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IMPACT OF BUDGETING, PLANNING AND
CONTROL ON THE PROFITABILITY OF A MANUFACTURING COMPANY
CHAPTER ONE
INTRODUCTION
1.1.
Background of the Study
For any
organization to operate meaningfully there has to be clear direction of where
it is leading to or what it is aiming to achieve the standard of objectives and
a means of monitoring derivatives from standard requires. These considerations
can only be met through budgeting, planning as well as controlling.
A budget has been defined as a quantitative
plan usually in monetary terms for the forth coming accounting year of the
ensuring period. Budgeting planning/short term planning is the process of preparing
detailed, short term (usually 1 year) plans for the function, activities and
departments of the organization thus converting the long term co-operate plan
into yearly action. Budgeting services as a very important tool for planning
and control increase in productivity, in that budgeting aids planning for the
future, if services as a control function through management by exception which
is the assessment of performance for the purpose of controlling. It helps in
co-coordinating of the work management in order to coordinate the activities of
the organization.
1.2.
Statement of Problem
Generally,
organization whether manufacturing or service, required good budgeting for
increasing productivity. Budgeting as a tool for planning and controlling does
increase productivity. This is the problem of qualified personnel that are
required for the purpose of preparation implementation and execution of
budgeting, areas of responsibility will be decided by management and also
budgeting pressure is another problem. The study will therefore be focused on
whether budgeting contribute towards increasing productivity in organization or
not.
1.3.
Objectives of the Study
In view of
the glaring problems as mentioned above the researchers main purpose of this
study is to look carefully as the system of budgeting. This will enable the
researcher to discover and bring to light any loop hole and lapses that may
contribute on their little ways to aggregate private sector problem. Therefore,
the objectives of the study are as follows:
To examine
the system of budgeting, planning and control in order to assess adequacy in
productivity.
To find out
the extent budgeting serves in planning and increasing productivity.
To examine
facts about the organization and it mode of operation with regards to
productivity.
To identify
the fact about operation and mode of operation.
1.4.
Significance of the Study
The
significance of this study is essential on its benefit and contribution to
individual and organization first and foremost. This study will serve as
important objectives reference to top executive of organization who wants to
achieve efficiency in production. It will also be significant to students who
want to carry out further research on the area of study secondly, the finding of
this study will be useful to both the organization and any other similar
organization as well as general public in the field as it depicts the nature of
problem associated with budgeting in this part of the country. Finally, this
study will also cover the public as an essential requirement for the award of
higher national diploma
1.5.
Research questions
What is the
system of budgeting, planning and control?
To what
extent does budgeting serves in planning and increasing productivity?
What are the
facts about the organization and it mode of operation with regards to
productivity?
What is the
fact about operation and mode of operation?
1.6.
Research Hypothesis
H0:
budgeting planning and control does not influence the productivity of an
organization
H1:
budgeting planning and control influences the productivity of an organization
1.7. Scope
of the study
This study
is on the impact of budgeting, planning and control on the profitability of an
organization with Nigerian breweries Lagos serving as the case study.
1.8.
Limitation of the study
The study
limitation was inability of management to divulge certain information which
they consider sensitive and fear of publication which might be detrimental to
their operation.
Distance and its attendant cost of travel in
order to obtain information which to write this study was also a major
limitation. Another limitation to the study is short time factor which did not
give time for thorough research work, hence gathering adequate information
becomes very difficult.
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