Budgeting, A Tool From The Devil Or A Gift From Heaven
Abstract:
The question where this article is focusing on is why companies continue to use budgeting even though everyone says that budgets are bad. The article has been written on the base of four published papers on this subject. The quality of this article is therefore somewhat limited by the quality of the other four papers.
In this article we first examine the reasons why budgets are believed to be bad. This has several reasons but the most important reasons is because companies use budgets in their performance evaluation. This causes gaming by the employees and this also causes the large amount of time needed to complete the budgets. Due the these two facts the budgets are not very effective anymore in the planning and control process and therefore are considered bad. Next to the fact that the budgets are used for performance evaluation they are also outdated. The traditional budgeting process has been developed in the 1920's when the economy was fairly stable. Now,......
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Approximate Word Count: 3966
Approximate Pages: 16 (250 words per double-spaced page)
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Budgeting, A Tool From The Devil Or A Gift From Heaven
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