THE IMPACT OF BUDGETING PLANNING AND CONTROL ON PRODUCTIVITY
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THE IMPACT OF BUDGETING PLANNING AND CONTROL ON PRODUCTIVITY
ABSTRACT
This study looked at how budget planning and control affected productivity at NOCACO. The goal of this research is to highlight the importance of good and efficient budget planning and management, as well as to determine how and to what degree budgeting may be used as a planning and control tool to boost productivity.
The survey approach was utilised for the study, data collection was done by a questionnaire and personal interviews, and data analysis was done using a likert scale based on mean statistics.
Based on the data presented and analysed, the researcher was able to determine that budgeting planning and control techniques are used to increase productivity in dynamic profit and non-profit organisations, which is the focus of this research work.
It was also discovered that a good budgeting system will assist any organisation in increasing its productivity level. The study concludes that production needs to be planned before it can be regulated.
The operation has been defined and analysed in terms of expenditure costs in order to establish how practical it is to contribute to project goals without planning.
Finally, the researcher recommended that the corporation choose competent and knowledgeable employees with extensive expertise to ease planning, which will go a long way towards regulating productivity in the organisation.
Chapter one
INTRODUCTION
1.1 Background of the Study
For any organisation to function meaningfully, there must be a clear direction as to where it is going or what it is seeking to achieve in order to meet the standard of objectives, as well as a method of monitoring deviations from the standard. These considerations can only be addressed by budgeting, planning, and managing.
A budget has been defined as a quantitative plan, typically in monetary terms, for the following accounting year of the ensuing era. Budgeting planning/short term planning is the process of developing specific
short-term (often one-year) plans for the organization’s functions, operations, and departments, thereby transforming the long-term cooperative strategy into annual action.
Budgeting is a key instrument for planning and regulating productivity increases since it aids in future planning. It also serves as a control function through management by exception, which is the assessment of performance for the goal of controlling. It aids in the coordination of work management to ensure that the organization’s activities are coordinated.
1.2 Statement of the Problem
In general, organisations, whether manufacturing or service-oriented, required effective planning to increase efficiency. Budgeting, as a tool for planning and regulating, helps improve productivity. This is the problem of qualified professionals that are necessary for the purpose of preparation implementation and execution of budgeting
regions of responsibility will be established by management and also budgeting pressure is another difficulty. The study will thus focus on whether budgeting contributes to increased organisational productivity or not.
1.3 Objectives of the Study
Given the evident issues noted above, the researchers’ primary goal in conducting this study is to closely examine the budgeting mechanism. This will allow the researcher to identify and highlight any flaws and gaps that may lead to their small means of aggregating private sector issues. Therefore, the study’s aims are as follows:
i. Examine the budgeting, planning, and control systems to determine productivity adequacy.
ii. Determine the extent to which budgeting helps with planning and productivity.
iii. Examine facts about the organisation and its way of operation in terms of productivity.
iv. Determine the facts about operation and mode of operation.
1.4 Significance of the Study
The significance of this study is based mostly on its usefulness and contribution to individuals and organisations. This report will be a useful reference for top executives in organisations looking to improve manufacturing efficiency. It will also be significant for students who desire to conduct further research on the field of study.
Second, the study’s findings will be valuable to both the organisation and any other similar organisation, as well as the broader public, because they portray the nature of the budgeting problem in this region of the country. Finally, this study will address the public as a necessary prerequisite for the award of a higher national diploma.
1.5 RESEARCH QUESTIONS.
The following questions were prepared to serve as parameters for measuring the previously mentioned objective.
i. How effective is the budgeting, planning, and control system for determining production adequacy?
ii. What role does budgeting play in planning and enhancing productivity?
iii. What are the facts about the operation and manner of operation at NOCACO in terms of productivity?
iv. What are the details of the operation and its style of operation?
1.6 Scope of the Study
The study is limited to the private sector and proposes solutions and recommendations on the topic of discussion, which is budgeting as an effective instrument for planning, controlling, and enhancing productivity.
1.7 Limitations of the Study
This study, like any other project, has limitations. The study focuses on budgeting and the influence of budgeting planning and control on productivity in Northern Cable Processing Manufacturing Company, Kaduna. Some of the obstacles encountered while conducting the study include:
a) The researcher is unable to get appropriate and relevant data from the organisation. Especially on delicate economic concerns that organisations keep quiet about.
b) Financial constraints are another drawback; because funds have been insufficient, the researcher has been unable to go about and obtain the data and materials needed for the study.
c) Material such as business documents (official) relating to the operation and procedures of the organization’s activities have been insufficient due to a lack of efficient record keeping and equipped libraries.
d) Most responders are uncompromising, particularly when it comes to questionnaires and spoken questions.
g) A lack of time to adequately conduct individual observation of corporate activities.
f) Statistical methods employed for data analysis are not always the best accessible.
1.8 Definition of Terms
§ A budget is a financial plan for the upcoming year or timeframe.
Budgeting is the process of creating a precise one-year plan for an organization’s functions, operations, and departments, turning the long-term corporate plan into annual action.
The Chartered Institute of Management and Accounting (CIMA) defines Zero Base Budgeting (ZBB) as a budgeting strategy that revalues all activities when a budget is set.
The Programme Planning and Budgeting System (PPBS) is a radical approach to budgeting that groups activities with shared objectives.
The budget manual serves as a communication and teaching tool, rather than a collection of agreed-upon financial budgets.
§ Flexible Budgeting: A flexible budget adjusts costs based on real activities.
Planning involves establishing activities, formulating, evaluating, and implementing policies to attain objectives.
Strategic planning involves developing, evaluating, and selecting strategies to achieve long-term objectives.
Tactical planning involves creating specific, one-year plans for an organization’s operations, activities, and departments, putting the long-term corporate strategy into action.
§ Control refers to the use of resources to meet predetermined objectives within a productivity plan (total factor basis).
Productivity can be measured on a total or partial factor basis.
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