5. Why did FoodCorp change its budgeting process?
FoodCorp started changing its budgeting process in 2003 in connection with the implementation of a new enterprise resource planning (ERP) system. At the time, the company decided to closely examine several business processes, including its planning and budgeting procedures. During that analysis, the Beyond Budgeting principles emerged as a relevant idea. FoodCorp, therefore, met with management consultants specialized in Beyond Budgeting and visited companies known for their use of Beyond Budgeting, including Borealis,whichwas emphasized as a Beyond Budgeting company by Hope and Fraser (2003a), aswell as by Bogsnes (2009).Adeputy director of corporate
finance explained:
We want a form of management that is forward looking instead of backward looking.
Several of the managers in corporate finance mentioned the increasing environmental uncertainty as a reason for the focus on Beyond Budgeting. The increase in environmental uncertainty was also apparent in FoodCorp’s annual reports and confirmed by managers outside corporate finance. As a CFO of a business group said: