Budgeting Beyond Budgeting: A Tool for Management, Surprise Avoidance, Trust Creation and Organizational Learning

European Accounting and Management Review, Vol. 3, No. 1, p. 24-44, November 2016

21 Pages Posted: 19 Jun 2017

See all articles by Josep M. Rosanas

Josep M. Rosanas

University of Navarra - IESE Business School

Date Written: October 29, 2016

Abstract

While for quite a long time the budget was considered one of the crucial management tools, it has always been subject to criticisms, which have become stronger in the last couple of decades, under the commercial name of “Beyond Budgeting”. In this article, we review the history and foundations of budgeting, to show how typically, the criticisms to budgeting have to be addressed to a bad management style, and not to the technique itself. Then, I use an example to show how budgets can be used to the firm’s advantage in many fields, but mainly in being able to avoid unpleasant surprises, create trust between the different hierarchical levels of the firm, and enhance learning in the positive sense. This allows the firm to avoid vicious circles that are often found in the practice of budgeting because of bad management, not because of the budgets themselves.

Keywords: Budgeting, Management, Trust, Command and Control, Management Control Process

Suggested Citation

Rosanas, Josep M., Budgeting Beyond Budgeting: A Tool for Management, Surprise Avoidance, Trust Creation and Organizational Learning (October 29, 2016). European Accounting and Management Review, Vol. 3, No. 1, p. 24-44, November 2016 , Available at SSRN: https://ssrn.com/abstract=2987996

Josep M. Rosanas (Contact Author)

University of Navarra - IESE Business School ( email )

Avenida Pearson 21
Barcelona, 08034
Spain
34 932534200 (Phone)
34 932534343 (Fax)

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