This topic is budgeting and control. We will explore budgets and the principles to building a budget.
Alternative views to budgets will also be considered, such as eliminating the budget. This is a radical approach however some organizations have found that budgets are not useful for future sensing organizations.
The balance scorecard and performance measurement will be discussed to help determine whether a business is doing well. It has been developed to give a balanced perspective of the various parts of the organization that contribute to its long term wellbeing. It has become a useful tool for many organizations in the profit sector and non-profit sector.
Topic 8: Budgeting and Control
After studying this topic students will be able to:
Explain the importance of budgeting and control processes in achieving the organisation’s goals, including the role of the planning and control cycle;
Identify the strategic and operational purposes for budgeting;
Describe budgeting process, including the role of the profit, cash and ROE wheels;
Outline the behavioural issues associated with budgeting;
Describe the major features of budgets and control systems;
Explain how diagnostic control systems work;
Explain the role of beliefs systems, boundary systems and interactive control systems;
Describe interactive control systems and explain the contribution that they can make to the development of strategies; and
Explain how the balanced scorecard can be used for measuring performance (and strategic management).
