Nobody downloaded yet

Performance Management - Beyond Budgeting Model - Research Paper Example

Comments (0) Cite this document
Summary
From the paper "Performance Management - Beyond Budgeting Model" it is clear that the Beyond Budgeting model seeks to accomplish its goals by abolishing the toxic environment brought on by the traditional model, in which teamwork is frowned upon and every man is essentially out for himself…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER93.5% of users find it useful
Performance Management - Beyond Budgeting Model
Read TextPreview

Extract of sample "Performance Management - Beyond Budgeting Model"

Download file to see previous pages The executives and managers of a particular organization tend to be very discriminating and cautious when allocating funds, albeit justifiably so. Their allocation of funds to various departments quite clearly needs to be done with the utmost care and deliberation, with more important departments and/or projects requiring more funds. Such a task is often easier said than done, as assigning the budgets of multiple departments within an organization requires copious reliance on one’s skills in planning and micromanagement. Even then, things can still happen that end up forcing sudden changes in the allocation of funds. Budgeting, then, is a concept any company would do well to keep in mind. Despite being relatively dated, the traditional method continues to be widely used all over the world, and in some cases has even been used to great effect. As of late, though, newer and more modern methods have begun to expose flaws in the traditional approach, most notably the Beyond Budgeting approach. To be discussed in this paper is the traditional approach to budgeting, in terms of its most glaring weaknesses, in order to allow a more objective comparison to the Beyond Budgeting model. Traditional Budgeting – Major, Major Weaknesses Hill (2012) summarizes the traditional approach as being a blend of the top-down and bottom-up budgeting methods. This means that top management sets goals that subordinates are to collaborate towards. At the same time, department managers come up with budget plans for their respective departments, which are then given to the top management for review and for consolidation into a plan encompassing the whole company. This setup looks easy enough to understand. Under such an arrangement, the top brass sets goals the company is to work towards, while the heads of various departments report exactly how much money they need to accomplish their functions in this regard. Thus, at first glance, it seems like a very much reasonable approach to the task of budgeting. It may even be considered an effective approach, at least in theory. Unfortunately, in practice, the results tend to be less than satisfactory. First and foremost, it should be pointed out that the persons in charge of setting company goals are the executives. More likely than not, these executives have rather lofty goals they intend to have the company work towards. Nothing is wrong with this in itself; however, the problem is that they go about setting goals without the input of the departmental managers. As such, their goals may very well be beyond their ability to achieve, and end up being not only unrealistic but often arbitrary and unfair. Smith & Lynch (2004) expound on this, saying how allocated funds tend to have little correlation to company goals and performance. In this way, the money is allocated on a more general level, as opposed to being focused on a specific area, with no room for alteration based on the performance of a particular department. This does have some rational basis to it; after all, if a department’s track record happens to be rather sketchy, it would be but natural to be hesitant in giving it too much money to work with. At the same time, though, it might be more prudent to keep the company’s future needs in mind when allocating funds, rather than focusing too much on the past performance of a given department. Murray (2010) also expounds on this in her article. ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(Performance Management - Beyond Budgeting Model Research Paper, n.d.)
Performance Management - Beyond Budgeting Model Research Paper. Retrieved from https://studentshare.org/management/1400370-performance-management-beyond-budgeting
(Performance Management - Beyond Budgeting Model Research Paper)
Performance Management - Beyond Budgeting Model Research Paper. https://studentshare.org/management/1400370-performance-management-beyond-budgeting.
“Performance Management - Beyond Budgeting Model Research Paper”, n.d. https://studentshare.org/management/1400370-performance-management-beyond-budgeting.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Performance Management - Beyond Budgeting Model

Beyond Budgeting

...is no longer valid in the emerging information age that is why hospitality industry needs to move ‘beyond budgeting.’ This is an alternative management model that promotes flexibility, devolution, and value maximization. This suggestion is supported by empirical investigation of hospitality budgeting mostly in the United Kingdom and United States. It is believed that Beyond Budgeting fits the progressive N-form organizational structure wherein full potential of the organization and the people are being liberated. Beyond Budgeting in International Hospitality Industry Introduction...
10 Pages(2500 words)Essay

Management. Performance Based Budgeting

...in Florida Community Colleges, University of Florida, Miami. Finkler, S 2008, Budgeting Concepts for Nurse Managers, Elsevier Health Sciences, Philadelphia. Guajardo, S., et al 2000, an elected Official’s guide to Performance Measurement, Government Finance Officers association, Chicago. Hager, G., et al 2001, Performance-based Budgeting: Concepts and examples, Legislative Research Commission, Committee for Pram Review and Investigation, London. Hood et al 2009, Public spending in hard times, Institute for Fiscal Studies, London. Hughes, O E 2012, Public management and administration: An introduction, Palgrave, Basingstoke. Hughes, O E...
10 Pages(2500 words)Essay

Capital Budgeting Management

...Capital Budgeting Management In coming up with the best choice among the three possible investment alternatives faced by Round Rock Corporation, we have to consider the rate of return and the project life to be applied. The first choice, the construction of the building does not have a required rate of return while the construction of a pool hall and the purchase of a new washing machine require 15% and 10% required rate of return, respectively. It should also be noted that the projects have different life span-20 for the first alternative, five for the second, and ten for the third. In order to compare the three alternatives, this paper will use the highest required rate of return (15%) and life span (20 years.) The cash flow... Budgeting...
2 Pages(500 words)Essay

Beyond Budgeting

.... Traditional budgeting is no longer valid in the emerging information age that is why hospitality industry needs to move ‘beyond budgeting.’ This is an alternative management model that promotes flexibility, devolution, and value maximization. This suggestion is supported by empirical investigation of hospitality budgeting mostly in the United Kingdom and United States. It is believed that Beyond Budgeting fits the progressive N-form organizational structure wherein full potential of the organization and the people are being liberated. Beyond Budgeting in International...
10 Pages(2500 words)Essay

Fashion Blog ( creative writing )

1 Pages(250 words)Article

Performance Based Budgeting - management systems and techniques

.... Bakaroni, K. (2007). Performance-based Budgeting AA Measures Outcomes in Florida Community Colleges Florida: University of Florida. Knaap, P. (2007). Performance management and policy evaluation in the Netherlands: towards and integrated approach. Ministry of Finance, The Hague. Marc, R. (2007). Performance Budgeting, Linking Funding and Results - Palgrave Macmillan, Nov 2007. Retrieved from http://blog-pfm.imf.org/pfmblog/2007/10/making-performa.html Robinson, M. & Last, A. (2009). A Basic Model of Performance-Based Budgeting. New York: International Monetary Fund Segal, G. & Summers,...
6 Pages(1500 words)Term Paper

Management & Budgetary Control and the Beyond Budgeting debate

...– Breaking free from the Annual Fixed Budget A Discussion between Experts from Borealis, Nestlé, Unilever und SAP. The Journal of Business Performance Management, 64-70. Jürgen, H. D. (2002). Beyond Budgeting: A Model of performance management and controlling in the 21st century? Controlling & Finance, 1-3. Katarina, Ø., & Inger, S. (2005). Management control without budgets: A field study of “beyond budgeting” in practice. Management Accounting Research, 1-30. Moolchand, R., Narendra, R., & Koshina, R.-M. (2012)....
8 Pages(2000 words)Essay

Management & Budgetary Control and the Beyond Budgeting debate

...Management & Budgetary Control and the Beyond Budgeting debate Introduction Beyond budgeting is a term used in contemporary day management that involves consideration of a management method where organizations are managed in a manner that appears as though they are in a post-modern world where the only basic new or rather improvement done to the budgeting process that can come into a business comes from competition. This competition ensures that the company performs impressively in a manner that it does not have to carry out regular budgeting out of confidence. It is critical to analyze the various concepts involved in beyond budgeting and further try to understand whether it is advisable for contemporary day companies to take... ...
3 Pages(750 words)Essay

PERFORMANCE BUDGETING

...it suitable for public sector budgeting at large including the federal government. However, it will present major challenges to the federal government. The efficiency ratings used in this model are rudimentary because they measure bureaucratic activity quantitatively rather than qualitatively. This shortcoming means the federal government could by focusing on the quantity of the services rather than its quality. Moreover not all bureaucratic activities are easily quantifiable. Conclusion Performance budgeting system is very handy when evaluating the output of the managers after budget allocations. It provides an insight on how the...
1 Pages(250 words)Coursework

Economic Growth - Solow Growth Model and Beyond

.... Even though Mankiw, Romer and Weil (1992) results enables us to come up with conclusions human capital performs and essential responsibility in the production function, a contrasting conclusion is brought forward by Islam and Zanini (2008). It becomes the case introduction of the specific technological progress of a country in the model. There was a presentation of an individual random effect version of the model. Lee did this presentation, together with Pesaran and Smith (1997), and the model was developed by Islam and Zanini (2008). They introduced heterogeneities in the intercepts and the production slopes function in a heterogeneous, dynamic panel data approach....
7 Pages(1750 words)Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Research Paper on topic Performance Management - Beyond Budgeting Model for FREE!

Contact Us