business: Banking, Stock Exchanges, Insurance, Accounting, 2002 Download as PDF-file for 8,99 EUR

This text can be quoted and accessed from this url:

http://www.grin.com/e-book/24457/are-traditional-budgeting-practices-out-of-kilter-with-companies-competitive
please wait Please wait