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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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