Beyond Budgeting: How Managers Can Break Free from the Annual Performance Trap [Hardcover]

Jeremy Hope (Author), Robin Fraser (Author)

Book Description

Publication Date: April 11, 2003 | ISBN-10: 1578518660 | ISBN-13: 978-1578518661

The traditional annual budgeting process--characterized by fixed targets and performance incentives--is time consuming, overcentralized, and outdated. Worse, it often causes dysfunctional and unethical managerial behavior. Based on an intensive, international study into pioneering companies, Beyond Budgeting offers an alternative, coherent management model that overcomes the limitations of traditional budgeting. Focused around achieving sustained improvement relative to competitors, it provides a guiding framework for managing in the twenty-first century.

Editorial Reviews

Review

"Beyond Budgeting is a must-read for anyone interested in seeing the future of performance management." -- Planning Perpectives, Issue #29, September 23, 2003

From the Inside Flap

"Beyond Budgeting distills the new management model for the Information Age. This is a book for leaders with the courage and insight to sweep away an enervating management dogma and release the latent wealth in their organizations."
—Gregor Pillen, EMEA Head of Financial Management Solutions, IBM Business Consulting Services

"Hope and Fraser blast away the ‘old’ budget approach in Beyond Budgeting. Their thorough analysis and synthesis of many successful business cases writes the blueprint for competitive success in the current turbulent hypercompetitive economic environment."
—Michel J. Lebas, Professor of Management Accounting, H.E.C. School of Management, France

"Hope and Fraser brilliantly expose what lies at the heart of most failed attempts to foster corporate agility and innovation—the ‘fixed performance contract’ and the low trust mindset in which it is set. Beyond Budgeting is a true paradigm shift!"
—Steve Morlidge, Unilever Bestfoods UK

"Beyond Budgeting has inspired UBS not only to shift its focus away from traditional, detailed budgets but also to take the next steps and implement plans with adequate levels of detail; and further redirect its focus toward trend analysis, scenario planning, and rolling forecasts."
—Peter Thurneysen, UBS AG, Head Group Controlling & Accounting

See all Editorial Reviews

Product Details

• Hardcover: 336 pages
• Publisher: Harvard Business Review Press (April 11, 2003)
• Language: English
• ISBN-10: 1578518660
• ISBN-13: 978-1578518661
• Product Dimensions: 6.4 x 1.1 x 9.3 inches
• Shipping Weight: 1.2 pounds (View shipping rates and policies)
• Average Customer Review: 4.6 out of 5 stars  See all reviews (8 customer reviews)
• Amazon Best Sellers Rank: #247,196 in Books (See Top 100 in Books)

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Most Helpful Customer Reviews

9 of 9 people found the following review helpful

4.0 out of 5 stars Excelent real life cases July 1, 2004

By Johan Løvlie

Format:Hardcover

This book does capture the findings from the work of Beyond Budgeting Roundtable in a excellent way. The cases in the book are real and are brilliant proofs of the fact that it is possible to run even a large corporation with out traditional budget models. I'm really looking forward to the follow up.

7 of 7 people found the following review helpful

4.0 out of 5 stars No more budgets February 20, 2010

By Bas Vodde

Format:Hardcover|Amazon Verified Purchase

"Beyond Budgetting" describes a new way of managing your organization and its performance, a way without having budgets. Not having budgets does not mean chaos, it does not mean no control or visibility, it means using different organizational structures to manage the performance and resource distribution within your organization.

The book consists of four parts. The first part describes budgeting and the problems that are inherent to the budgeting process. It introduces an alternative based on what several companies have done, with the prime example being the Swedish Handelbanken. It splits the beyond budgeting concept it two adaptive process for managing performance and radical decentralization. These are covered in the next two parts.

The second and third part describe the two legs of beyond budgeting. The structure of the chapters is similar. The first chapter describes three cases of organizations that implemented these and similar concepts. The second chapter covers the principles while the last chapter in each part covers hints for implementation.

The adaptive process for managing performance suggests to set relative targets, decouple rewards from target setting, provide resources on request, and provide up to date and transparent information to everyone within the organization. Radical decentralization is build on top of this and recommends to empower people close to customers to make the decisions, work within teams and create an open and transparent information system that supports these people to make local decisions.

The last part of the book contains two chapters. The first one describes tools (and could have been left out from my perspective, didn't added much to the rest of the book). The second chapter described an overall vision for management in the 21th century and how Beyond Budgeting fits in that.

I liked the book, it challenges a whole lot of management assumptions and demonstrates an alternative not based on speculation but based on real cases. My only objection to the book was exactly that. Beyond budgeting is created based on what a couple of real companies do... but these companies all did slightly different things at different degrees. This variance makes the book sometimes hard to read as it makes it hard to fix the concept "beyond budgeting." Perhaps this was the authors intention... though from the readers perspective it would probably be easier to first describe the concepts and then move to case studies and show how different companies implemented the beyond budgeting concepts. Because of this, I considered a 3 star review... but as this book really provides a new concept, I feel that wouldn't be fair. So, four stars and a definitive recommendation for people who are tired of budgeting hell (aren't we all?) and like to know if there is an alternative. There is... it is called: Beyond budgeting!

12 of 14 people found the following review helpful

4.0 out of 5 stars Good Book on Relatively New Topic December 29, 2003

By "moshe_gfkl"

Format:Hardcover

As a business consultant with many years experience in budgeting, I found this a very useful overview of a relatively new topic in finance. The authors clearly show the limitations of the traditional budgeting process and present a comprehensive alternative.
However, while the book brings many examples from real companies, many of the ideas still seem a little conceptual and difficult to imagine how they would actually work in practise.

This book will certainly interest anyone seriously involved in budgeting.