- Coordination through budgets - adapt the coordination of traditional budgeting for increasing complexity and dynamics
MMM can obtain a competitive advantage through
dynamic changes in its operations rather than remaining stable. Therefore the
company can experience modern budgeting system adapting the environmental
changes successfully. Not only that the company may be able to be in a position
that the competitors cannot reach without a huge effort to beat the company.
- Decentralization - increase flexibility of budgetary process by decentralized authority
Centralization of authority may have negative impact
on budgeting process and it may restrict the communication of effective ideas
and suggestions from the lower level regarding the budgeting system. If the
company attempts to decentralize its authority, work load of top management can
be reduced to a greater extent and it will be an administrative ease in making
only critical decisions.
- Focus and criticality reduce the level of detailed budgets and therewith increase speed of forecasting
More focus on detailed budgets may lead to a time
wasting and inefficiency in operation. The company must reduce the level of
detailed budgets considering the essence, importance & relevance of
information. And also it is recommended to MMM to increase the speed of
forecasting through skilled & experienced personnel
- Analytical planning from baseline - no longer based on previous year's effective figures
Past cannot be treated as the scene of future. But
we can only get mere idea about what
will be happened in future. Therefore dependence on past does not always
generate favorable consequences for the organization and it may take the
management into totally error forecasting.
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