Managerial Accounting

The Covid-19 pandemic has created new reality that requires companies to realise that the future looks unpredictably uncertain. To survive, companies need to act quickly, to learn what works, and to adjust as conditions evolve. This has also revived the debate started by Jeremy Hope and Robin Fraser decades ago. In their article “Who needs Budgets?” published in the Harvard Business Review (Feb 2003), Hope and Fraser declared that “Budgeting, as most corporations practice it, should be abolished. That may sound radical but doing so would further companies’ long-running efforts to transform themselves into devolved networks that can nimbly adjust to market conditions”. Required:

Discuss whether you agree with the statement that “Budgeting, as most corporations practice it, should be abolished” as this would better prepare businesses for the post-pandemic world.

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