Performance management and control of the organisation参考.ppt

Chapter 2 Performance management and control of the organisation Ho Xin Content Traditional budget models Budgeting in not-for-profit organisations Beyond budgeting 1. Strengths and weaknesses of alternative budget models Incremental budgeting ZBB Rolling budgets Flexible budgets ABB 1.3 The future of budgeting 80% of companies are dissatisfied with their planning and budgeting processes. Time consuming and costly Major barrier to responsiveness, flexibility and change Adds little value given the amount of management time required Rarely strategically focused Makes people feel undervalued Reinforces department barriers rather than encouraging knowledge sharing Based on unsupported assumptions and guesswork as opposed to sound, well-constructed performance data Development and updated infrequently Some companies have abandoned budgeting completely. 1.3 The future of budgeting Ways to adapting planning and budgeting processes Rolling forecasts Separation of the forecasting process from the budget to increase speed and accuracy and reduce management time Focus on the future rather than past performance Use of the balanced scorecard 2. Budgeting in not-for-profit organisations Public sector organisations 2.1 The link between funding and achieving objectives Funding tends to come direct from the government, not from those using the public service. Obtaining funds, or additional funds, can be a complex political process. There is not necessarily a link between providing more service and obtaining more funds. In fact, in much of the public sector, there is no link between success at achieving objectives and funding received. In some instances poor performance against non-financial objectives leads to higher levels of funding. 2.1 The link between funding and achieving objectives The level of service provided, which effectively determines the funding, is a political decision. Public sector organisations have to provide the best service possible with the allocated funding.