For a long period of time, budgets have been the most important management and control tool. They are used to provide goals to a company and help point it in the right direction. Due to the great success achieved over the years, budgets are used in almost all companies. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an original essay However, as life develops, the tools of management and control also progress. New management and control tools have been developed. One management model we will focus on is the Beyond Budgeting model. The model believes that traditional budgets are a barrier to progression and are too complex and time-consuming. However it could be argued if this were the case, then why are so many companies still using traditional budgeting, a question the model cannot answer. Traditional Budgeting The budget is an estimate of costs, revenues and resources that will be used as a forecast to specify how resources will be acquired and used during a specific period of time. According to a Hacket Benchmark study, companies spend an average of 25,000 man-days planning and measuring performance for $1 billion in revenue. According to another study (by KPMG) the budget definition process takes up 20-30% of managers' time. Budgets can be used in a variety of ways. The most important ways to use budgets are (Drury, 1992) planning annual activities, communicating plans to managers, motivating managers to achieve objectives by controlling activities and evaluating staff performance. Budgets traditionally emerge from the Organization's mission statement and vision. From these goals are private and these are the goals that organizations are working towards in the coming years. Starting from the objectives, a financial plan is created which becomes the budget. Next, the budget is used to check whether they are still on track and whether any necessary corrective measures need to be taken. At the end of the year the evaluation and award ceremony takes place. A comparison is made between the objectives set in the budget and the objectives achieved by the staff. Despite the widespread use of budgets, their problems have been recognized. Libby and Lindsay (2010) found that the most commonly proposed budget-related problems are classified into three categories; gaming, time-related issues, and strategic issues. Gaming - Using the budget as a strategic tool pushes employees to engage in dysfunctional gaming, where budgeted numbers can be manipulated to be more favorable for some of the parties involved. Libby and Lindsay ( 2010) found that postponing necessary expenditures to future periods and negotiating easier targets through “sandbagging” are the most common methods of budget gaming, and are said to occur in almost all organizations. It should therefore be very common for budgets to become misleading when used in operational planning as the numbers cannot be trusted to reflect the best knowledge. Time-Related Issues – Budgets have also been commonly criticized for being too time-consuming (Libby and Lindsay, 2010). The budgeting process usually begins several months before the year to which it relates (Libby and Lindsay). And when employees and managers have to spend so much time budgeting, the time they have to run the actual business naturally diminishes. Strategic issues: Another common argument against the use of budgets (2005).