BUDGETING AS AN ESSENTIAL PRACTICE IN GOAL ATTAINMENT IN A BUSINESS ORGANIZATION

FIRST PART

INTRODUCTION

1.1 Background of the Research

The human factor in the creation of goods and services has a propensity to squander or underutilize the limited resources, despite the fact that wants are numerous and resources are few. In a market where numerous enterprises compete with one another, only those capable of producing at the lowest feasible cost can remain. In order to remain in business and fulfill the company’s goals of profitability and stability, it is crucial for every serious enterprise to produce at the lowest possible cost. In light of this, there is a pressing need to plan the firm’s actions realistically, taking into account the firm’s limiting circumstances and long-term goals. In order to accomplish this, budgeting, a planning and control tool, becomes essential. Budgeting is common and has long been seen as an indispensable management tool. The Chartered Institute of Management Accountants (CIMA) defines a budget as “a financial or qualitative statement developed and authorized prior to a defined time period for the aim of achieving a specific objective.” It may include income, expenditures, and capital employment.” CIMA additionally defined budgetary control as “the establishment of budgets relating the responsibilities of executives to the requirements of a policy and the continuous comparisons of actual with budgeted results, either to secure by individual action the objectives of that policy or as a basis for its revision.” According to Horngreen (1982), a budget is “a quantitative description of an action plan and a tool for coordination and implementation.” According to the Oxford Advanced Learners Dictionary, a budget is an estimate or plan of the available funds and how they will be spent over time. Both Horngreen and the dictionary emphasized the word plan, but planning is present in every part of human endeavor; therefore, planning is a blueprint for corporate growth and a road map for development that assists in determining quantitative and qualitative objectives. It entails establishing a goal based on the objectives and maintaining the resources. The process of planning requires business managers to act as seers and seek to foretell the future course of action that will be taken. These so-called fortune-tellers’ predictions will influence whether or not the company’s aims are accomplished.

For functions such as sales and manufacturing, or for financial and resource items such as cash, personnel, acquisitions, capital expenditures, etc., used in light of their scarcity in every sector of the economy relative to requirements. The increasing complexity of the corporate environment and the ferocity of market competitiveness render budgeting an indispensable management tool. Management must know where it wants to be at the conclusion of a specified time period and how it plans to get there. It is not enough for a corporation to know what market share it wishes to obtain; it must also have a plan for achieving this target. Sadly, a large percentage of organizations have not embraced this vital financial tool that has guided a number of successful businesses over the years. The situation grows more perilous for Small and Medium-Sized Enterprises (SMEs) and has a terrifying quality for sole proprietorships and single proprietorships. The position is that these businesses run without a transparent financial plan indicating their current physical state and future goals. In terms of their predicted financial incomes and expenditures, they lack a strategy. Budgeting for an individual may not be a formal plan, but if control is to be exercised, his or her behaviors may be based on some degree of budgeting and represent some amount of planning. Businesses and other organizational operations must be well-planned in order for them to run successfully and affordably, utilizing all available resources to achieve the desired outcomes. Governments at all levels must budget for the income to be made and expenditures to be spent utilizing their limited resources in order to provide for the general welfare of their citizens. Budgetary irresponsibility on the part of any of the three economic sectors will inevitably cause a multitude of issues.

1.2 Description of the Problem

Business failures in Nigeria can be traced to a variety of budgeting-related concerns. The following are mentioned in passing:

Complete absence of budgets prior to operations.

Developing unrealistic budgets.

Noncompliance with budgets, if applicable.

Inability to fund budgets due to limitations.

Budgeting methods, responsibilities, and deadlines lack clarity and consistency.

Lack of follow-up and analysis of variations.

If the scenario is allowed to continue, it is feared that there would be a high rate of business closures due to poor financial performance. This study aims to evaluate the relationship between budget and organizational achievement in a sample of Delta State, Nigeria manufacturing enterprises.

1.3 Objective of the Research

This study’s primary objective is to determine the significance of budgeting to the achievement of organizational objectives. Specifically, the research aims to:

1. To examine the influence of budgeting on the achievement of organization objectives

2. Examine the difficulties of budgeting

3. Determine the significance of budgeting

4. Provide solutions to these issues

1.4 Investigative Question

What impact does budgeting have on the achievement of organization goals?

What are the difficulties of budgeting?

What is the significance of budgeting?

4. What solutions can be proposed for these issues?

1.5 Scientific Hypothesis

There is no major impact of budgeting on the achievement of organizational objectives.

Hello: budgeting has a big impact on the achievement of organization goals.

1.6 Importance of the Research

The present research has multiple significances, some of which are discussed here.

1. The research has prompted businesses and organizations to guarantee that their administrators and managers embrace a holistic approach.

Budgetary methods.

Promoting the implementation of household budgeting methods for sustainable family living is its significance.

3. It serves as the foundation for enhanced economic and commercial operations at the individual, organizational, state, and national levels.

The research has made it feasible for potential and current investors to foresee likely future economic scenarios, allowing for better business adaption.