Value Based Management and Beyond Budgeting

Beyond Budgeting is not really about budgets. The most important message is to decentralize and delegate responsibility. This claim is shared with value based management.

While only few value based management authors discuss organizational issues as delegation and decentralization, the most important principle of value based management is value creation. From this perspective, value based management is a strong decentralized organizational component.

This also the reason why value based incentives are exclusively linked to value creation while omitting other factors like strategy implementation (Balanced Scorecard), management by objectives and qualitative factors.

This is the second core parallel to Beyond Budgeting: it bases incentive systems not on individual goals but rather on relative performance which is measured against the market or actual profits, exactly like value based incentives.