What are the advantages of traditional approach to budgeting

Reference no: EM131828858

Questions :

What are the disadvantages of traditional approach to budgeting ?

What alternative approaches did the authors recommended beyond budgeting ?

What are the advantages of these approaches ?

Coursework Question:

Budgetary Control has fast become popular among corporations soon after the publication of the first textbook on business budgeting in 1922 by James O. McKinsey, the founder of the famous McKinsey and Company. By the 1980s, it has become a ritual that companies performed annually.

However, in 2003, Jeremy Hope and Robin Fraser, published an article "Who needs Budget?" in the Harvard Business Review (Feb 2003) declaring that "Budgeting, as most corporations practice it, should be abolished. That may sound radical, but doing so would further companies' long-running efforts to transform themselves into devolved networks that can nimbly adjust to market conditions".

Many supported this view and proponents of Beyond Budgeting criticise traditional budgeting as a method of steering senior managers toward particular decisions.

Reference no: EM131828858

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