The traditional view of governance a modern factoid

I probably stick it out when I say that the traditional view of governance is nothing more than a modern one factoid. In management literature and research articles, for example, you can read: “Most companies cannot justify such a strong breach of standard as the abandonment of budgeting would mean. We can thus conclude that budgetary control has come to a halt. " The journal Management Accounting Research states: "Overall, we find for the majority of firms that budgets continue to be used for control purposes and are perceived to be value-added." Many similar statements can be read, but the list becomes too long in this context.

However, I note that many times the conclusion from the academy is that traditional budgeting is necessary and an important instrument - as most companies still use budgeting as one of their most important instruments. The main proponents of this view of traditional budgetary management are found not only in academia but also among companies that have not yet modernized their views on governance. At the same time, I am increasingly encountering companies that abandon the traditional budget as a policy instrument in favor of something else, more adapted to the dynamics of the outside world and the business rhythm of each company.

The whole thing is very reminiscent of a known factoid in the Middle Ages, namely the notion of the earth as flat and the center of the universe. The main proponent of this geocentric worldview was the Catholic Church. There was a kind of church doctrine that it was best to follow. According to the Bible, God placed the earth and man at the center. It is understandable that the priests were annoyed when some astronomers came up with their heretical teachings that the Earth was in fact not the center of the universe at all, but that it rotated around the sun just like the other planets.

In the same way, it may be understandable that academics scholars become annoyed when certain practitioners and management consultants make claims that traditional governance, with the budget at its center, is not needed but is an unnecessary evil. There are other auxiliary theories that allow us to steer beyond the annual budget's performance trap, as proven by, among others, Handelsbanken, Schneider Electric, Coloplast, Statoil and others.

In a hundred years, Columbus, Copernicus, Brahe and Galilei, with others, changed people's perception of the entire universe. For Catholicism, it took four times as long. Right now, in addition to the above, more and more companies are looking for new solutions to manage their operations beyond traditional budgetary management in much the same way that scientists of the time sought answers to the state and movements of the earth and the universe.

If the traditional view of governance is a modern fact - will it take four times as long for the academy to change its view on the issue even this time, or does it also go faster in today's changing world?

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