The strengths and weaknesses of the traditional budgeting

As Gowthorpe (2003: P457) argued, that "A budget is a plan, expressed in financial and/or more general quantitative terms, which extends forward for a period into the future." Budgeting actually refers to the process that, after the strategic plan of the business has been made, companies made a short term plan (usually one year) to meet the strategic purpose. Traditional budgeting has offered a lot of contributions in so many years' practice. But it seems …

…to a 'Beyond Budgeting' approach to meet the competitive enviroment. The 4P-based budgeting replaces fixed budget measures with relative targets, prevent gaming of executive compensation and respond faster to change. Anthony, Hawkins and Merchant(2003) have suggested that the best practice and methodology can dramatically alter the processes and systems that underline business performance management. As a result, the 4P-based budgeting gives us far more information and far more control than the traditional budgeting ever did.