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D = Dissatisfaction Seven Key Problems with Traditional Budgeting

1.

Budgets take too long to prepare (often making them out of date when published)

  • 2.

    Budgets cost too much

  • 3.

    Budgeting is based on assumptions that are nearly always wrong

  • 4.

    Budgeting causes gaming that erodes the ethical foundation of the

company

  • 5.

    Budgeting triggers unnecessary spending

  • 6.

    Budgeting gives the illusion of control by robbing potential

  • 7.

    In the words of Jack Welch, “It [Budgeting] brings out the most

unproductive behaviors in an organization…”(Jack Welch, “Winning,” p. 189)

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