Decision Making And Organizational Justice

Budget management analysis is used by mangers as a tool and helps determine that all resources available are being used efficiently. The budgets are determined yearly and are based upon the previous year’s budget and variances. This paper will discuss specific strategies to manage budgets within forecast, compare five to seven expense results with budget expectations, describe possible reasons for variances, give strategies to keep results aligned with expectations, recommend three benchmarking techniques, and identify those that might improve budget accuracy, and justify the choices made.

If the estimations in a budgeting process are poor, the organisation and the customers may suffer.

Budgets and Planning. To begin with, the program, like the organization, fosters an open and collaborative environment for the process to take place. In this regard, it is, therefore, impossible for any one space or environment to be able to accommodate every conceivable project or application that is “thought up”. Therefore, certain perimeters and guidelines need to be established to assess costs with the program and help determine a course of action in future planning. As we are discussing costs, we assume there is a

Budgets involve and affect the employees and the members of the deciding board, they may cause conflict. There may be difficult opinions on how limited funds are spent. Some departments e.g. production with tight budgets could feel self-conscious. This means decision will be slowed down and this can also slow down the production rate and this means ASDA would not be able to male as much in the given

This research paper is a brief discussion of budget management analysis. Budgeting is the key to financial management, and is the key to translates an organization goals or plan into money. Budgeting is a rough estimate of how much a company will need to get their work done, and provides the basis for evaluating performance, a source of motivation, coordinating business activities, a tool for management communication and instructions to employees. Without a budget an organization would be like a driver, driving blinded without instructions or any sense of direction, that’s how important a budget is to every organization and individual likewise (Clark, 2005).

Budgets should not be a managers task only. The whole organization should be involved in the budgeting process.

program directors manage their own areas as well as help out and organize other departments

A company's budget serves as a guideline in planning and committing costs in order to meet tactical and strategic goals. Tactical goals such as providing budgetary costs for daily operations, and strategic objectives that include R&D, production, marketing, and distribution are all part of the budgeting process. Serving as a guideline rather than being set in stone, the budget is a snapshot of manager's "best thinking at the time it is prepared." (Marshall, 2003, p.496) The budget is a method in which to reign-in discretionary spending, and will likely show variances between what costs have been anticipated and what costs are actually incurred.

The next lever, the management control process, consists of four sections. The first of these is programming, which must come from strategy and be monitored to remain consistent with the firm’s objectives. The second process is budgeting, which need to fit with strategy formulation and programming. The last two of the four sections is measuring and reporting. These two sections focus on the “need for activities that measure and report both financial and nonfinancial information” . The measuring and reporting of a firm’s management control can be related to budget information and the motivation process. What a firm spends to drive motivation, and the amount of motivation that comes from it, can create contrasting cultures that needs information to why that is the result. Since this lever can be manipulated quickly, it is one that managers should focus on.

Budgets serve five main purposes; planning, facilitating communication and coordination, allocating resources, controlling profits and operations and evaluating performance and providing incentives. The budgeting process requires both technical and interpersonal leadership skills to achieve each of these purposes effectively. The director’s memo demonstrates several short comings in the budgeting process. The director instituted the “responsibility accounting system” as a means of evaluating performance. However, the DPW director has not consulted Sam in the budget process. Sam understands that his total expenditures are impacted by relatively unpredictable events that contribute to an uncontrollable element of his cost. The

A budget can be disadvantageous also. There is judgment and subjectivity in the budgeting process. It does not consider quality and customer service. Budgets can be seen as pressure devices imposed by management, thus resulting in: bad labour relations. Budget could results departmental conflict arises due to disputes over resource allocation, and departments blaming each other if targets are not attained. It is difficult to reconcile personal and corporate goals

Budget formulation and use are tools that guide many decision making strategies in business. The measures that are least effective could create an avalanche of catastrophic events that can negatively impact the decision making strategies. It is in the best interest of the pertinent parties to draft an operating budget based on a collective set of information relating to organizational vision and mission. Ineffective measures can be catastrophic based on the foundation for measures used in creating the budget. Among the many issues organizations face that relates to creating an effective operating budget results from poor

Budget is time-consuming, especially if it involves a poorly managed company. The budget only pays attention to the quantitative aspect of business while neglecting the qualitative aspects. It does not consider the quality of services or goods and therefore inconsiderate of customers’ satisfaction. Another disadvantage of a budget is that it is inaccurate. A firm rarely “makes budget.” The hope is that the business activity will be close to the budget, but it could be off considerably and lead to bad hiring, spending and production decisions. This is because budget preparation is based on assumptions and thereby changes in the business environment could lead to unachievable

Budget and budgetary control practices though very essential to meeting organizational goals, are mostly hastily and improperly prepared. This eventually leads to unfulfilled budget and budgetary control practices.

Many businesses expect employees to achieve budget targets as part of their overall performance. While the specifics requirements of each employee differ with the position and nature of the company, it is common for employees to be expected to sell a certain number of items, control costs versus a budgeted amount or reduce waste compared with a benchmark. A potential downfall of using budget information for performance evaluation is that employees may be so concerned with making budget targets that they may do so at the cost of other parts of the business.