BEYOND BUDGETING - The effect of reallocating resources towards agility in an uncertain world

Abstract: Traditional management continues to be criticized for its ineffective processes as new management control systems slowly enter the market. One of these being Beyond Budgeting, shifting the traditional processes of target setting, resource allocation and forecasting. The resource allocation according to the concept should move beyond the static budgeting towards a dynamic approach that emphasizes agility to better adapt to the VUCA environment. For that reason this study researches how changing the resource allocation process in accordance with Beyond Budgeting affect companies agility short and long term in the uncertain market, especially during the Covid-19 pandemic. The research is done with a qualitative approach, conducting a case study of Ericsson, with semi structured interviews at different levels throughout the organization, generalizing the study towards the telecom technology sector. The contingency theory has been used to analyze the empirics, looking at the internal and external structures. Concluding from our findings that having a more dynamic resource allocation increases agility, providing exponential growth in numbers long term and satisfying employees. As well as contributing to handling the pandemic with little negative impact as the processes become more flexible. Thus also concluding that some of the problems stated with traditional budgets still remain with a change towards a more modern management control system.