What are the challenges of budgeting?

Despite the many functions they serve within organizations, or perhaps because of the many functions they serve, budgets have been severely criticized in practice. Yet, despite a general awareness of their flaws, budgets remain ubiquitous. Virtually no organization is run without budget, and even among the few claiming that they abandoned budgets, a closer look reveals that the tools on which they rely instead are strangely similar to budgets; they just have different names. In this section, I will summarize these criticisms and discuss how various organizations addressed them.