How useful is traditional budgeting in today's business environment?
To support your discussion, critically review evidence from the literature and illustrate your points by providing appropriate examples from the literature. Take into account:
- Alternatives to traditional budgeting
- The influence of organisational culture
Hope, J. and Fraser, R. (2003) Who needs budgets? Harvard Business Review, February, pp. 108-115.
Howell, R. (2004) Turn your budgeting process upside down, Harvard Business Review, July, pp. 21-22.
Jensen, M. (2001) Corporate budgeting is broken - let's fix it, Harvard Business Review, November, pp. 94-101.
Libby, T. and Lindsay, R. M. (2010) Beyond Budgeting or Budgeting Reconsidered? A Survey of North American Budgeting Practice. Management Accounting Research, Issue 21, pp. 56-75.
Consider the traditional budgeting in modern business environment is paramount for reaching targeted strategic goals within a targeted marketplace industry. Thus, the traditional budget is to considering an approach as quantitative expression to outlining a position of action to completing the strategic plan. Try to think of the traditional budgeting verses alternative budgeting aspects through effective planning initiatives. For example, the traditional budget model implies on outlining strategic goals and objectives that reflects a developing forecasts for revenue generating on returns. Some key areas of connections to the alternative of traditional budgeting in modern business environment entail the following:
a) Costs Budget Analysis (try to think of the operative costs that sustains every facet of business decisions to hindering on a strategic implementation of resources aiming for reduction of expenditure).
b) Production Assessment (try to think of the productive in reduction of wasted funds on unproductive outcomes).
c) Cash Flows Analysis (try to think the means of knowing what and when flows are increasing or decreasing).
Basically, in the research should reflect the usefulness in traditional budgeting in today's business environment by "covering key areas" of imperative areas for supporting a long-term element. Try to think of the main areas of budgeting for today's business environment as the following elements to utilizing financial data analysis based on:
a) The organization's financial activities and current landscape for facilitating coordination in business initiatives (try and think of the coordination of organization's financial activities in deciphering which new business projects worthy of investment, in insufficient choices, the outcome can restricts long-term profitability).
b) Management requires new information to thereby comparing past financial strength or weaknesses to indicate proper new directive (try and think of newer choices that proposes more successes, thus, the comparative data on sales, losses, etc. provides an assessment in future budgeting to effectively reaching the targeted goals).
c) Budgeting in today's business environment offers a strong incentive when weaknesses are exposed (try and think of projects reports indicated that excessive contingency funds ...
This solution provides a review into budgeting in modern business for effectively managing operations.