Between Control and Autonomy
Edited by Katarina Kaarbøe, Paul N. Gooderham and Hanne Nørreklit
Chapter 6: Putting Beyond Budgeting ideas into practice
This chapter examines how management control practices aiming to move firms “Beyond Budgeting” are interpreted and implemented, and how they subsequently affect practice. Practitioners of Beyond Budgeting have criticized budgeting for some time (Wallander, 1999; Hope and Fraser, 2003a), claiming that the widespread dissatisfaction with budgeting results from the cost of preparing budgets, the gaming associated with the budgeting process and the increased environmental uncertainty that companies face. As a result, numerous companies have replaced annual budgets with alternative forms of management control. These approaches range from technical substitutes, such as rolling forecasts and benchmarking, to more comprehensive solutions, including team structures, empowerment, new policies and more philanthropic human resource practices, which some call Beyond Budgeting (BB) (Becker, 2011; Østergren and Stensaker, 2011). Indeed, the literature presents conflicting evidence on the benefits of budgeting practices and the extent to which companies are abandoning those practices. While the evidence shows that firms are increasingly implementing BB, one stream of research suggests that relatively few companies have actually abandoned budgets altogether or plan to do so (Ekholm and Wallin, 2000), and that budgets continue to be used for motivation and for performance evaluations (Libby and Lindsay, 2010).
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