The ABB group lists several potenti

The ABB group lists several potential beneWts of their approach (Hansen and Torok
2003):
1. The detailed operational model used avoids unnecessary Wnancial calculations being
made for operationally unfeasible plans.
2. The more sophisticated operational model provides a richer set of tools for balancing
capacity.
3. Lower-level managers and employees can more easily understand information expressed
in operational rather than Wnancial terms.
4. Activity-based approaches reinforce a horizontal, process-based view of the organization,
in contrast to traditional budgeting’s vertical orientation.
In many ways, the ABB approach can be seen as correcting one of the two deWciencies
introduced by taking a purely management control (Anthony 1965) view of budgeting.
Anthony separated management control from both strategic planning and operational
control and, as a result, management control came to be seen as primarily driven by Wnancial
information. More recently, improvements to budgeting can be seen as restoring the
connections between these other two important processes. From the strategic point of
view, approaches such as the BSC (Kaplan and Norton 1992) have been concerned to restore
the link between performance management and strategy. Most obviously in their book The
Strategy-Focused Organization, Kaplan and Norton (2001) maintain that the process of
strategic mapping is a necessary step in the construction of eVective measures of performance
within a BSC. Other authors, such as Simons (1995) in his ‘levers of control’ framework,
have combined a focus on strategy with a wider view of the control mechanisms that
can be used to implement strategy. In the contingency theory literature also, strategy has
been identiWed as a key contingent variable for control systems design. Considerably less
work in management control has focused on the second interface in Anthony’s categorization,
namely that with operational control. There may be several reasons for this, such as the
concentration of researchers on top-level controls, the prevalence of many diVerent control
practices at lower levels, and the unfamiliarity of accounting researchers with the types of
non-accounting controls (including production line layout and physical inventory controls)
that have gained increased importance at Wrst-line management levels. The ABB approach
can be seen as a major contribution in this arena.
13.3.2 RADICALLY CHANGING BUDGETARY PROCESSES
The European-based BB group has taken a more radical approach in arguing that traditional
budgetary control is fundamentally Xawed in such a way that incremental improvement will
not be eVective in eliminating the major problems from which it suVers (see Hope and
Fraser 2003 for a more detailed exposition of their work). The BB approach seeks to avoid
what they label the annual performance trap. This is their shorthand for the set of