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dc.contributor.authorEngesæth, Peder
dc.contributor.authorMarthinussen, Jonas
dc.date.accessioned2016-09-02T07:49:33Z
dc.date.available2016-09-02T07:49:33Z
dc.date.issued2016-09-02
dc.identifier.urihttp://hdl.handle.net/11250/2403715
dc.description.abstractThe following thesis is a qualitative study aimed at contributing to the Beyond Budgeting literature on unbundling the traditional budget by answering the question: “Why may global, industrial corporations attempting to go Beyond Budgeting struggle to effectively substitute the budget with separate forecasting and targeting functions?” We find this research problem interesting, as there are no case studies today documenting potential struggles of separating the forecasting and targeting functions. The aim is to fill this gap in this literature by providing insight into the process and struggles inherent in this separation process. As the basis to answer this question, we have performed a case study on Jotun, a global chemicals company originally from Norway. Jotun introduced a targeting tool called Strategic Target Planning (STP) in 2007, and have in parallel attempted to make what they call cost budget into a forecasting tool. Beyond Budgeting literature proposes several reasons for separating the traditional budget into individual processes, such as decreased resource use due to less negotiation, more flexibility because of more autonomy, and less gaming as there are fewer conflicting purposes. In this case study we found that Jotun has only partially managed to remedy these issues by substituting the budget with separate forecasting and targeting tools. One interesting finding that has not been addressed in previous literature is the paradox of autonomy. If an organization already has a culture based on the decentralization and trust that is necessary for Beyond Budgeting to function well, this culture can be counter-productive to the implementation of Beyond Budgeting in the first place. We also found evidence that separating the forecasting and targeting function from the traditional budget could still lead to skewed incentives and gaming, as these new tools can still be misinterpreted or involve conflicting purposes, such as resource allocation, benchmarking and bonus schemes. A third finding was that the substitution of the budget with separate forecasting and targeting tools may lead to more flexibility in terms of upwards spending, but not as much downwards. This implies that spending in excess of the forecast is possible as long as the business case is good, but that there is less flexibility in reducing costs when actual needs turn out to be less than forecasted as employees perceive the funds to be allocated already.nb_NO
dc.language.isoengnb_NO
dc.subjectbusiness analysisnb_NO
dc.subjectperformance managementnb_NO
dc.subjectinternational businessnb_NO
dc.titleBeyond budgeting in Jotun : a case study on substituting the budget with separate forecasting and targeting tools in a global, industrial corporationnb_NO
dc.typeMaster thesisnb_NO
dc.description.localcodenhhmasnb_NO


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