Is your organisation ready for beyond budgeting?

Abstract

Purpose

Traditionally, budgeting is considered to be one of the most important management tools to steer the organisation, evaluate its performance and motivate its people. However, criticism of the budgeting process has increased considerably in the past decade. This paper aims to examine an alternative to budgeting known as “beyond budgeting”, comparing it to traditional budgeting.

Design/methodology/approach

Examines some of the literature regarding budgeting and describes the beyond‐budgeting entry scan, a tool which helps organisations to assess whether they are ready to start the powerful change process of abandoning the budget.

Findings

There are many possibilities, on the scale of traditional budgeting to beyond budgeting, to modernise the budgeting process. However, the beyond‐budgeting model deserves serious consideration because it enables an organisation to look with a fresh view at its budgeting process, other planning processes, and organisational structure.

Originality/value

Each organisation should at least explore the benefits of introducing one or more beyond‐budgeting principles. This is especially interesting because research has shown that the more beyond‐budgeting principles an organisation implements, the better it performs.

Citation

de Waal, A.A. (2005), "Is your organisation ready for beyond budgeting?", Measuring Business Excellence, Vol. 9 No. 2, pp. 56-67. https://doi.org/10.1108/13683040510602885