Beyond Budgeting Essay Example | Topics and Well Written Essays - 2500 words

Beyond Budgeting - Essay Example To complete such development, a change of accounting system must also be considered, most of which is to get rid of budget or ‘managing with numbers’ and set goals for a longer period of time. Traditional budgeting is no longer valid in the emerging information age that is why hospitality industry needs to move ‘beyond budgeting.’ This is an alternative management model that promotes flexibility, devolution, and value maximization. This suggestion is supported by empirical investigation of hospitality budgeting mostly in the United Kingdom and United States. It is believed that Beyond Budgeting fits the progressive N-form organizational structure wherein full potential of the organization and the people are being liberated. Beyond Budgeting in International Hospitality Industry Introduction Nowadays, most organizations are facing considerable barriers in managing their performance capabilities particularly in the areas of budgeting. Hospitality industry is o ne of those industries that desperately need to experience a new management structure and performance budgeting system in the emerging information age. Traditional budgeting model is said to be universally disliked because the concept is expensive, it takes too long to respond, and a minimized value. Shareholders as well as customers are pressuring the industry to consider an alternative management model that is designed to eliminate conflicts in the organization as well as the reduction of costs and bureaucracy. Aside from being cost effective and strategic, the new management model must also coincide with the business goals of the twenty-first century. This vision is a great challenge to every organization because it requires â€Å"a new set of management process and new style of leadership...a new coherence among these management process and leadership principles to liberate full potential of the organization and its people† (Hope & Fraser, 2003, p.17). Beyond Budgeting is the model that has a capacity to manage performance and at the same time control the organization without budgets. However, the success of this concept is still doubtful to many organizations considering that how can there be management if there is â€Å"no budgets, no absolute targets, and no fixed plans† (Daum, 2002, p.1). The purpose of this paper is to discover the fresh approaches of information age such as Beyond Budgeting and new management structure. This paper has three sections that include: the overview of opportunities in Beyond Budgeting principles; the examination of current literature and critical evaluation of the topic; and the key recommendations applicable for international hospitality industry. Overview of Beyond Budgeting and Organizational Structure â€Å"The two fundamental elements of Beyond Budgeting model are new leadership principles based on the principle of empowerment of managers and employees, and new more adaptive management process† (D aum, 2002, p.2). According to the Beyond Budgeting Round Table (BBRT) of the Consortium for Advanced Manufacturing International (CAM-I), this empowerment which is also known as devolution is a process that will enable the organization to discover the full potentials of its people. The existence of Beyond Budgeting is due to the growing dissatisfaction delivered by the traditional general management approach of budgeting. Most of the tools and techniques that organizations used nowadays were no longer applicable to the issues of information