HARMONY Company

Solution

C. Mendoza 1
What are the roles of Budget?

Planning
Adjusting and allocating Motiving, driving
resources efforts

Ensuring strategic alignment

Coordinating Translating global objectives
action plans into local objectives.

C. Mendoza - 2
 The roles of Budget: potential contradictions

• Setting the targets

 Motivation/incitation: games, negotiations, potentially leading to
unrealistic targets

 Planification and coordination: need to set achievable targets as accurately

as possible

• Revising the budget?

 Incitation : stick to the target during the contractual period

 Planification and coordination : more frequent revisions, reforecasting, re-

coordination
C. Mendoza - 2016 3
 How to reconcile the points of view?

 Awareness by everyone of all the roles that the budget has

to fulfil

 Promote a management dialogue so that the incentive

function can lead to both ambitious and realistic targets

C. Mendoza - 2019 4