According to Argyris (1953), “budgets frequently serve as a basis for rewarding and penalizing those in the organization” (Argyris, 1953, p. 97). Further, Argyris (1953) describes a budget as a measuring instrument, which sets goals which mean that people can be measured in this way (Argyris, 1953). People tend to have a problem with this and complain about this part of the budget as no one wants to seem as inefficient. For supervisors, budgets can be a way to put things in writing, and thus vent other unrelated issues (Argyris, 1953). Also, budgets can be considered to be pressure devices to keep employees on track and motivated, while also being pressured (Argyris, 1953).
On the other hand, Rankin, Schwartz, and Young (2008) indicates that
…show more content…
With that being said, this writer can detail various examples where this writer was subject to being put on a budget in personal life as well as at work. For instance, when this writer wanted to make a purchase for something, this writer would put herself on a budget to save enough for that one object. Today, all the bills are kept track of along with the income made to budget myself. Thus budgeting is a never ending story of my life and others as well. However, in these examples budgeting can be a motivating experience as it is a way to keep me on track and knowing that there is light at the end of the tunnel. In these cases, budgeting in my personal life did and has helped my performance. At work, the budget has been cut on various occasions in which it directly affected individuals at the lower level of the hierarchy, such as myself. For instance, I drive to appointments to meet with clients. On several occasions for purposes of budget cuts, the mileage amount dropped from $0.56 per mile to $0.50 per mile, which made a great difference. Part of me was upset with this cut, however, another was still grateful that I had a job. Budgeting, is central to everyday operations in the workplace, as it is the driving force behind the services that are provided to the clients with DD and what will no longer be provided. In the cases, where some
Budgeting is a familiar term to most American families. Dictionary.com defines budgeting as an estimate, often itemized, of expected income and expense for a given period in the future. In order to avoid debt, bankruptcy, or overspending it is common to create a spreadsheet of some sort tracking your spending and income. On a grander scheme, the Unites States has to budget as well.
Budgets are the financial requirements and consequences of plans. Budgets are made with specific goals in mind. Budgets can be used to lower living expenses, increase savings, or to save for a purpose such as: education or retirement. Budgeting is a process that involves these actions: defining goals, gathering information, forming expectations, reconciling goals and data, monitoring goals and variances, adjusting budgets, and redefining goals.
Currently, an imbalance exists, leading to nonproductive tensions (Nolan, Bisognano, 2006).” Clinicians often see themselves defending patients and professional standards against the finance department. They see themselves as the protectors of quality. The finance professionals see themselves protecting the resources of the organization. The finance department usually provides supervisors with weekly or monthly cost reports of expenditures against the budget (McConnell, C, 2010). This is difficult for management because the clinicians see that they need new equipment to help the patients and the finance professionals see unnecessary spending that could be saved for something more important. Management must figure out how to decipher how to keep their clinicians happy and finance professionals happy. Management must figure out how to handle difficulty between staff members and ways to reduce the cost but keep the quality of care up especially with the budget the finance department have gave
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.
Participative Budgeting is the situation in which budgets are designed and set after input from subordinate managers, instead of merely being imposed. The idea behind this sort of budgeting is to assign responsibility to subordinate managers and place a form of personal ownership on the final budget. Nearly two decades of management accounting research has resulted in equivocal findings on the consequences and effects of participative budgeting (Lindquist 1995). Participative budgeting certainly has various advantages, these include the transferral of information from subordinate to superior increased job satisfaction for the subordinate, budgetary responsibility and goal congruence. Its disadvantages include budgetary slack and negative motivation, however it is the conditions in which participative budgeting takes place determines whether the budgeting process is successful. The conditions are dependent on various factors such as the level of participation, level of subordinate influence, the extent to which budgetary slack takes place, volatility, job related information, and the complexity of the budget.
Balance the Budget Balancing the budget for the United States is a challenge for policymakers because there are very difficult decisions that must be made that can directly affect United States citizens. After completing the simulator for balancing the budget, I now realize the difficulty that is associated with balancing the budget. The decisions are difficult because no matter what cuts you are making the budget your decision is going to deprive a group of people or an agency of essential funds to their existence. Raising taxes, while trying to balance the budget, creates a problem because the ramifications of these taxes can also affect specific groups.
Capital budgeting is one of the primary activities of a company. Most of the company uses capital budgeting for decision making process of selecting and evaluating long-term investment. The company have to make a right decision with respect to investment in fixed asset such as purchasing of new equipment and delivery vehicles, constructing additions to buildings and many more. The decision must be right because of the project involve huge amount of cash outflow and it is committed for many years.
With these three scenarios, I have learned several things about making a personal budget. I learned how to research the economic situation and best predict the prices for certain things. I also learned how best to manage bills under a tight and a very free budget. I learned how to manage money, not just for myself, but for others that I may one day be responsible for.
I never used a budget, as things seemed to just conveniently cost enough for me to be able to survive and put a little away in my bank account. I have lost this job, however, and do hope to find a new one soon. I will need budgeting within a few years, whether I go to college or simply go straight into the workforce. I will need it because I will have to balance several new expenses, including rent, water bills, and electricity. This is my biggest concern, as it seems to have the potential to ruin my everyday life if not handled.
As time goes on, you will find that your original budget has some slaws. Some areas of budget planning might be overestimated, and some areas might be underestimated. Some of the flaws in budget making, for instance, are unemployment because if a person gets unemployed he has to have a strict budget to follow. For example making home food and not going out because that will result him in debt. Some of the other flaws are increase in rent, increase in car insurance because of accidents occurring, credit card payments, groceries, and eating out with friends. All of these flaws can cause a person to be more in debt and cau...
As an accountant, I know the key to gaining control over personal finances requires a realistic budget be in place. A budget involves several important steps. First, total all sources of monthly income; second, prioritize expenses from most important to least like, mortgage, loans/cost, and automobile, utilities to cell phone and cable expenses. Finally, measure the monthly income versus total amount of expenses. If the monthly expenses are more than income received, this signifies living beyond one’s means. Most people should understand that “Budgeting, either by a formal or informal plan, is a first step in deciding what needs and wants must be meet and what resources are available” (Brown, 2007, p. 316). After all, conquering financial stability gives one the ability to control savings, as well. However, setting a budget is only the beginning of structuring finances. In order to uphold a budget one must stay focused on their needs instead of wants. This focus is often extremely difficult to gain or maintain.
I learned that school budgets not only inform us of priorities, but they can also serve as a communication tool for the whole district. I feel as if our school could use the budget as an opportunity to discuss progress as well as our strategic plan, but they don’t. Teachers and parents rarely hear about the budget’s educational and operational objectives and accomplishments. This is definitely something my school could improve on, since the school budget should reflect the community and their values. I also think there is a skewed public, and even faculty, perception regarding the school budget. Some of these views include that the school budget is wasteful, administrators are overpaid, administrators are not forward-thinking, and money is spent in the wrong areas. These adverse perceptions of the school budget are often heard during difficult economic times, such as when our school district recently went on fiscal distress. However, I have learned that without meaningful involvement of the community, educators, and staff, these perceptions will never
Budgeting is a process in which a person plans on how they are going to spend their money. This allows one to determine earlier whether they will have enough money to cater for their future expenses. Through budgeting one is able to prioritize their
It requires an adequate and sound organizational structure, that is, there must be a definite assignment of responsibility for each function of the enterprise. Budgeting compels all the members of management, from the top to bottom to participate in the establishment of goals and plans. Budgeting compels departmental managers to make plans in harmony with the other departments and of the entire enterprise. Budgeting helps the management to put down in figures what is necessary for a satisfactory performance. Budgeting helps the management to plan for the most economical use of labor, material and capital. Budgeting tends to remove the cloud of uncertainty that exists in many organizations, especially among lower levels of management, relative to basic policies and objectives. Budgeting promotes an understanding among members of management of their co-workers' problems. Budgeting force management to give adequate attention to the effects of general business conditions. Budgeting aids in obtaining bank credit as banks commonly require a projection of future operations and cash flows to support
The national budget is the main instrument through which governments collect resources from the economy, in a sufficient and appropriate manner; and allocate and use those resources responsively, efficiently and effectively (Todorovic & Djordjevic, 2009). The work of public budget has increased extremely more complicated, abstruse and worrying (Hou, 2006, p.730).