Budgeting Is A Quantitative Expression Of A Proposed Plan Of Action By Management For A Future Time Period

1885 Words Apr 1st, 2015 8 Pages
Budgeting is a quantitative expression of a proposed plan of action by management for a future time period and it’s an aid to the coordination and implementation of the plan. It can be both financial and non-financial aspect of these plans and act as a blue-print for the company to follow in a forthcoming period. (BHIMANI, 2008). While budgeting process has to do with setting goals and objective and developing for revenue, cost, production cash flows and other factors by gathering financial and investment strategy in place which helps to know what investment can be and how investment is been finalised. This means budgeting helps to put together decision making regarding capital budgeting, capital structure and working capital. (Drake and Fabozzi 2010). It is said that budgets sometimes gets a ‘bad press’. Budgets does not only bring ‘bad press’, but they are accused of stifling innovation and learning, it is emphasized that budgets attainment is believed to be liable to make many behavioural side effect which sometimes are dysfunctional to organisations. Issues may include data manipulation, Interdepartmental strife, job-related tension, group based ‘anti-management behaviour gaming and last but not the least, short-termism. This essay is going to focus on the role of budgeting and its contributions, and also discuss on dysfunctional behaviour of budgeting, and also, this essay will be discussing on how this behaviour can be minimised or eradicated. And analyse the…
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