Budgeting As An Essential Practice In The Actualization Of Goals In A Business Organisation
(A Case Study Of Emenite Nigeria Ltd, Emene, Enugu)
Budgeting plays a crucial role in the realization of objectives within a business organization, serving as a cornerstone for financial planning and decision-making processes. It facilitates the allocation of resources in alignment with strategic goals, ensuring efficient use of funds across various departments and projects. By forecasting income and expenses, budgeting enables businesses to anticipate financial needs and challenges, thus enabling proactive measures to mitigate risks and seize opportunities. Moreover, it fosters accountability and transparency within the organization, as stakeholders can track expenditures against predetermined targets and assess performance accordingly. Ultimately, effective budgeting empowers businesses to optimize resource utilization, drive growth initiatives, and achieve sustainable success.
The proposed research topic is summarized as follows firstly, it provides the basics for the establishment of a comprehensive definition of Budgeting, by considering the various paramenters. That ensures it’s effective and efficient practice in an organization.
Secondly, the research work equally considers the limitations that are associated with the successful implementation of budgeting in an organisation as well as in business practices and how these limitations impedes the actualization of pre-determined goals.
Also, this look emphases the needs for long term budgeting as against short term budgeting and how this managerial decision can enhance the performances of prospective and present managers in business practices.
Finally, it critically looks at the fundamental roles of the Standard Organization of Nigeria (SON) and other business and organizational regulatory bodies in ensuring that budgeting is fully implemented in organisation practices.
Cover page
Title page
Approval page
Dedication
Acknowledgement
Table of content
List of table
Abstract
CHAPTER ONE:
INTRODUCTION
1.1 Background of the study
1.2 Statement of problems
1.3 Purpose (objective) of the study
1.4 Research Questions
1.5 Hypothesis
1.6 The scope (Delimitation) of the study.
1.7 The significance of the study
1.8 Definition of terms
CHAPTER TWO:
REVIEW OF LITERATURE
2.1 Concept of budgeting
2.2 Review of related Literatures.
2.3 The concept of planning, budgeting and organizational goals.
2.4 The concept of deficit and surplus budget.
2.5 The factors necessary for implementation of budgeting.\
CHAPTER THREE:
RESEARCH METHODOLOGY
3.1 The Design of the study
3.2 Area of study
3.3 The population of study
3.4 Sample and sampling technique
3.5 Instrument for data collection
3.6 Validation of instrument
3.7 Reliability of instrument
3.8 Method for data collection.
3.9 Method for data Analysis.
CHAPTER FOUR:
DATA PRESENTATION AND ANALYSIS
4.1 Data presentation and Results
4.2 Summary of findings.
CHAPTER FIVE:
DISCUSSION AND CONCLUSION OF RESULTS
5.1 Discussion of findings
5.2 Conclusion of the study
5.3 Recommendation
5.4 Implications of the findings
5.5 Limitations of the study
5.6 Suggestion for further studies
References
Appendix
INTRODUCTION
1.1 Background of the study
The concept and practice of budgeting dated back to the modern organizational or business era. The period that was characterized by population explosion due to technological advancement, which has brought about the situation of scarcity of resources especially material and financial.
Regardless of the above trend, organisations and businesses are faced with the compulsory challenge of maximizing their profit and also meeting the ever-growing needs of the people/society, which can only be achieved through the avoidance of deficit which brings about scarcity of resources and surplus which brings about wastages. Thus, the introduction of budgeting mechanisms to take care of the two conditions mentioned above, with the aim of making use of the full resource capacity of the organisation/business venture without falling below or exceeding the production limits of the establishment
1.2 Statement of problem
The present research work presents the following research problems.
(i) The problems of implementation of the budgetary statements that has been initiated by business/organizational experts most times, is under-implemented.
(ii) The inability of organized wind/business managers to predict the possible economic changes in the nearest future before initiating budgetary policies.
(iii) The problem of inadequate knowledge of the present inflationary and deflationary rate in the market economy, before making budgets.
(iv) Also, the problem of in competent administrators who often initiate unfavourable budgetary policies due to personal reasons.
(v) Lastly, the problem of scarcity of resources which does not match budget policies with actions.
1.3 Purpose (objectives) of the study
The present research work serves the following purpose.
(i) To create awareness about the significant role of budgeting in human/organizational/business resources management.
(ii) To educate managers on economy assessment before they embark on budgetary policies and actions.
(iii) To provide the guideline for administrators to execute accurate budgetary policies.
(iv) To enlighten individuals on the need to make maximum use of their resources through personal budgeting.
(v) The research work also has the objective to promote business and organizational development through budgeting.
1. 4 Research Questions
During the course of this research work, the following questions were raised and deliberated upon.
Firstly, 1.0 what are the significance of budgeting to every section of an organisation or business?
Secondly, 2.0 To what extent has Emenite Nigeria Ltd and other organisations in the same class implemented budgeting?
Thirdly, 3.0 What are the roles of the administrators in ensuring the efficient and effective implantation?
Moreso, 4.0 what is the relationship between budgeting and organizational/business growth and development?
Finally, 5.0 To what extent has the standard organisation of Nigeria encouraged both small medium & large seek organisation?
1.5 HYPOTHESIS
The present research work is based on these hypothetical statements, which provides the frame work for the discussion of the research topic.
H1: Research has shown that Emenite Nigeria Ltd has put in place the necessary procedures, policies and programmes that enhances budgetary policies and implementation.
H2: It has also been proven that budgeting has helped Emenite Nigeria Ltd to attain profit maximization and sustainable practices.
1.6 Scope (Delimitation) of the study
The scope of this research work is budgeting in organisation an business establishments. The scope also includes the significance of budgeting in the actualization of the goals of the businesses and organisations, using Emenite Nigeria ltd, Enugu as a reference point.
Moreso, the research work also covers the concept of budgeting as a policy one as an action in organizational and business practice.
1.7 THE SIGNIFICANCE OF THE STUDY
The present research work has numerous importance, some of which are considered in this context.
(i) The research work has encouraged organisations and business establishment on the need to ensure that their administrators and managers adopts comprehensive budgetary practices.
(ii) It has the significance of promoting the implementation of household budgetary practices for sustainable family living.
(iii) It provides the basis for improved economic and business practices at individual, organizational, state and national level.
(iv) The research work has created the opportunity for prospective and present investors to be able to predict the possible future economic situations, for effective adaptation in the business environment.
(v) Finally, it has the significance of promoting maximum utilization of the resource potential of an organisation and business establishments for profit maximization and achievement of specified goals.
1.8 DEFINITION OF TERMS
During the course of the research work, the following relevant terms were identified and defined as follows: Budgeting, business, organisation, long-term, short-term, managerial, deficit, surplus, inflationary rate, deflationary rate and policies.
Budgeting: This is the process of making a financial plan that will take care of the business expenses of an organisation, with the aim of ensuring the maximum utilization of their financial resources, through the avoidance of deficit situation.
Business: This is the economic and commercial activities of an individual and organisation that is aimed at improving the welfare condition of the people and the generation of profit by the business operators.
Organisation: This is the perfect integration of work plan, procedures, equipments, human & material resources to achieve sets of pre-determined objectives.
Long-term: This is the budget duration that takes care of the future financial performances or operations of a business organisation.
Short-term: This is the budget duration that is aimed at taking care of the present financial operations of a business organisation.
Managerial: This is organizational or business functions that demand high level of administrative attention.
Deficit: This is the budget situation whereby the financial plan of an organisation is not adequate to take care of their expenditure after implement.
Surplus: This is the budget situation whereby the financial considerations of an organisation is more than expenditure after implementation.
Inflationary rate: This is the rate at which the value of the currency depreciates with respects to the budgetar policies and actions of fthe business organisation.
Deflationary rate: This is the rate at which the value of the currency appreciate with respect to the budgetary plans and implementations of the organisation.
Policies: This is the decision that guides the imitation of budgets and it’s execution in the business organisation.
Budgeting As An Essential Practice In The Actualization Of Goals In A Business Organisation:
Budgeting is indeed an essential practice in the actualization of goals in a business organization. It involves the process of planning, estimating, and allocating resources to achieve specific objectives within a defined time frame. Effective budgeting provides numerous benefits that contribute to the overall success and growth of a business. Here’s how budgeting helps in the actualization of goals:
- Goal Setting and Clarity: Budgeting requires an organization to define its goals and objectives clearly. It helps management align the financial resources with strategic priorities. This ensures that everyone in the organization understands what needs to be achieved and how resources will be allocated to attain those goals.
- Resource Allocation: Budgeting involves allocating resources such as funds, personnel, and time to various activities and projects. By having a structured allocation plan, businesses can prioritize initiatives that directly contribute to the achievement of their goals. This prevents wastage of resources on activities that are not aligned with the organization’s objectives.
- Financial Planning: Budgeting forces organizations to plan their finances in advance. This helps in determining the financial feasibility of various projects and initiatives. It also aids in identifying potential cash flow issues and allows for corrective actions to be taken in a timely manner.
- Performance Measurement: Budgets serve as benchmarks against which actual performance can be measured. By comparing actual outcomes with budgeted figures, organizations can identify areas of over-performance or underperformance. This facilitates proactive decision-making and adjustments to stay on track toward achieving goals.
- Control and Accountability: Budgeting instills a sense of accountability within the organization. Departments and individuals are responsible for managing their allocated resources within the specified limits. This control helps prevent overspending and ensures that resources are used efficiently and effectively.
- Risk Management: Budgeting enables organizations to identify potential risks and uncertainties that might affect the achievement of goals. By including contingencies in the budget, businesses can prepare for unexpected events and minimize their impact on the overall objectives.
- Communication and Coordination: The budgeting process involves collaboration and communication across different departments and levels of the organization. This fosters coordination among teams and helps break down silos, as everyone works together to achieve common goals.
- Decision Making: Budgeting facilitates informed decision-making. When considering new projects or investments, organizations can evaluate their financial feasibility and alignment with strategic objectives based on the budgeted resources.
- Long-Term Planning: Through budgeting, businesses can plan not only for the short term but also for the long term. This includes capital expenditure planning, expansion strategies, and other initiatives that contribute to sustained growth and success.
- Motivation and Incentives: Well-structured budgets can be used to set performance targets and incentives for employees and teams. When individuals see a clear connection between their efforts and the organization’s goals, they are motivated to perform at their best.
In summary, budgeting plays a pivotal role in the actualization of goals within a business organization. It aligns financial resources, guides decision-making, and ensures accountability throughout the organization. By fostering efficient resource allocation and measurement of performance, budgeting contributes to the overall success and growth of the business.