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The need to abandon command-and-control style management and its associated time-consuming bureaucratic processes was articulated in a concept known as Beyond Budgeting as far back as 1998. In the years since, a growing need for organizational adaptability and agility has only made this approach more compelling.

British consultants Jeremy Hope, Robin Fraser, and Peter Bunce founded the Beyond Budgeting Round Table (BBRT) in 1998 to promote the end of traditional command-and-control management in favor of a more decentralized, empowering, and adaptive model. Radically, as its name suggests, the Beyond Budgeting model even eliminates that most pervasive of all performance management processes: the annual budget. In 2014, HEC Paris professor of management control Sebastian Becker published a study of four companies that adopted the “Beyond Budgeting” model: a German family-owned drug retailer with 30,000 employees; an Austrian petrochemical company with Scandinavian roots and 5,000 employees; a business unit of a large Swiss bank; and a medium-sized German heating equipment manufacturer. Given the continued emphasis on organizational agility in today’s business environments, Becker was intrigued to discover how these four companies abandoned traditional management and performance methods in favor of this more agile model and the consequences of doing so.

Why companies make the change
Academics and professionals have criticized budgeting for years because of dissatisfaction with its perceived ineffi ciency, ineffectiveness, and dysfunction. Like most companies, all of those studied by Becker once used budgeting…Read this article

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Is budgeting just slowing you down?

Becker SébastianBased on an interview with Sebastian Becker, “How to Abandon Budgets For the Good of the Company,” (Knowledge@HEC, February 2015), and “When Organisations Deinstitutionalize Control Practices: A Multiple-Case Study of Budget Abandonment,” by Sebastian Becker (European Accounting Review, December 2014, vol.23, N°4, pp.593-623)