BUDGETING: PERSPECTIVES FROM THE REAL WORLD

Budgeting: Perspectives from the Real World

Budgeting: Perspectives from the Real World

Section 1: Introduction

Which Article Did You Choose?

The article selected for analysis is Budgeting: Perspectives from the Real World by Karen Shastri and David E. Stout.

The Basis for Your Selection

There are several reasons for choosing this article. First, it relates to my field of interest. Second, it is widely cited due to the credibility of the authors. Third, it includes recent statistics. Fourth, it comprises of both qualitative and quantitative data which makes it easier to understand. Fifth, it provides complete information about the budgeting perspectives. The selection of this research was of the reason that we had to find the authenticity of the traditional theories that depict that budgeting is a factor influencing the other personal and organizational factors. (Robin Fraser, 2003, pp. 133-145)

Summarize the Rest of the Report

The below sections of the report consist of 5 sections, Section 1 provides introduction, while Section 2 gives a summary of the article, including the aims and objectives, main issues, methodology used and conclusions derived. Section 3 comprises of the critical evaluation, Section 4, provides the reflective views and Section 5 is the conclusion. (Shastri, 2008, pp. 113-120)

Section 2: Summary of the Article

Aims and Objective of the Article

The article comprises of the following aims and objectives:

To determine the modern methods of budgeting (for-profit) in organizations and discussing the descriptive features of the budgeting process that are being used today

To know how budgets are developed and how they were used for the planning and controlling purposes

To assess the value that budgeting adds to organizations

To evaluate the satisfaction of accounts and finance managers that budgeting plays in an organization

To find out the positive and negative consequences of primary behaviours by using budget methods

To evaluate the integrity of the relationship that exists between the management processes and budgets



What Are The Main Issues Highlighted In The Article?

Following are the issues that are being highlighted in this article:

Usually the goals that are set for budget are unrealistic

Managers lacking accountability

Problems that link strategic plan with the budget

Non-accounting managers who lack buy-in

Amount of ruffle built into the budgets apparently because of the reward system

Tendency of some managers to avoid their responsibilities in terms of budget preparations

Changes in the product mix during the budget phase

Changing costs during the budget period

Precision of budget estimates

Profit planning is insufficient

Lack of income in terms of time, staff, and a system to create the budget

Initial budget time is too time-consuming

Revising cycle time is very time-consuming

Failure to prioritize planning

The culture and politics of the organization

Lack of information and communication shared across the firm

Diversified geography and management

Organizations that creates conflicts in budgets

Limitations due to, market conditions, the regulatory environment, or economic changes

Methodology Applied

A primary research was carried out by circulating questionnaires via email among 29,501 members; who were among the managers and senior managers who were with the background of accounting. The data was gathered through convenience ...