Tile: Examining the Behavi oral Aspects of Budgeting with particularemphasis on Public Sector/Service Budgets
The nature of budgeting is to achieve objectives of the organization regar dless of whether smallor large (Drake Peterson Pamela, Pamela, & Peterson, 2010) . The budget has its own goals and objectives with both emphasis the organization revenue andcosts forecasting if the budget is a systematically planned it will be more easy for strategicdecisions which enables their locations to be used efficiently and ef fectively in order to achieveorganizational targets.
These achievements have benefits of cost awareness and resourceallocations. (Jr. Bierman 2010; and Bonner 2008). Problem StatementNevertheless, it is trusted that there are both technical and behavior al aspects to budgetingthat can assist all firms if properly understood and directed. Campbell (1985).
The practical component of budgeting contacts with a mathematical computation ofprojected costs and expenses and has been heavily emphasized in the pub lic sector. Thebehavioral part however focuses on the ability to achieve the technical aspect of budgetingwith the use of people.
Hopwood (1974), Redman and Wilkinson (2009). The achievement of organizational control depends upon the actions of top management andtheir appreciation of the importance of sound interpersonal relationships between differentlevels of the hierarchy.
The reward gained on achieving the required budget level isimportant for motivating lower level managers and employees . Man agement accountantsthrough the budget process can motivate employees and improve attitudes amongstmanagers towards budgetary control.
Consequently, the management style, culture andattitude towards employees will determine the approach to budgeting with in theorganization. (Otley 1977; Shah 2007; and Robinson 2007).
a. As h aving narrowed the data to this article I found that the true object of this article isthat this article focuses on the crucial role of the behavioral aspects of budgeting andhow an understanding of its importance can contribute to a successful budgetingprocessb.
It analyses the budgeting process and describes the nature of budgeting inorganizations. c. The paper describes the impact budgeting has on hu man behavior such as motivationand dysfunctional behavior and shows why budgeting is important to firms.
In the literature review, there was general agreement in many areas of how the process mightsuccessfully assist but it was found that there was no perfect means of ensuring a successful budgeting process .
As with most concepts, there were mixed opinions on some issues such asbenefits of participation as opposed to non -participation. What was common is the view thatthe budgeting process in particular and management control systems in general cannot affordto ignore the impact of behavior on these processes.
The public sector budgeting process is analyzed ; finally, the behavioral aspects of the budgetingproc ess are also examined, focusing on the need to tackle Beyond Budgeting issues in thiscentury whereby organizations budget without a budget.
Every time , organizations tend to expect results from budgetary control and fail torecognize that most problems of budgeting are behavioral. ? Where there is reason for dysfunctional behavior, pressures are created leading todoubt , hostility and actions detrimental to the long -term prospects of an organization .
Therefore , every budgeting system must be tailor -made and its success should bemeasured by the extent to whi ch it provides the necessary motivation for individualsto make their extreme contribution to the achievement of organization goals.
The conduct aspects of budgeting are significant and the management accountant hasa responsibility to minimize the behavio ral problems within the accounting systemsfor control.
Management accountants must recognize that accounting techniques andhuman relations are complicated bound with each other. It follows that managementaccountants should work more closely with behavioral scientists to gain anunderstanding of the essential role that human behavior plays in successful budgetuse.
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