Moving beyond Beyond Budgeting: A case study of the dynamic interrelationships between budgets and forecasts

46 Pages Posted: 30 May 2024

See all articles by Per Nikolaj Bukh

Per Nikolaj Bukh

Aalborg University Business School

Amalie Ringgaard

Aalborg University Business School

Niels Sandalgaard

Aalborg University

Date Written: May 29, 2024

Abstract

This study examines how budgeting and forecasting are used in a bank that abandoned the corporate budget but later reintroduced it. Although companies that implement Beyond Budgeting may reintroduce budgets, how companies returning to traditional budgeting maintain Beyond Budgeting elements and incorporate them into the budgeting process has not been previously studied. Specifically, we address how forecasts are deployed as part of the budgeting process. The paper is based on a case study with interviews as the primary data source. We show how the interrelationships between budgets and forecasts change through three phases; before, during, and after abandonment, and illustrate how the two control elements can simultaneously replace each other for specific groups of line items and become complementary for profit planning and control. We unfold how revenue-forecasts complement cost-budgets to fulfill various budgeting purposes, especially when forward-looking tight control is emphasized to ensure outward accountability. Altogether, the study demonstrates how management control systems evolve over time when companies implement control elements with inspiration from the Beyond Budgeting model alongside budgets.

Keywords: Beyond Budgeting, budgeting, forecasting, management control systems, banking

JEL Classification: M41

Suggested Citation

Bukh, Per Nikolaj and Ringgaard, Amalie and Sandalgaard, Niels, Moving beyond Beyond Budgeting: A case study of the dynamic interrelationships between budgets and forecasts (May 29, 2024). Available at SSRN: https://ssrn.com/abstract=4846931 or http://dx.doi.org/10.2139/ssrn.4846931

Per Nikolaj Bukh (Contact Author)

Aalborg University Business School ( email )

Aalborg
Denmark

Amalie Ringgaard

Aalborg University Business School ( email )

Aalborg
Denmark

Niels Sandalgaard

Aalborg University ( email )

Fredrik Bajers Vej 7E
Aalborg, DK-9220
Denmark

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