A budget can deliver a criterion where employees are encouraged to achieve their targets under certain conditions. Conversely, budget can also inspire disorganization and conflict between employees or managers. If people are dynamically involved in developing budget, then it can be used as a device to support managers in handling their branches effectively. Budget can be a useful device for motivating people but if budget is developed from top level and enforces a threat for employees it can be resisted and will cause harm to the organization (Drury, 2007). Objectives of Budgeting Through budget, organizations can regulate the actions of different divisions. An effective budgetary system can act as a comprehensive control system for organization if there are certain implied or apparent links between budgetary processes and organizational rewards (Flamholtz, 1983). Budgeting comprises of creating specific targets, implementing strategies to accomplish the targets, and occasionally match actual status with the targets. The targets can be general business objectives and particular goals for the individual divisions within organization. Budget provides a way for business by drawing the strategies of the operations in financial expressions. Budget helps organizations to direct activities and decreases the negative results (Warren & Et. Al., 2011). Though budgets are usually related with profit, they also play significant parts in operating several divisions of government. For instance, budgets are useful tools for managing finance for education and ration in rural areas. Budgets are also used in non-profit organizations such as public hospitals and cathedrals among others. Budget comprises of three activities which are planning, directing and controlling. Before planning the budget, it is important for organizations to forecast the amount of budget. The forecasting is often developed by considering the conclusions of past outcomes. Several statistical approaches are used for forecasting budget. The planning phase is comprised of forming specific objectives for future actions. It is a part of management process. Directing is the activity for satisfying the planned actions and controlling is periodically judging the progress of activities with the planned actions (Warren, 2008). Human Behavior in Budgeting Budget can have substantial effect on human behaviour. Budget can stimulate managers for developing their performance; adversely it can also de-motivate from putting extra effort and flatten the self-esteem of managers (Kimmel & Et. Al., 2010). The behavioural problems or dysfunctional consequences can arise from budgeting in three conditions which are: 1. The goal of budget is unattainable 2. The goal of budget is too simple to accomplish 3. The goal of budget disagrees with the goals of employees Unattainable goals: Employees will be de-motivated if performance expectations set by the managers are impractical or unattainable. An aggressive and achievable goal can probably motivate employees to accomplish the organizational objectives. Thus, employees should be engaged in
Human Behaviours in Budgeting Table of Contents Table of Contents 2 Introduction 3 Objectives of Budgeting 4 Human Behavior in Budgeting 5 Budget as a Motivational Instrument 6 Behavioral Trait of Budgeting 7 Management Control in Budgeting 8 Budgetary Control in Manufacturing Industry in Nigeria 9 Budgetary Control in Guinness Nigeria 9 Budget as Motivational Instrument in Guinness Nigeria 10 Communication and Coordination through Budgeting 11 Management Control System in Guinness Nigeria 11 Conclusion 12 References 13 Bibliography 16 Introduction In recent times, increased attention is being given to the importance of human behaviours in budgeting of the organizations…
This paper will discuss budgeting with respect to the construction industry. It will describe the functions of budgeting along with the role of budgeting in motivating behaviors within organizations. We will also discuss how potential dysfunctional consequences arise from the actions that budget holders may take when they are responsible for the budget.
The new century known as the information age depicts a very small percentage of success for the industry considering the evolution of new business practices. The new organizational structure must be resilient, proactive, and forward-looking so that the change program will be effective.
Budgeting Introduction:Budgeting plays an important role in a business. It is very significant for the reason that it permits the firm to ensure of how much credit it may provides to consumer before it begins to have liquidity troubles. “Cash budget is an opinion of inflow and outflow of the business of an organization for a particular period of time” (Foley 2009).
It generally provides considerable assistance in identifying the dimensions of business functions that need more attention to be upgraded and delivers a rational idea regarding the unnecessary expenses incurred within a particular organization with the motive of preserving financial effectiveness.
The new organizational structure must be resilient, proactive, and forward-looking so that the change program will be effective. To complete such development, a change of accounting system must also be considered, most of which is to get rid
According to Levensaler (2008), “performance management is an organizational process, which entails creating a favorable environment for employees to perform their jobs to the best of their abilities” (p. 3). Performance management captures almost all aspects of
Preparing a monthly budget includes recording of all possible incomes in the month, and listing of all fixed expenses like rent, telephone and utilities, and then last is the listing of variable expenses. This way, you can find the
It is administered into the body through various routes which include, oral, intravenous and intradermal among others.
Its primary components act on the brain and it can reach peak levels in the bloodstream rapidly based on how it is taken.
In order to determine achievable budgetary targets, both the organisation and managers should sit together and determine realistic and achievable budgetary targets. For this purpose, the managers should show their consent for achieving the
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