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Games Managers Play at Budget Time
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By Richard Steele and Craig Albright
Spring 2004
Reprint 45314
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Volume 45, Number 3, pages 81-84, 4 pages
Primary Topic: Financial Management
Secondary Topic: Leadership
SummaryOne of the most thoroughly studied questions in business is how, at budgeting time, large corporations should choose among investment opportunities. Why, then, are so many senior executives frustrated with the process and convinced that their companies' capital is not being invested as well as it could be? One reason is that even the best-designed systems can be trumped by the power of personality. It has become commonplace, in fact, for talented and charismatic managers to spin, manipulate and otherwise cajole senior management into funding their business ideas -- often in the face of numbers that would, on their own, dictate a negative decision. Having guided dozens of major corporations through the budgeting process and watched hundreds of presentations by line managers asking for capital, the authors have profiled five archetypes of bad behavior commonly used by managers to subvert decision-making standards and win resources. They also explain how senior managers can counteract such behavior and instill values that lead to better use of investment capital. |
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