The Impact Of Budgeting Planning And Control On Productivity In Northern Cable Processing Manufacturing Company (NOCACO), Kaduna
This study examined the impact of budgeting planning and control on productivity in NOCACO. The objective of this study is to bring light to the need for effective and efficient budget plans and control, and to find out how and to which the extent budgeting serve as a means of planning and control to increase productivity. The methods used for the study is survey method, method of data collection is questionnaire and personal interview and the method of data analysis is likert scale is used based on mean statistic. The findings based on the data presented and analyzed, the researcher was able to identify that budgeting planning and control techniques are used for increase productivity in the dynamic profit and non profit making organization which is the study of this research work and its also observed that good budgeting system will help any organization to increase its productivity level. The researcher concludes that productivity must be planned before it can be controlled. Operation has been determined and analyze into expenditure cost so as to know how realistic would be contribution to project goals to make budget without planning. Lastly, the researcher recommended that the company should employ competent and intelligent staff which a lot of experience to facilitate the planning which go a long way in controlling productivity in the organization.
1.1. Background of the Study
For any organization to operate meaningfully there has to be clear direction of where it is leading to or what it is aiming to achieve the standard of objectives and a means of monitoring derivatives from standard requires. These considerations can only be met through budgeting, planning as well as controlling.
A budget has been defined as a quantitative plan usually in monetary terms for the forth coming accounting year of the ensuring period. Budgeting planning/short term planning is the process of preparing detailed, short term (usually 1 year) plans for the function, activities and departments of the organization thus converting the long term co-operate plan into yearly action. Budgeting services as a very important tool for planning and control increase in productivity, in that budgeting aids planning for the future, if services as a control function through management by exception which is the assessment of performance for the purpose of controlling. It helps in co-coordinating of the work management in order to coordinate the activities of the organization.
1.2 Statement of Problem
Generally, organization whether manufacturing or service, required good budgeting for increasing productivity. Budgeting as a tool for planning and controlling does increase productivity. This is the problem of qualified personnel that are required for the purpose of preparation implementation and execution of budgeting, areas of responsibility will be decided by management and also budgeting pressure is another problem. The study will therefore be focused on whether budgeting contribute towards increasing productivity in organization or not.
1.3 Objectives of the Study
In view of the glaring problems as mentioned above the researchers main purpose of this study is to look carefully as the system of budgeting. This will enable the researcher to discover and bring to light any loop hole and lapses that may contribute on their little ways to aggregate private sector problem. Therefore, the objectives of the study are as follows:
- To examine the system of budgeting, planning and control in order to assess adequacy in productivity.
- To find out the extent budgeting serves in planning and increasing productivity.
- To examine facts about the organization and it mode of operation with regards to productivity.
- To identify the fact about operation and mode of operation.
1.4 Significance of the Study
The significance of this study is essential on its benefit and contribution to individual and organization first and foremost. This study will serve as important objectives reference to top executive of organization who wants to achieve efficiency in production. It will also be significant to students who want to carry out further research on the area of study secondly, the finding of this study will be useful to both the organization and any other similar organization as well as general public in the field as it depicts the nature of problem associated with budgeting in this part of the country. Finally, this study will also cover the public as an essential requirement for the award of higher national diploma.
1.5 Research Questions
The following questions were formulated to serve as parameter for the measurement of the objective earlier stated.
- How effective is budgeting, planning and control system in order to assess adequacy in productivity?
- What extent does budgeting serves in planning and increasing productivity?
- What are the fact about the operation and it mode of operation in NOCACO with regard to productivity?
- What are the facts about the operation and it mode of operation?
1.6 Scope of the Study
The study is restricted to cover the private sector, and suggest solution and recommendation on the topic of discussion which is budgeting as an effective tool for planning, control for increasing productivity.
1.7 Limitation of the Study
Like any other project, this study is not without limitations, the study emphasis being of the budgeting as an impact of budgeting planning and control on productivity in Northern Cable processing manufacturing company, Kaduna.
Some of the difficulties encountered in carrying the study include:
- Inability of the researcher to obtain adequate and relevant data from the organization. Especially on sensitive economic issues that organization are secretive about.
- Financial constraint is another limitation, finance have bee inadequate such the researcher has been unable to move around and get data and material required for the study.
- Material such as company documents (official) which involves their operation and procedure of the organization activities have been inadequate due to lack of proper record keeping and equipped libraries.
- The uncompromising nature of most respondents especially to questionnaires and verbal question.
- Lack of time to carryout out the persona observation of the enterprise operations properly.
- Sometimes the statistical method used for data analysis might not be best available.
1.8 Definition of Terms
A budget has been defined as a quantitative plan usually in monetary terms of the forthcoming accounting year or for the ensuing period.
Budgeting planning is short term planning is the process of preparing detailed short term (usually one year) plan for the function activities and department for the organization, thus converting the long term corporate plan into yearly action.
Zero Base Budgeting (ZBB):
Is formal defined by the (Chartered Institute of Management and Accounting) CIMA thus a method of budgeting whereby all activities is revaluated each time a budget is set.
Programme Planning and Budgeting System (PPBS):
Is a radical approach to budgeting based programme which are grouping of activities with common objectives.
The budgeting manual is an important aid to communication and instructional information manual not a list of agreed financial budget.
A flexible budget is one which is designed to dynast the budget cost level of suit the level of activities actually attained.
Planning can be defined as the establishment of activities and the formulation, evaluation and election of the polities strategies tactics and action required to achieve these objectives.
The formulation, evaluation and selection of strategies for the purpose of preparing a long term plan to attain objectives.
Is the process of preparing detailed short term (usually one year) plans for the functions, activities and department of the organization thus converting the log term corporation plan into action.
Control is concern with the different use of resources to achieve a previously, determine objective or set of objective within a plan productivity (total factor basis).
Productivity can be expressed on a total factor basis or on a partial factor basis productivity on a total factor basis.
Summary, Conclusion and Recommendations
This chapter summarizes the literature review as well as the detailed analysis that has been undertaken in this research work and (budgeting as an effective tool for increasing productivity in private sector).
Therefore, based on the findings arrived at recommendation are given and conclusion draw therefore.
The objective of private sector is basically to improve the effectiveness and providing power service both internally and externally and to reduce cost.
Budgeting as an effective tool, for planning and control is an important aspect of accounting system both in service or manufacturing organization. This is so because with budgeting planning and control no organization can function effectively in terms of product financial planning.
Therefore, budgeting as a tool for planning and control not be under estimated in an organization, budgeting is used a yardstick to evaluate the activities in an organization. And it has helped management to take crucial decision to guide them in their financial decision planning in running the organization.
The write undertook the researcher of the organization to find out whether the company applied budgeting. Planning and control procedures to its operation and in particular. The productivity of the organization, more over, if it had done that, how I done it and to what extent as well as finding out the efficient and effectiveness of the organization.
The company embarked on long term strategic planning and budgeting techniques to maximum its productivity as far back as the early year of its establishment. The strategies plan is described as the policy of even spread is an organization plan designed by the company in order to control productivity as well as creating some operational economics to the company.
In term of controlling he strategic plan of the company proved beyond reasonable doubt that budgeting as a means of planning and control are suitable for increasing productivity. On the other hand the short-term plan budget of the company should be restricted to the continuous aspect of its operation.
For budgeting to serve as an impact for planning and controlling mechanism technique, there has to be a plan upon which budget productivity is based.
Productivity must be planned before it can be controlled operation ahs to be determined and analyzed into expenditure costs so as to know how realistic would be contribution to project goals to make budget without planning.
It is just like putting the cat before the horse and a plan without a complimentary control would be pointless. The private sector has achieved the benefit of long range planning however it has not fully achieved the benefit of short range planning the budgeting fully. Moreover, the company has operated with adherence to the budgets and plans usually made in the areas to which they were applied and has been able to realize a targeted goals with only minor deviations from the budgets.
These deviations were due to external factors which cannot be controlled by the company (private sector) efficiency and effectiveness has also been achieved by the company through the use of long range planning which improve or increase productivity.
- The researcher is of the opinion that long range planning of the company should be maintained and pursued fully reached. This is because the company has benefited from it, ranging from creation of economic and minimization e.g. its expenditure. However, in the area of its operational planning, the company should devise a good specialization policy so that each department within the company should perform specific operation of function. This will help the company to achieve efficiency and effectiveness in the area of its short term tactical planning and budgeting. This is because for operational performance or goals to be achieved, such operation has to be planned which will go a long way in controlling the productivity of the organization.
- The company should employ competent and intelligent staff which a lot of experience to facilitate the planning which will go a long way in controlling in productivity in the organization.
- Budget plans and control should be reviewed on an operated effective and efficiently as to facilitate the realization of the goal which is the productivity increase in an organization.
- The company corporate planning should have the total support and involvement of top management. It is not a process to be left to technical specialist then assistance and advice can be extremely useful but management involvements is essential.
- The company should avoid excessive detail in corporate planning. I recommend that the corporate planning should provide a curse gained strategic structure for long term future.
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Frequently Asked Questions
What is the importance of a budgeting system in an organization?
Budgeting system could assist the management in planning, co-ordinating, inter-relation activities and performance evaluation, planning as it is widely accepted in determination of objectives or setting targets, formulation of policies, strategies and alternative priorities.
What is budgeting control?
Budgeting control has been widely accepted as management techniques which are aimed at controlling the operations of an enterprise towards the realization of predetermined objectives.
What is the importance of planning and improving productivity?
Proper planning and improved productivity is highly desired in industrial settings to optimize the available resources when there is limited resources and to control excessive spending in time of surplus.
Is budgeting a good setting strategy?
Budgeting is a good setting strategy where conflicts, power differentials and uncertainty are inherent, the system influenced behaviour and action positively and negatively, unfortunately, when control breakdown rather than seeking solutions, some executives are lamed yet others indulge in disclaiming responsibilities (Oliver 1975:125).
What is the importance of Budget Control?
Importance of Budgetary Control. The importance of budgetary control is reflected from the fact that it helps the management to efficiently track the company’s performance. Such monitoring ensures that the deviation of the company’s actual performance from the budgeted one is always under the scanner and can be rectified before it is too late.
Who is responsible for budgetary control?
The person who is ultimately responsible for ensuring that the budget is followed is known as the Budget Holder. Budget holders are usually the managers and operational directors of companies who are tasked by the owners/shareholders or the board of directors to ensure that the company follows whatever budget is laid out for them.
What is a productivity plan and how to create one?
The definition of a productivity plan lies in the name itself. It is a plan to make yourself productive by focusing on the right tasks that matter to you and your goals. You cannot download a blueprint from a self-improvement guru, follow it to the dot and expect results.
What is the importance of productivity?
The Importance of Productivity in the Workplace Andy Core is an author and speaker on Work-Life Balance, Wellbeing, and Peak Human Performance. Any effective and successful business understands the importance of productivity in the workplace. Being productive can help the firm increase and utilize the capacity of the human resources it has.
Why is it important to plan your projects before starting?
In fact, the more time and effort you put into planning your projects before starting to take action, the more quickly, effectively and successfully you will execute your project. When you have a well thought out plan (I like to call it a productivity plan), you don’t need to spend time questioning each and every decision as you take action.
What is the purpose of performance planning?
The performance planning is all about exploration of what individuals need to do and know in order to improve their performance and develop their skills and competences. It is also about knowing how their managers can provide the support and guidance they need. The whole process requires competence mapping and potential development.
What is the best budgeting strategy?
The Top 5 Recommended Budgeting Strategies 1 Zero-based Budget. With a zero-based budget, every dollar is assigned to a budget category, such as transportation or retirement savings. 2 50/30/20 Budget. … 3 Envelope Budget. … 4 Values-based Budget. … 5 “Pay Yourself First” Budget. …
How to approach your budget?
Four options for approaching your budget: Communicate strategy and budgeting process clearly to departments. Compare previous budget to plans (not to continue previous budgeting process, but to check your assumptions). Consider creating a StratEx budget. This type of budget is cross-departmental and designates strategic project funding
Do you link budget to strategy?
No matter what approach you take to budgeting, you have an opportunity to link it to strategy to help people see the value in your budget development process. When you link budget to strategy, you can stop dreading the budget process and instead, get inspired by budgeting!
Is it worth it to set up a budget?
If you set up such a budget properly, you’ll have a great understanding of your usual money habits and can set realistic targets for cutting back in the more flexible areas of your life. However, it does take a lot of work and attention to get value out of this method, as you get out of it what you put into it.