Beyond budgeting, Strategic Management

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A philosophy that believes traditional or conventional budgeting methods are of little use to management, however beyond budgeting does not believe that budgeting within organisations should be banned altogether. Hope and Fraser argued that the traditional approach to budgeting should be abandoned for the following reasons:

  • The budget process is too rigid and requires conformance to it with not enough flexibility. With the constantly changing business environment, managers need to be having more up to date information to help them make decisions.
  • The budget process is often too bureaucratic, internally focussed and time consuming.

Fixed budgets donot work today. A budget is a too static an instrument and locks managers into past, something they thought last year which it was right.  Managers instead are required to be able to adapt constantly their priorities as well as put their resources where they can create most value for shareholders andcustomers.


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