Målsättning, prognostisering och resursfördelning i en budgetstyrd bank respektive budgetlös bank
En fallstudie av två svenska banker på kontorsnivå
Speaking of budget and budgeting is almost as adding fuel to the fire. The subject evokes a lot of emotions, both positive and negative. Some might consider budgets as a bureaucratic process that won?t lead to any good. Others might find budgets as extremely helpful and necessary in a company?s planning process. The traditional yearly budget has sustained a lot of harsh criticism in recent years and different approaches to the budget have developed. One way to handle the budget is to modernize and make it more suitable for today?s ever changing market. Another approach is to drop the budget all together. The concept of Beyond Budgeting is a form of the latter. Jan Wallander, former CEO of Svenska Handelsbanken, adopted the Beyond Budgeting concept in the bank over 40 years ago. Since then, the bank has shown a higher return on equity than other Swedish banks, 40 years in a row. Still, no other major bank in Sweden has adopted the beyond budgeting process. Research shows that there are many similarities between the two control systems. A lot of concepts are to be found in both control systems only to have undertaken different names. Research also shows that beyond budgeting is somewhat uninvestigated when it comes to the practical use of the control system. If a company abandons the budget, how do they plan their operations? The purpose of this study is to investigate how the planning process, consisting of target setting, prognoses, and resource allocation is being handled in two major banks, on a local level. The study wants to identify similarities and differences between a bank adopting beyond budgeting and a bank adopting the budget. This was done by collecting literature within the field and by four interviews with local bank managers. The findings of the study show that target setting and resource allocation is done almost identical between the banks. The differences however are probable to occur in either control system. The study also shows that the budget controlled bank is far more flexible than theory and opponents suggest. While there are similarities, the study shows that target setting in a Beyond Budgeting bank are compared to its competitors as well as focused on long-term orientation.