How Corporate Cultures Drive Advertising and Promotion Budgets: Best Practices Combine Heuristics and Algorithmic Tools
Douglas West
King's College London
John B. Ford
Old Dominion University
Paul W. Farris
University of Virginia Darden School of business
Management slant
- Budgeting processes used by companies are more complicated than the oft-referenced 'rules of thumb' suggest.
- Nevertheless, the process is not as rational as economists and management scientists would prefer and rarely can be demonstrated to produce profit-optimizing budgets (however profit might be defined).
- Instead, whatever the sophistication of the organization, the budget-setting process often combines heuristics (such as maximum advertising/sales ratios)...