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The attitudes and behaviour characteristic of a particular social group

This definition gets to the heart of what can make the difference between a succeeding or a failing business, particularly when considering the preparation and operation of the budgetary process.

We shall look at several examples of budget instructions or memos as a means of illustrating the issue of being aware of what may be an appropriate culture for the business you manage.

For each example you will be asked to score the budget process - how easy or tough it is - from your perception:

1 = There are budgets somewhere.

2 = We have budgets and we look at them and actuals.

3 = We have budgets which we review and we suggest corrective

actions for over- or under-spends.

4 = We have budgets which we review and we suggest corrective

actions for over- or under-spends - the effect of the action is sometimes followed up.

5 = NO 5s allowed.

6 = We have budgets which we review and we suggest corrective

actions for over- or under-spends - the effect of the action is always followed up.

7 = We always follow up corrective action and question non-delivery

- the responsible budget holder is questioned.

8 = We always follow up corrective action and question non-delivery

- the responsible budget holder is held to account, and ineffective response may be noted in personnel appraisal reports.

9 = We always follow up corrective action and question non-delivery - the responsible budget holder is held responsible, and ineffective response will be noted in personnel appraisal reports. Repeated ineffective budgeting and response is not tolerated.

Below are three examples: you could score them using the above scale.

Example A - XYZ pic

MEMO

From _

To _ Date _

Subject

Customer Service Department Budget Preparation year to 31 December Budget objectives

Principal: to achieve a return on investment of 14 per cent minimum Subsidiary:

to increase sales (higher margin servicing) by 12 per cent;

to maintain operating costs at today's level - an effective decrease in operating costs per service hour of 11 per cent.

Constraint: average response time to be maintained at no less than 120mins - at present, the average response time is 112mins.

This minimum return is 2 per cent higher than that achieved to date, but can be achieved by increasing sales of higher-margin work and controlling costs as explained and discussed at the department meeting of_.

Commentary

- Overall objectives and thus goals are clear.

- Constraints are considered.

- More detail is required.

 
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