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Tham khảo tài liệu 'pearson education management accounting for decision makers_7', tài chính - ngân hàng, kế toán - kiểm toán phục vụ nhu cầu học tập, nghiên cứu và làm việc hiệu quả | 204 CHAPTER 6 BUDGETING Whether budgets seem to be effective and how they can be made more effective are crucial issues for managers. We shall examine this topic in detail in the next chapter after we have seen how budgets can be used to help managers to exercise control. Who needs budgets Until recently it would have been a heresy to suggest that budgeting was not of central importance to any business. The benefits of budgeting mentioned earlier in this chapter have been widely recognised and the vast majority of businesses prepare annual budgets. However there is increasing concern that in today s highly dynamic and competitive environment budgets may actually be harmful to the achievement of business objectives. This has led a small but growing number of businesses to abandon traditional budgets as a tool of planning and control. Various charges have been levelled against the conventional budgeting process. It is claimed that budgets cannot deal with a fast-changing environment and are often out of date before the start of the budget period focus too much management attention on the achievement of short-term financial targets. Instead managers should focus on the things that create value for the business for example innovation building brand loyalty responding quickly to competitive threats and so on reinforce a command and control structure that concentrates power in the hands of senior managers and prevents junior managers from exercising autonomy. This may be particularly true where a top-down approach that allocates budgets to managers is being used. Where managers feel constrained attempts to retain and recruit able managers can be difficult take up an enormous amount of management time that could be better used. In practice budgeting can be a lengthy process that may involve much negotiation reworking and updating and may add little to the achievement of business objectives are based around business functions sales marketing production and so on . However
