case study need for Budgeting

Jun 18th, 2015
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• One of the most effective tools for differentiating between manager performance and segment performance is the budget. Actual results compared against separate budgeted criteria for both manager and segment performance avoid any unfortunate evaluation of managers based on uncontrollable items. In addition, it may be more appropriate to judge manager performance against budgeted goals rather than against the performance of other managers or other segments. Also, the budgetary process makes it possible to treat each segment in its unique business situation and tends to avoid inappropriate comparisons among segments where situational factors make such comparisons invalid.  Justify the need for Budgeting  Suggest ways to make the budgeting process effective and meaningful

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CASE FOR DISCUSSIONOne of the most effective tools for differentiating between managerperformance and segment performance is the budget. Actual resultscompared against separate budgeted criteria for both manager andsegment performance avoid any unfortunate evaluation of managersbased on uncontrollable items. In addition, it may be more appropriateto judge manager performance against budgeted goals rather thanagainst the performance of other managers or other segments. Also,the budgetary process makes it possible to treat each segment in itsunique business situation and tends to avoid inappropriatecomparisons among segments where situational factors make suchcomparisons invalid. Justify the need for Budgeting Suggest ways to make the budgeting process effectiveand meaningfulThanks very much Robert. I wanted to present a very brief case study which is derived from ourcompany experiences in helping clients to deploy techniques to make forecasting and budgetreview a more effective process within their organisation.Budgeting is really part of at least two main processes within an organisation. The first (the loopon the left), is looking at the internal control of the organisation. This is a feedback loop which issaying that results happen, they get measured, they get analysed and then hopefully there's adialogue which ensues between the analysts and the line managers who are responsible forperformance. The result of this dialogue should be c

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