Application Of The Beyond Budget Management In A Enterprise

Enterprise budgeting is to promote its building-up and improve inside control mechanism, to ascertain inside economic commitments, it is plays an important role in improving the level of financial management. Budgeting as a management tool having a lot of benefits to enterprise development, this is the main reason why many China foreign enterprises concentrated efforts on the management system of budgeting during the past ten years in production and operating activities. However, the effect of budgeting in enterprises were not ideal as we thought, the model of traditional budgeting has being an obstacle to the development of enterprises.With information economy development, enterprise facing many uncertain factors of outside, and the enterprise’s mission is to create value and realize a strategic target under new economy environment. The pattern of traditional budgeting is put particular emphasis on financial aims, run after the short-term prompting and fixed performance evaluation. This does not meet the need of creating value and realizing strategic target. Beyond budgeting being one kind of new administration implement, emphasize target establishment, strategy, development and improvement, resource administration, adjustment, control of production cost, forecasts, measures and controls, reward and liability and so on. Based on this theory, budgeting management manage to rebuild by using of BSC and value-based management, which is intention to remove negative effect of traditional budgeting’s performance evaluation. At the same time, attaching importance to environment of competition and the market demand. Enterprise is managed to make strategy effectively as guiding system. Enterprise also focus on structure management, completely evaluation, and empowered manager.At present, as an important part in enterprise management, beyond budget management has already been accepted by most of the enterprises in our country. But beyond budget management appears so late in our country as a new management concept, whether in the theory department or the industry department, there still exists some difference in the understanding about the meaning, the effectiveness and the foundation of budget management that its function in the field of enterprise management has been limited greatly. BBRT designed several principles of beyond budget and guiding how to use in practice.The thesis is intention to analyses the inadaptability of traditional budgeting in new economic environment, and take advantage of beyond budgeting as a new management tool in company and groups improving its process. Firstly reviewed the theoretical research situations of comprehensive budget management, and beyond budgeting management and then elaborated the theories of the two concepts. On the basis of the theories, pointed out, the deficiencies of budgets lack, time consuming, and the misunderstanding of traditional comprehensive budget management. Moreover, analyzed the advantages and shortages of the beyond budgeting management. By contrast, although there are lots of problems and deficiencies in the traditional comprehensive budget management, it still remains the function to promote the effective allocation of resources for enterprises, and plays an important role to the achievement of business strategic objectives and increase the production efficiency. And also because the hard to implement and the self shortages of beyond budgeting, simply abandon the comprehensive budget management is inadvisable. So, this paper considered the approaches of succeeded European companies, introduced the idea of beyond budgeting management, though reforming the budgeting management organize structure, taking the usage of method of rolling budget, ABM, and establishing a comparing relative performance evaluation system to improve the traditional comprehensive budget management. Combined with a particular case of A company, the thesis structured the frame of beyond budgeting:cost control based on Activity-based management, performance valuation based on benchmarking implements of strategic target based on balanced scorecard. Finally the thesis exhibits the achievement of transit of traditional budgeting to beyond budgeting, and testified beyond budgeting management is a useful tool in future economic environment.This dissertation contributes in the following fields:firstly, reviewing the development of traditional budget management and beyond, budgeting in the scope of new institutional economics, analyzing the factor driving the vicissitude of management control system and illuminating some issues related to beyond budgeting; secondly, summarizing factors which influence enterprises’selecting of management control system, and proposing on how to change from budgeting management to beyond budgeting.