Budgeting Beyond Budgeting

17 Pages Posted: 27 Sep 2016

See all articles by Josep M. Rosanas

Josep M. Rosanas

University of Navarra - IESE Business School

Date Written: May 25, 2016


While for quite a long time the budget was considered a crucial management tool, it has always been subject to criticism. The criticism has become stronger in the past couple of decades, with an alternative system going by the trade name Beyond Budgeting. In this paper, we review the history and foundations of budgeting to show how, typically, criticism of budgeting has addressed a bad management style and not the technique itself. Then an example is given of how budgeting can be used to a firm's advantage in many fields but mainly so it can avoid unpleasant surprises, create trust between the firm's different hierarchical levels, and enhance learning in the positive sense. This allows the firm to avoid the vicious circles that are often found in budgeting practice because of bad management, not because of the budgets themselves.

Keywords: Budgeting, Management, Trust, Command and control, Management control process

JEL Classification: M14, M410

Suggested Citation

Rosanas, Josep M., Budgeting Beyond Budgeting (May 25, 2016). IESE Business School Working Paper No. Working Paper WP-1139-E, Available at SSRN: https://ssrn.com/abstract=2844085 or http://dx.doi.org/10.2139/ssrn.2844085

Josep M. Rosanas (Contact Author)

University of Navarra - IESE Business School ( email )

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Barcelona, 08034
34 932534200 (Phone)
34 932534343 (Fax)

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