'The budget is a tool of repression rather than innovation' cited by Essay

'The budget is a tool of repression rather than innovation' cited by Hope and Fraser - Essay Example Budgets also enable the measurement of actual financial operations against a forecast and establish the costs constraints of a project, operation and program (Daum 2001, p. 21). Budgets have been used as tools for aiding the planning of actual operations by ensuring managers consider changes in their environment. Additionally, budgets enable managers to outline steps and measures for ensuring the organization meets it objectives. Budgets crucially help managers to examine the relationships between the different departments and their own operations. Most importantly, budgets control resources, and help in communicating organizational plans within the different settings (Drury 2007, p. 31). It is equally crucial to mention that budgets motivate managers to work towards the achievement of the organization’s objectives, provide visibility of the organization’s performance, and help when evaluating the performance of managers. Recently, budgets and budgeting processes have f aced immense criticism consequently attract publicity. Critics to budgets and budgeting note that budgets provide barriers to successful management and utilization of organizational resources. According to these critics, budgets influence managers and employees in counterproductive ways. It is essential to note the movement of current economies and their rapid rates of maturity are negatively affected by budgets because they impede flexibility of organizations (Daum, 2004, p. 41). Since 1998, several propositions have been made for the development of a new management philosophy called Beyond Budgeting. These proposals emerge as responses to dissatisfactions with traditional management approaches. These approaches focus on management as a function of budgeting through control cultures and command influences. In recent years, organizations have faced immense pressure to change their management strategies and approaches. This has been motivated by the need to shift from traditional man agement strategies because of changing business and operational environments. It is crucial to note that company and organizational activities become complex when seeking income generation. In this case, company activities have grown in dynamics, complexity and competitiveness despite the uncertain and turbulent business conditions (Dugdale, and Lyne, 2006, p. 51). Currently, businesses are not limited to production and sales, but rather, they engage in different economic and non-economic activities. Currently, organizations need to operate with the intention of addressing quality aspects of the business spectrum to maintain their productivity and competitiveness as well as maintain contact with their customers. Therefore, companies have begun identifying internal processes that impede their functioning in order to respond to challenges within the current business environment. In the process, companies are getting rid of their inflexible processes or procedures that limit their flex ibility (Hope, and Fraser, 1999, p. 67). The Beyond Budgeting model provides an essential strategy for organizations to fill the gap left by abandoning budgeting. This strategy provides tools that enable managers to achieve their market objectives and develop plans. It also prevents managers from focusing their energies on their budget requirements. The Beyond Budgeting approach provides organizations with platforms for controlling and managing