Budget Concept: The Reality Of Human Behavior In Budgeting Processes (original) (raw)
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Using an intelligent budget in confronting budgetary slacks
مجلة الدراسات المالية والتجارية
Research Purpose: Proposing an intelligent budget that is proactive, sensitive, and responsive to any changes that might happen. The main purpose of developing that intelligent budget is not only confronting budgetary slacks that results from agents' moral hazards such as budgetary frauds or budgetary collusions, but also the slacks resulting from the sudden or unexpected changes in the business environment which have been referred to it as contingent factors. Research design/Methodology: The research has been prepared using a combination of both deductive and inductive methodology, through the review of the academic literature of management accounting in the field of budgeting, and also through the creation of a new proposed model for budgeting called the intelligent budget. Also a questionnaire has been conducted to validate the assumptions of the research. Research Originality: The research is mainly based on evaluating the traditional budgeting techniques and propose a whole new budget calling it an intelligent budget that is a combination of several parts such as the forecasting techniques used in the budget and also the budgeting team responsible for the budget preparation. Research Findings: It as concluded that, the determination of the forecasting technique itself is highly affecting the success of the proposed intelligent budget. Accordingly, it was suggested that rolling forecast is the most appropriate technique for an intelligent budget due to the continuous modifications allowed to be done in the budget to keep up with the changes as previously mentioned. The bargaining capacity and the bargaining ability of each agent is a major factor affecting the budget, and knowing that there might be coalitions between the agents is a matter that complicates the predictability of the budget. Accordingly, an intelligent budget should take into consideration the behavioral aspects and the multiple scenarios for each singular item to be determined in the budget.
FACTORS AFFECTING BUDGET PREPARATION AND UTILIZATION: A CASE OF WEST GUJI ZONE FINANCE OFFICES
Ejersa Wako, 2022
Budgeting is about making plans for the future, implementing those plans and monitoring activities to see whether they conform to the plan. The purpose of this study is to assess factor affecting budget preparation and budget utilization of West Guji Zone finance offices. The study was been informed by Theory of Budgeting. To achieve the objectives of the thesis, both qualitative and quantitative method of research employed. This study adopted the descriptive survey design and targeted 205 respondents from where Yamane’s proportional sampling technique formula was been used to get sample size of 136 respondents. Four-budget holders finance office taken and 34 key informants were selected from each budget holder with 136 respondents. Self-administered questionnaires distributed to 136 respondents and 131 questionnaires returned. Secondary data collected from budget performance reports, financial statements and manuals. Pilot testing done to test instrument validity and reliability. Collected data was edited and coded; and then SPSS version 22 was been used to analyze the data. Descriptive statistical analysis and inferential was used to summarize data using frequencies, percentages and means while inferential statistics were computed; that is, Pearson correlation coefficient and multiple regression analysis, OLS assumptions were tested to find out whether there is linear regression and multiple relationship between the independent and dependent variables . Analyzed data presented in tables, graph and figures. As the findings shows, the overall budgetary system on study area indicate that; there is lack of proper budget planning, lack of modern technology, problem of organizational budget performances, there is no freedom of employee job performance ,There is less participation of skilled manpower. There is no any market-oriented cost estimation practice .Based on the finding researcher conclude that there are number of challenging issue in study area with regard to budget preparation and utilization Therefore, to improve budgetary problem in West Guji Zone finance offices this study would be useful to the finance organization to monitor budget by reducing internal and external factors. and it gives awareness for employees and it calls for taking any possible and remedial actions in the subsequent years. Keywords: Budget preparation, Utilization, internal and external factor.
Traditional Budgeting in Today’s Business Environment
Journal of Applied Finance and Banking, 2017
Traditional budgeting has been subject to several controversies with many arguing in favour and against its use. The two sided arguments were discussed with the help of existing literatures. This research provides a conceptual meaning of traditional budgeting as an examination of income with respect to expenditure and developed a model framework for understanding the usefulness of traditional budgeting in today’s business environment. A tripod relationship between budget, household and managers was developed & analysed. The research explains the benefits of traditional budgeting and also provides an alternative to traditional budgeting concept in today’s business world. The study shows that influence of organisational culture was seen to constitute the bane of traditional budgeting process, implementation and performance management with control as the critical variable at all levels of human endeavours and concludes that budgeting is the panacea for enforcement of control, targe...
Agency and structure in budgeting: Thesis, antithesis and synthesis
Critical Perspectives on Accounting, 2011
The accounting literature has used agent-centered and structure-centered theories to explain the design, operation and consequences of budgeting systems. These perspectives have traditionally been presented as alternative and mutually exclusive approaches to understanding budgeting phenomena -as thesis and antithesis. We return to Macintosh and Scapens ' (1990) call to reexamine the relationship between agency and structure in management accounting research and explore the emerging synthesis that could provide new directions for research on budgeting.
Journal of Accounting and Business Education, 2017
This study aims to gain an understanding of the importance of maintaining the consistency of planning and budgeting from the viewpoint of the Local Government Budget Team (TAPD). Using a phenomenological approach allows the disclosure of meaning systematically related to the phenomenon being studied. The study was developed using primary and secondary data sources. The primary data were derived from unstructured interviews and the secondary data used by researcher were in the form planning and budgetting documents, namely, RPJMD, RKPD, KUA PPAS and APBD. Some findings indicate that there are still many problems in the process of budget planning and budgeting at the research site. The problems manifest in the form of constraints in achieving consistency in planning and budgeting caused by both internal and external factors. Eventually, the results of the study conclude that efforts to maintain the consistency of planning and budgeting interpreted by TAPD of Probolinggo as guidance in realizing the accountability of the financial performance of local government through loyalty, effective evaluation and supervision and strong commitmen from the employees.
Budgeting Research: Three Theoretical Perspectives and Criteria for Selective Integration
Journal of Management Accounting Research, 2003
Budgeting is one of the most extensively researched topics in management accounting and has been studied from the theoretical perspectives of economics, psychology, and sociology. Thus, budgeting offers opportunities for research that chooses between competing theories from these perspectives or combines theories from different perspectives if they are compatible, to create more complete and valid explanations of the causes and effects of budgeting practices. In the first part of the paper we analyze budgeting research in the three theoretical perspectives, focusing on important similarities and differences across perspectives with respect to the primary research question, levels of analysis, assumptions about rationality and equilibrium, budgeting and nonbudgeting variables, and causal-model forms. In the last part of this paper we identify four interrelated criteria for selective integrative research and provide an example of using these criteria for research on participative budgeting. the questions addressed in the accounting literature. Also, some streams of sociology-based research are not included because of epistemological differences (e.g., differences about what constitutes ''reality'' or persuasive evidence) that pose significant challenges to integration with the largely positivist research described in this paper. 2 A second scope limitation is that the integration this paper aims at is selective, making valid use of a specific theory, concept, or result developed in one theoretical perspective to research a specific set of cause-and-effect relations in a different perspective. The paper does not aim at a general theoretical unification or the creation of ''one big model'' of budgeting.
Appropriate Reinforcement Contingencies in the Budgeting Process
Journal of Accounting Research, 1973
Budgeting is a major tool used in business to express quan titatively a plan of acti on to coordina te and implement t he p lan , to evaluate effo rts to achieve it, and t o control activit ies in t he organization. Because budgetH are m ade by people fo r t he purpm;c of guiding tlwir actions a nd mca.'i uring their success, budgets can not be analyz ed from a n account ing standpoint onl y. To carry out t he budgeting cycle r· .ffr ct ivdy , t hr rdon\ on e must be aware of the b ehavioral considrrat ions involved.