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Traditional budgeting methods are becoming outdated and counter-productive. The idea that departments will needlessly spend in the final months of the year to ensure their budget is not cut the following is unreasonable. Beyond Budgeting looks to rectify these problems by abandoning traditional methods. The two main drivers for this are;
1. A more adaptive set of management processes2. A highly decentralized organization
Hope and Fraser identified 6 shared common principles that should be used by all companies who want to adopt a Beyond Budgeting technique:
REQUIRED:
Question 1: Debate the impact of Beyond Budgeting, It should include an analysis of its technical implementation and overall impact towards the firm's business model and strategy.
Question 2: Determine the behavioral changes expected from the firm's personnel in line with the changes explained in Question 1.
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