Disadvantages of Budget
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Bachelor’s Thesis Faculteit der Economische Wetenschappen Sectie: Accounting, Auditing and Control Studie: Bedrijfseconomie
Budgets
Is the use of budgets out of date?
S.A.D. Sardjoe 298142ss July 12, 2009
Table of contents
Chapter 1 Introduction 2
1.1 Purpose 2
1.2 Method 2
1.3 Scope 2
1.4 Outline 3
Chapter 2 Budgets 4
2.1 Definition of budgets 4
2.2 The use of budgets 5
2.3 The process of budgeting 5
2.4 The advantages of budgets 6
2.5 The disadvantages of budgets 7
2.6 Conclusion 8
Chapter 3 The relevance of budgets within Management and Control 10
3.1 Management control system 10
Management 10
Control 10
System 11
3.2 Budgeting within the Management control system 11
Chapter 4 Beyond Budgeting 13
4.1 The Beyond Budgeting concept 13
4.2 Advantages of Beyond Budgeting 14
4.3 Disadvantages of Beyond Budgeting 15
4.4 Differences between the traditional budgeting system and beyond budgeting 15
4.5 Conclusion 16
Chapter 5 Conclusion and recommendations 17
Literature 19
Chapter 1 Introduction
For a long time, budgets have been the most important management and control tool. Budgets are being used to give direction to an organization and provide targets. Today, thanks to the enormous success of budgets throughout the years, budgets are being used in almost every company. However, like nature, the management and control tools evolve. There are new management and control tools which are developed. One example is the beyond budgeting model. Yet almost every company is still using budgets.
1.1 Purpose
This thesis attempts to give a clear understanding what budgets are and how there are being used. In addition the beyond budgeting model will be examined as a newly developed management tool. This leads to the following main question of this thesis:
Bachelor’s Thesis Faculteit der Economische Wetenschappen Sectie: Accounting, Auditing and Control Studie: Bedrijfseconomie
Budgets
Is the use of budgets out of date?
S.A.D. Sardjoe 298142ss July 12, 2009
Table of contents
Chapter 1 Introduction 2
1.1 Purpose 2
1.2 Method 2
1.3 Scope 2
1.4 Outline 3
Chapter 2 Budgets 4
2.1 Definition of budgets 4
2.2 The use of budgets 5
2.3 The process of budgeting 5
2.4 The advantages of budgets 6
2.5 The disadvantages of budgets 7
2.6 Conclusion 8
Chapter 3 The relevance of budgets within Management and Control 10
3.1 Management control system 10
Management 10
Control 10
System 11
3.2 Budgeting within the Management control system 11
Chapter 4 Beyond Budgeting 13
4.1 The Beyond Budgeting concept 13
4.2 Advantages of Beyond Budgeting 14
4.3 Disadvantages of Beyond Budgeting 15
4.4 Differences between the traditional budgeting system and beyond budgeting 15
4.5 Conclusion 16
Chapter 5 Conclusion and recommendations 17
Literature 19
Chapter 1 Introduction
For a long time, budgets have been the most important management and control tool. Budgets are being used to give direction to an organization and provide targets. Today, thanks to the enormous success of budgets throughout the years, budgets are being used in almost every company. However, like nature, the management and control tools evolve. There are new management and control tools which are developed. One example is the beyond budgeting model. Yet almost every company is still using budgets.
1.1 Purpose
This thesis attempts to give a clear understanding what budgets are and how there are being used. In addition the beyond budgeting model will be examined as a newly developed management tool. This leads to the following main question of this thesis: