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Budget busters.

Document Cited in Related
Vincent
AuthorEdgecombe, Mark
PositionLetter to the editor

In his article on forward-looking finance (July/ August), Robert Shaw recommends avoiding the Beyond Budgeting movement. He states that "the thesis of Beyond Budgeting is that budgeting is backward-looking and should be abandoned". But the whole point about Beyond Budgeting is that organisations waste a huge amount of effort by highly talented individuals to create budgets that become out of date the moment they have been approved. From a behavioural point of view, they tend to reward mediocre performance through overstated costs and understated revenues.

Most of us are all too familiar with the way in which, if you reject the cycle of the bottom-up budget process, new macro targets appear at corporate level with plugs to close the gaps and no acceptance down the line. This results in a lack of ownership and leads to cynicism about the whole exercise. Beyond Budgeting also...

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