Operation Model
What is included in the operating model?
The organizational model typically includes
- organizational model: how the activities in the value chain and the supporting functions are linked.
- information and overarching control: how information flows, processes and activities that transcend the structure of the organization are controlled
- employee model: what kind of employees the organization wants to attract, pay and incentives, responsibility and values.
- Implementation of decision rights: How are decisions (the principles of which are defined in the management model) put into practice?
- Management rhythm: in which meetings and how often are goals, plans and results reviewed?
- Location policy: where are the work and assets located?
- Business partners: Which organizations are more part of the ecosystem, which are transaction suppliers and what do the relationships look like?
Target Operation Model
The Target Operation Model is the target image of the organization at a high level of abstraction.
It allows an overall view of the upcoming changes to be developed.
Budgeting
Beyond Budgeting
Beyond Budgeting is an approach that, in the narrower sense, examines the overcoming of conventional budgeting and, in the broader sense, offers a basis for thinking about how to design modern organizations.
Beyond Budgeting emerged as a management model in the late 1990s and developed from practice in several European and US organizations. It is an alternative to traditional command and control-type management models, which are usually based on budgetary and similar control mechanisms.
The purpose of Beyond Budgeting is not necessarily to abolish budgeting, but to create more agile and humane organizations that can cope not only with more dynamic and unpredictable business environments, but also with the new and different expectations of knowledge workers in terms of leadership and management; BB draws heavily on “Theory X and Theory Y” [McGregor 1960].
On the operational level BB separates three aspects of the budgeting process
- Objectives – what do we want to happen
- Expectations (forecast) – what do we expect to happen
- Resource allocation – what resources do we need to provide to make it happen
This separation makes each individual aspect much more transparent. In particular, there are no longer any conflicts of interest between achieving objectives and meeting expectations, which often turns traditional budget discussions into a nightmare.
Bjarte Borgsnes is considered the founder of the concept, having introduced the model at the Norwegian company Statoil many years ago. The Beyond Budgeting Round Table is a global network based in London.
Categories
Siblings
Categories