...Beyond Budgeting Beyond budgeting is a leadership philosophy that relates to an alternative approach to budgeting. Beyond budgeting supporters suggest that traditional annual budgeting should be eliminated rather than simply be improved as it is fundamentally flawed (Hope and Fraser, 2003). This approach has drawn worldwide attentions. In this essay, I will explain principles of the beyond budgeting and evaluate its usefulness in practice. In order to conduct beyond budgeting, five principles are proposed. Firstly, the beyond budgeting suggests applying rolling budgets to replace annual budgeting. Rolling budgeting breaks down annual budget by months for the first three months, and by quarters for the remaining nine months. The beyond budgeting employs wider range of non-financial measures as well as some financial measures for control. Non-financial measures include consumer satisfaction, environmental contamination and so on. For example, OilCo, an oil company, set targets linked to stakeholders’ expectations and focused on avoiding accidents. This helped the company to be more customer-orientated rather than being preoccupied with meeting sales targets only, delivering a long-term growth of profits and shareholder value. Moreover, key performance indicators could be utilised in this case. Because management performance will be evaluated based on those indicators, beyond budgeting could be better linkage with strategies than traditional budgeting (Hope & Fraser). Kaplan...
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...file as a PDF, other formats WILL NOT BE ACCEPTED. Cardiff Business School COURSEWORK COVER SHEET 2014/2015 Section 1 (to be completed by the student) Student Name: Oliver Conroy Student Number: C1218229 Module Code: BS3517 Module Title: Management Accounting & Control Coursework Title: Budgeting Essay Submission date: (before 4pm on…) 17.03.2015 Date document last saved/printed: Section 2 ( To be completed by the Lecturer) COMMENTS: --- 09.03.2015 (Updated automatically) Lecturer: Nina Sharma MARK AWARDED: Number of words: 1976 Created by: sbsjj15 Document last opened: 09/03/2015 14:22:03 Version 2.3 Oliver Conroy C1218229 Management Accounting & Control BS3517 i.) INTRODUCTION The apparent flaws and inaccuracies in the traditional budgeting process have caused many scholars to openly question the need and validity of this stalwart of modern day management accounting. Hope and Fraser (2003) spearheaded the ‘Beyond Budgeting’ approach, challenging the conventional format of budgets and arguing that they should be abolished, removing the rigid shackles imposed on businesses of traditional budgets...
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...Batman – The Dark Knight Rises 1. What do we see in the opening scene (the prologue)? What tone/atmosphere does the opening scene set? W eget introduced to the villian/terrorist. Action-packed. 2. What kind of place is Gotham City? (what does it look like?) Much like New York. 3. Make a character sketch of Batman/Bruce Wayne and focus on his development. To what extent can Batman be said to be a vigilante? Quite withdrawn. Not very social like he was in the movies before. He sees that Gotham is under attack and even though he has retired, he feels a commitment to protect his city. Batman is definitely a vigilante. Takes matters into his own hands. 4. Compare Batman to Bilbo. They are both on a mission. Which similarities/dissimilarities do you see? Batman is more like a ”serious” and obvious hero. Fighting hard with incredible powers. Bilbo is a more nice and ”lucky” type. Most of the things he experiences is accidentialy. 5. We know that adventurous blood runs in Bilbo’s veins (the Took side). What ’drives’ Batman on his mission? He is sort of the citys protector. He has a responsibility. 6. Characterise Bane (briefly) Pretty determined and intelligent. Ruthless. 7. What similarities/dissimilarities (in The Hobbit and The Dark Knight Rises) do you notice when it comes to villains? The fact that The hobbit is whole other genre compared the dark knight rises. The white orc is more primitive, but still powerfull where...
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...September 12, 2012 G. Grunow English 131 A State of Trance “Hanady! Hanady! Hey where’s Hanady, she isn’t responding.” “She must be upstairs listening to music.” Music to me is almost like a third language. It not only provides insight but it allows me to feel as if I’m in another world. Music comes in many forms from rap, r&b, rock, pop, and many more but nothing speaks to me more than the power of trance. Trance is a genre of music that alters a mix of electric dance and repeated lyrics and beats. Throughout my school years I managed to have many friends but ones who weren’t really setting me up for a good future. I would do things, such as homework and studies, at my own pace and school wasn’t my first priority. It was fall of 2009, when my cousin Jay, introduced me to the world of trance. I remember that very first song he had me listen to called “On a good day” by Oceanlab. After hearing it several times I almost felt as if I were able to escape from the world I was living and came to realize that it was almost my little piece of heaven. Trance makes me so relaxed and motivated when I listen to it. It was almost like a friend to me because the lyrics that came along with it were more insightful than the words that came out of my friend’s mouths I hung out with. At that point in my life I moved away from friends and moved in a better direction. Sports have been a huge part of my life. I played soccer and volleyball all throughout high school and I remember...
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...Lisa Eichholz Dr. Hilary Harris English 096-10 November 10, 2011 Beyond Borders Recently there has been a dramatic increase of refugees, estimating 11 million today which is up from the 3 million that was recorded in the mid-1970s (UNHCR.com). Founded in 1919, the International Federation of Red Cross and Red Crescent Societies (IFRC) is now the largest humanitarian organization. In 1965 the IFRC proclaimed the Seven Fundamental Principles of Humanitarianism. The principle of humanity, the principle of impartiality, the principle of neutrality, the principle of independence , the principle of voluntary, the principle of Unity, and lastly the principle of Universality. The film Beyond Borders follows Sarah Bauford (Angelina Jolie), Nick Callahan (Clive Owen), and a small group of aid relief volunteers working throughout a few of the world’s most volatile areas. This films greatest lesson is showing the existing needs of many people and how there are few who are there to help and trying to make a difference. This film exemplifies the most important of the principles of humanitarianism in a very complex way. In the film many of the characters exemplify the principle of humanity in both positive and negative ways. The principle states that the movements goal is to “prevent and alleviate human suffering” by promoting “understanding, friendship, cooperation, and lasting peace.” At the beginning of the film Nick Callahan storms into the aid relief international’s black...
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...The major plots of Don't call me Ishmael all have teamwork, a major plot was when Ishmael went to his first debate team speak. Thanks to James Scobie the first debate went perfect. Ishmael was on the sideline watching and he says, “Somehow thanks to scobie, we managed to pull some kind of a case together and scramble to our first debate. Ignatius was first speaker, Orazio was second and Scobie was third. When Scobie spoke, it was like someone turning on a light in a darkened room.” (p.141, bauer, 2003). Ishmael says himself that James carried their team. He also says that James’s speech had such a massive effect on the audience, his speech turned on a light in a dark room, which shows us how strong James’s voice is in persuading. Another major plot was when Barry Bagsley used Danny Wallace to make sure that Ishmael does not get involved with Barry’s plans to bring fear back into James. Ishmael tells us what he sees, “In deep conversation were James and Barry. When they came inside in the room I knew I couldn't warn James otherwise Danny Wallace would have shut me up.” (p.82-83, bauer, 2003). Barry may not be the sharpest tool in the shed but he definitely knows how to use his friends to his advantage. This quote shows us that Barry was extremely organised with his plan. Barry gained James’s trust and then used that to attack him. Effective teamwork is shown in don't call me Ishmael when a unorganised debate team meets to discuss their topic. As a leader James Scobie is able...
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...Capital Budgeting Introduction A logical prerequisite to the analysis of investment opportunities is the creation of investment opportunities. Unlike the field of investments, where the analyst more or less takes the investment opportunity set as a given, the field of capital budgeting relies on the work of people in the areas of industrial engineering, research and development, and management information systems (among others) for the creation of investment opportunities. As such, it is important to suggest that students keep in mind the importance of creativity in this area, as well as the importance of analytical techniques. Because a project is financially sound, it must be ethically sound, right? Well . . . the question of ethical appropriateness is less frequently discussed in the context of capital budgeting than that of financial appropriateness. Consider the following simple example: The American Association of Colleges and Universities estimates that 10 percent of all college students cheat at some time during their postsecondary education careers. You might pose the ethical question of whether it would be proper for a publishing company to offer a new book How to Cheat: A User's Guide. The company has a cost of capital of 8% and estimates it could sell 10,000 volumes by the end of year one and 5,000 volumes in each of the following two years. The immediate printing costs for the 20,000 volumes would be $20,000. The book would sell for $7.50 per copy and...
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...Capital Budgeting Processes and Techniques Keith A. Rossmiller Business 657 Instructor Maxwell September 3, 2012 Capital Budgeting 2 Capital Budget Processes and Techniques Investment decisions impact the long-term success or failure of a company. The capital budgeting theory assumes that the primary goal of a firm’s shareholders is to maximize firm value. The process of analyzing and prioritizing investment opportunities is capital budgeting. Capital budgeting involves three basic steps of identifying potential investments, analyzing the set of investment opportunities that will create shareholder value, and implementing and monitoring the investment projects that a firm should undertake. Managers need analytical tools to help them make the best investment decisions for their firm. This paper will explore six different methods of evaluating investment projects and their advantages and disadvantages. The six methods are the payback period, discounted payback period, net present value, profitability index, internal rate of return, and modified internal rate of return, which method is most used in business, and issues related to capital budgeting. Capital Budgeting 3 Payback Period The first...
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...Handouts for Corporate Finance 1 Capital Budgeting Introduction A logical prerequisite to the analysis of investment opportunities is the creation of investment opportunities. Unlike the field of investments, where the analyst more or less takes the investment opportunity set as a given, the field of capital budgeting relies on the work of people in the areas of industrial engineering, research and development, and management information systems (among others) for the creation of investment opportunities. As such, it is important to suggest that students keep in mind the importance of creativity in this area, as well as the importance of analytical techniques. Because a project is financially sound, it must be ethically sound, right? Well . . . the question of ethical appropriateness is less frequently discussed in the context of capital budgeting than that of financial appropriateness. Consider the following simple example: The American Association of Colleges and Universities estimates that 10 percent of all college students cheat at some time during their postsecondary education careers. You might pose the ethical question of whether it would be proper for a publishing company to offer a new book How to Cheat: A User's Guide. The company has a cost of capital of 8% and estimates it could sell 10,000 volumes by the end of year one and 5,000 volumes in each of the following two years. The immediate printing costs for the 20,000 volumes would be $20,000. The...
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...concepts in strategic planning is firms’ capital investment decisions and it is also a critical component of “financial theory”. The theory is focused on cash flow and return on the investment. The tool used in investment decisions is net present valued (NPV) which was calculated from present valued minus required investment or which was reduced to discounted cash flow formula because the net present value is a matter of cash flow that will gain in the future. [pic] The company is comprised of tangible assets and intangible assets including growth opportunities. The Intangible assets and this growth is a clear reflection of the stock prices and was used to evaluate the capital budgeting analysis will has high NPV. The opportunity cost of each project will vary depending on the risk of the project. The company can divide the project groups with...
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...CAPITAL BUDGETING: ADVANTAGES AND LIMITATIONS. SEPTEMBER 2012 CHAPTER ONE INTRODUCTION 1.0 Background Study Capital budgeting is the process by which firms determine how to invest their capital. Included in this process are the decisions to invest in new projects, reassess the amount of capital already invested in existing projects, allocate and ration capital across divisions, and acquire other firms. In essence, the capital budgeting process defines the set and size of a firm’s real assets, which in turn generate the cash flows that ultimately determine its profitability, value and viability. In principle, a firm’s decision to invest in a new project should be made according to whether the project increases the wealth of the firm’s shareholders. For example, the Net Present Value (NPV) rule specifies an objective process by which firms can assess the value that new capital investments are expected to create. As Graham and Harvey (2001) document this rule has steadily gained in popularity since Dean (1951) formally introduced it, but its widespread use has not eliminated the human element in capital budgeting. Because the estimation of a project’s future cash flows and the rate at which they should be discounted is still a relatively subjective process, the behavioural traits of managers still affect this process. Capital budgeting is a process...
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...In today’s world, humans are in a very relaxed cycle: they eat, they watch television, they sleep. What most people do not realize are the health risks they are taking every day when they do their daily tasks. Humans are becoming more and more reliant on machines to do simple activities, such as changing the channel or traveling. I agree that technology does make activities uncomplicated, and genuinely makes life easier, but how can a person stay physically fit and healthy when he/she does nothing himself/herself? In Ishmael by Daniel Quinn, many environmental issues are discussed. Among the issues, Quinn talks about technology and how humans believe it to be a turning point in society, but will eventually lead to the downfall of humans. People are at great risk to their health with the advancements in technology. Not only have individuals fabricated new ways of entertainment, but have built factories, which pollute the air they breathe and water they drink. In Ishmael, Quinn tells of man trying to fly; when man fails, he does not just simply give up and wait to fly, but creates a new way, that is not fool-proof. Humans will do anything to make life easier, but for no reason than to make life easier. But is this really making life relaxing? People still have to go to work, still have to breathe in polluted air, and other such effects, all of which may be hazardous to their health. Humans keep creating objects that are harmful to the environment, and they call this “technology...
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...Bryan Kimmell How do CFOs make capital budgeting and capital structure decisions? Introduction A comprehensive survey is gone that describes the current practice of corporate finance. The survey will give us a betting understanding of where the theory and practice of corporate finance are consistent and areas where they are not. The survey conducted is based on two parts, capital budgeting and capital structure. The survey goes deeper and tries to find out what causes capital budgeting and structure decisions in firms. The survey consists of 100 questions to explore capital budgeting and structure decisions in depth. The original sample for the survey was 4,440 firms but only 392 CFOs responded to the survey, making the response rate a dramatic 9%. The results of the survey were analyzed based on firm characteristics. The responses given by the executives are compared in relation to the firm size, P/E ratio, leverage, credit rating, dividend policy, industry, management ownership, CEO age, CEO tenure, and CEO educational attainment. Comparing the responses to all these variables gives the results a more meaningful explanation because it is able to test various finance theories. The responses to the capital budgeting portion of the survey follow academic advice and use present value techniques to evaluate new projects. But when it comes to capital structure, firms rely on practical, informal rules and pay less attention to academic advice. Survey Methodology Before the...
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...CHAPTER ONE Introduction Understanding and being able to use capital budgeting techniques and investment appraisal tools is usually a standard requirement for most business degrees. In addition learning such methods will also give one an advantage in a real business situation, in which there is the consideration of significant capital expenditure project. Capital budgeting assists management decisions making on the process of ensuring growth of the organization. The techniques are divided into two types: one, Traditional (non-discounting) that includes pay back method, accounting rate of return (ARR). Two, discounting cash flow that includes net present value (NPV), internal rate of return (IRR) Profitability Index (PI). Before an investment appraisal is conducted, there are a number of points to keep in mind. Whilst the tool presented will give an evaluation of the worth of a project, one should consider that the answer is only a guide. In short, the results of an investment appraisal should be considered in conjunction with both common sense and other qualitative factors such as a business’s overall strategy. Secondly, before an investment appraisal is conducted, one should consider whether or not the project is mutually exclusive. Where a project is mutually exclusive, then only the best project should be selected. Where on the other hand, projects are independent; one may select all projects which give the appropriate return. 1.1 Background of the study Corporate finance...
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...exclusive projects. It has inspired many research scholars and is primarily concerned with sizable investments in long-term assets, with long term life. The growing internationalization of business brings stiff competition which requires a proper evaluation and weight age on investment appraisal issues viz. differing project life cycle, impact of inflation, analysis and allowance for risk. Therefore financial managers must consider these issues carefully when making capital budgeting decisions. Inflation is one of the important parameters that govern the financial issues on capital budgeting decisions. Managers evaluate the estimated future returns of competing investment alternatives. Some of the alternatives considered may involve more risk than others. For example, one alternative may fairly assure future cash flows, whereas another may have a chance of yielding higher cash flows but may also result in lower returns. It is because, apart from other things, inflation plays a vital role on capital budgeting decisions and is a common fact of life all over the world. Inflation is a common problem faced by every finance manager which complicates the practical investment decision making than others. Most of the managers are concerned about the effects of inflation on the...
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