• Administração de Empresas

Study analyzes paths and challenges of corporate budget management

08.01.2025

Budgeting is one of the central tools for planning and controlling companies, and is a topic of debate among academics and managers. The article by professors from the São Paulo School of Business Administration (FGV EAESP), Maria Angélica Lencione Pedreti  and Natalia Diniz-Maganini , published in GV Executivo Magazine, 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.

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

Among the challenges identified, the authors mention the time and resources required to prepare detailed budgets and the rigidity of some models, which can limit innovation and creativity. On the other hand, budgeting is valued for creating planning discipline and encouraging the definition of priorities . "It is not just about maintaining, improving or abandoning the budget, but about understanding when and how to use each model," the authors state.

The study concludes that choosing the ideal model depends on factors such as the sector of activity, the organizational culture and the company's objectives. Trends such as the use of big data and adaptation to the circular economy were highlighted as future paths to enhance the benefits of corporate budgeting.

Click here to read the full study. 

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