Hi All, The comment by Wallander is an insightful and biting criticism of the co

Hi All,
The comment by Wallander is an insightful and
biting criticism of the conventional budgeting method. As a tool for control,
planning, and performance assessment, the traditional budgeting approach has
long been a mainstay of corporate finance management. But as markets change and
companies operate in more dynamic and complicated situations, criticism of this
conventional method’s shortcomings has grown (Fraser, 2018). Traditional
budgets’ inherent rigidity and inflexibility make it difficult for them to adjust
to the quickly shifting market conditions. The quotation suggests that this
approach finds it difficult to keep up with the volatility and fluidity of
today’s corporate environment because of its set figures and yearly cycles.
Moreover, the fact that the procedure is described as “cumbersome”
highlights how labor-intensive traditional budgeting is. These budgets take a
lot of time and money to create and monitor, which frequently leads to
decisions that are either “commonplace” or “wrong.” It
implies that the process’s constraints may cause erroneous assumptions or,
worse, the repetition of conventional wisdom rather than novel or correct
insights from the work put into it (Erdald, 2017)
The claim that
conventional budgeting produces results that are either “commonplace or
wrong” draws attention to the fundamental weaknesses in its capacity for
anticipating and making decisions. These budgets’ static character encourages
complacency because they frequently forecast predictable results or, on the
other hand, misjudge the quickly shifting market conditions, making the
findings shaky or out of date. In the end, Wallander’s criticism highlights the
necessity of changing the way that financial management is approached by Fraser
(2018). It advocates moving away from the inflexibility and inefficiency of
conventional budgeting and toward more flexible, responsive, and agile
approaches. In order to adapt quickly to changes in the market, encourage
innovation, and make well-informed decisions that appropriately represent the
dynamic character of the business environment, modern enterprises need certain
tools and procedures. It promotes reassessing procedures to make sure that
controls and financial planning meet the needs of modern enterprises. Companies
wanting to succeed in a constantly changing market are finding that flexible,
dynamic, and forward-thinking strategies are more essential (Ogden, 2020)
Question
How can businesses reconcile the need for traditional financial
controls with the demands of a rapidly changing business landscape?