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Study analyzes the paths and challenges of corporate budget management

The research by the FGV EAESP professors included a literature review of 114 papers, highlighting seven widely used models.

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Estudo analisa caminhos e desafios da gestão orçamentária empresarial

The budget is one of the central tools for planning and controlling companies, and this is a topic of debate among academics and managers. The article by professors at the São Paulo School of Business Administration (FGV EAESP), Maria Angélica Lencione Pedreti and Natalia Diniz-Maganini, published in Revista GV Executivo, analyzes the contemporary challenges of budgeting practice and presents a historical overview of the main models.

Since their inception, budgeting processes have been refined to meet different organizational needs. The authors' research included a literature review of 114 papers, highlighting seven widely used models: corporate budgeting, continuous budgeting, zero-based budgeting, flexible budgeting, activity-based budgeting, matrix budgeting and beyond budgeting. Each methodology offers advantages and disadvantages, depending on the organizational context and strategic objectives.

The corporate budget, for example, is the most traditional model, widely used since the beginning of the 20th century. It provides predictability and facilitates control, but can be inappropriate in contexts that require flexibility. Beyond budgeting, on the other hand, proposes a continuous and decentralized model, promoting adaptation and agility, but with greater implementation complexity.

Among the challenges identified, the authors mention the time and resources needed to draw up detailed budgets and the rigidity of some models, which can limit innovation and creativity. On the other hand, the budget is valued for creating planning discipline and stimulating the definition of priorities. "It's not just a question of keeping, improving or abandoning the budget, but of understanding when and how to use each model," say the authors.

The study concludes that choosing the ideal model depends on factors such as the sector in which the company operates, its organizational culture and its objectives. Trends such as the use of big data and adaptation to the circular economy were pointed out as future ways to maximize the benefits of corporate budgeting.

Click here to read the full study