Effect of Budgeting on the organization Performance

By

ImanIdrees Al-kharousi 70121091 Joukhah Muneer Al-Suliemani 70121019 Khulud Sulaiman Al-bulushi 11so8110
Senior Project Research Paper Submitted To Business Studies Department Of The Higher College Of Technology In Partial Fulfillment Of The Requirements For The Bachelor's Degree In Accounting In Year 2013. Project approved by : Dr. Munawar Hameed

Research objectives: 1.Main objective 2.Specific Objectives

Outline Of project

What is a budget?
Budgets are summaries of short-term operational activities of a firm. A production budget to plan its production levels. Budgets are quantitative representations. A budget is a quantitative statement, for a defined period of time, which may include planned revenue, expenses, assets, liabilities and cash flows

Purpose of preparing budget

Planning Coordination Communication Motivation Performance Evaluation

Performance Budgeting
Shifts budgeting from decisions on inputs to decisions on outputs or outcomes No standard definition of performance budgeting Some governments define performance budgets as budgets that contain information on actual or estimated results

Performance Budgeting
cont

Others define performance budgeting as budgets in which increments in resources are linked to increments in results In the broad definition, performance budgeting is only an analytic tool In the strict definition, performance budgeting serves as a decision rule

Performance budget process integrates budgeting, planning, and performance measurement

Strategic Planning
Performance Measurement Budget Development

Literature Review:
Hypothesis 1: The higher the successful budgeting application: a)
planning effectiveness, b) efficient controlling, and c) promoting coordination and communication is, the more likely that the organizations will gain greater organization success.

Hypothesis 2: The higher the performance evaluation effectiveness is, the

more likely that the organizations will gain greater organization success.

Hypothesis 3: Employee commitment will be positively related to

managerial performance.

Hypothesis 4: Participation budgeting process will be positively related

to (a) accounting information reliability, (b) decision making effectiveness, (c) employee commitment, and (d) managerial performance.

Hypothesis 5: Solve problems in budgeting performance evaluation.

Research methodology: 1.Primary data collection: (Questionnaire, Interview) 2.Secondary data collection

Findings and Analysis:

Do you achieve the settled budget?
No
53%

Are you involved in budgeting process?

No, 44% Yes, 56%

Yes
47%

Did the budget cost equal to the achieved?

Do you get the full procedure have to achieve the settled budget?
No 18%

71%

29%

Yes 82%

Yes

No

Do you get bonus if you achieve the settled budget?

Does settled budget affect your performance at work?

68%

71%

32%
29%
No No Yes Yes

1. Give your opinion about successful budget? 2. What are the reasons for more or less budget?

3. What are the difficulties in achieving settled budget?

Interview part:

In the interview part, we doing interview in four organizations to achieve our objective in this project and make more knowledge of how the organizations achieve budgeting performance. We make summarize of this interview and take sample of data of budgeting in this organizations, name of this organizations are: 1. Oman United Insurance Company (SAOG) 2. Oman Flour Mills Co. (SAOG) 3. Al Nazih united 4. Al-Ahli Bank

Conclusion

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