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Abolishing budgets in favour of flexible targets
Handelszeitung
Budgeting wastes valuable executive’s time and can undermine entrepreneurial behaviour, warn critics in the Swiss Handelszeitung. Franz Röösli, professor at the Fachhochschule Nordwestschweiz and director of the Beyond Budgeting Roundtable (BBRT) is even in favour of abolishing budgets entirely. In his opinion employees should focus on customers and market developments and companies should be managed on the basis of dynamic market-related targets. Hundreds of major companies, including ABB, Novartis, Accenture and Egon Zehnder International, have embraced this theory and abandoned budgeting. “We do not set any profit targets for our partners,” confirms Mark Hoenig, a consultant at Egon Zehnder International, Zurich. The company prefers to boost performance with gentle pressure from the top and by creating a motivating environment, reports the newspaper. |
