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PROJECT TOPIC AND MATERIAL ON BUDGETARY CONTROL IN THE MARKETING AND MANUFACTURING ORGANIZATION
The Project File Details
- Name: Budgetary Control In The Marketing And Manufacturing Organization
- Type: PDF and MS Word (DOC)
- Size: [70 KB]
- Length:  Pages
1.1 BACKGROUND OF STUDY
Whenever the demand for factors of production is greater than the supply, some method of apportioning them among different uses has to be employed and this brought the need for budgeting and control. In a perfect competition, they would be distributed among different employments according to the demand for them, equilibrium being achieved when the marginal productivity of each was the same in all occupations (J.L.Hanson, 1977).
Budgeting being the single most important decision making process can therefore be considered an important part of the classic management cycle of planning, action and control or more specifically, as part of a total management system that includes: –
– strategy formulation and implementation
– planning systems
– budgeting systems
– production/marketing systems
– control/reporting systems.
As long ago as 1931, the Macmillan Committee on Finance and
Industry recommended control of investment. To support his policy of full employment, lord Beverage suggested that since investment was easier to control than saving, the two should be brought into line by imposing control over investment. Since investment cannot exist without budget and implementation, there became the need for budgetary control rather than investment control (Ifeanyi .A. Arji, 1997).
1.2 STATEMENT OF PROBLEM
A striking feature of large corporations is that the owners
(Stockholders) are usually not directly involved in making business decision, particularly on a day to day basis. Instead, the company (corporation) employs mangers to represent owner’s interests and make decision on their behalf. The financial manager acts in the best interests of the shareholders by making decisions that increase the value of the stock. The appropriate goal for the financial manager, who is in charge of budget and budgetary control of the corporation can therefore be stated easily; the goal of the management or the manufacturer is to maximize the current value per share of existing stock for profit making entities and for none profit making businesses, to maximize the market values fo the owners equity.