THE IMPACT OF BUDGETARY CONTROL ON THE PROFIT MARKETING PERFORMANCE OF ZENITH BANK PLC ENUGU
This study was undertaken to verify the impact of budgetary control on the profit marketing performance of Zenith Bank. The objective are focused on determining whether budgeting is an effective management tool in organizations whether budgetary control has contributed to the success and survival of organization as well as how organization handle their budgetary process successful organization were used as reference point in all situation. The choice of these organization was because they are primary constituencies that have shown a consistent increase in profits over the years in most cases for the past years hence used in this study as reference point. Careful and thorough analysis made revealed that organization that is survival conscious use budgeting as a management tool and this helped organization achieve their overall objectives. The study made the following key recommendations among others such it is imperative that various level of management understand the process through which budget preparation go and It is also important to involve subordinates in preparing divisional and departmental budgets as this ensure commitment.
TABLE OF CONTENTS
Title page - - - - - - - - - - i
Approval - - - - - - - - - - ii
Dedication - - - - - - - - - - iii
Acknowledgement - - - - - - - - iv
Abstract - - - - - - - - - - v
Table of content - - - - - - - - vi
CHAPTER ONE: INTRODUCTION
1.1 Background of the study - - - - - - 1
1.2 Statement of the problem- - - - - - 5
1.3 Objectives of the study - - - - - - 6
1.4 Scope and limitation of the study - - - - 7
CHAPTER TWO: LITERATURE REVIEW
2.1 Introduction - - - - - - - - 8
2.2 The concept, nature and objective of budgetary control 12
2.3 Budgetary control and management - - - - 16
2.4 Corporate and long range planning - - - - 17
2.5 Management by objective- - - - - - 18
2.6 Management by exception - - - - - - 20
2.7 Establishing a budgetary control system - - - - 21
2.8 Administration for budgetary control - - - - 25
2.9 Budgeting system - - - - - - - 27
Design Methodology- - - - - - - - 30
Data presentation and Analysis - - - - - - 34
CHAPTER FIVE: SUMMARY FINDINGS, RECOMMENDATION AND CONCLUSION
5.1 Summary Findings - - - - - - - 42
5.2 Conclusion - - - - - - - - 42
5.3 Recommendations - - - - - - - 44
Bibliography - - - - - - - - 48
1.1 BACKGROUND OF THE STUDY
Budgeting control is the process of ensuring the accomplishment of budgetary plans by applying the needed corrective measures to deviation i.e. moving away from the original plans it is also a process of assigning responsibilities for the achievement of budget targets measuring actual performance and comparing actual with planned performance budgetary control is therefore as essential as the making of budget.
All survival conscious organization both public and private have objectives or goals which they try to attain with resources available to them.
These objective or goals include survival in hostile and competitive business world.
Maximizing of profit as well as attaining a certificate level of societal responsibility to community in which they operate. Resources for the attainment of this objectives are limited hence the need for planning.
Planning in form of budgeting a budget is plan of action which an organization intends to execute within any given period it is not enough to make which cannot be achieved. Therefore, the achievement budgetary plans require control mechanism (Anthony, 2005).
Again, The term budgetary control in management studies implies the judicious allocation of limited resources available to a firm in the day to day management of the business which easily varnish from intensive competition because of wrong appropriation of resources.
Other factors which lead to liquidation of many small scale business unit are lack of finance, incompetence on the part of the entrepreneur and in adequate manner of approach to client of the business such as the government.
Owing to the above problems which has hindered (impaired) effective industrial take-off in this part of the world that this work is close be devoted to consider the issue of budgetary control is a way out.
A myriad (very greet number) of questions on why small-scale industries or business flop exit. The answers to such questions among others include the observation of some factors that were left considered by the proprietary and which border the progress of such business. To this wring location of this business often mention since that takes the business away from the actual concentration of the market. Also inter with wrong location, is scanty capital for the liquidity flow of the business one vital issue most often over looked is that wrong or inappropriate allocation of small scale business. It is later that work is aimed at considering especially the efficient way effective budgetary control would ameliorate that small scale industries in their day to day running of the firm. The giant stride made by Nigeria business men from trading mainly buying and selling to manufacturing is in many respect a step toward the direction of transformation Nigeria economy from a non-agricultural dependence to a vibrant technological one (Chadwick, 2011).
This process began in 1851 when the British colonial government took control of the area that has become a major Nigeria treading company Chiefly, the Royal Niger company. The expansion of trade was the primary instrument for carrying out their “Oval management in Nigeria” (tadi POA 1970), Nigeria and foreigners alike therefore were poised to develop the various sectors namely the industrial, commercial and agricultural sector which plays a vital role in the Nations economic development process.
The growing complexity of business has invariably contended with making planning as an indispensable tool for business success. In the past years when business system was still simple, social responsibilities and competition because almost Non-existent and it was only necessary to posses management flair and determination to successful exploit opportunity. The situation has now completely change with the automation (Methods and machines to save human labour) revolution of the sixties couple with the fast rate of technological change and business environment has equally witnessed repaid change. The demands being made on the business so many and varied and essentially that on business can ignore them and continue.
It is know fact that business has to harness in addition to all its resources, external forces such as legal restriction and obligation, social responsibilities change in population cum population structure and competition in the market. There is no production without a substitute as the market is general property, no single business concern has any exclusive right over it (Edward 2008) correctly put it that a business concern must have to “wage aware” Its own share of the market. It must strive to maintain the position and at the sometime purpose growth objective. As a matter of fact, when lost are raising one would expect revenue to rise also but unfortunately. Government intervention in the area of pricing makes it difficult, to increasing price in viz –a viz rising cost and in order to service the business must control its other controllable cost. This requires persistence and conscious effort. All the above problems make the situation a complex one that needs to be properly managed as argued by many scholars of management.
1.2 STATEMENT OF THE PROBLEM
The modern business world is characterized by intense competition, new product development, use of advance technology, diversification etc. all these are aimed at making success out of businesses.
But we know that not all business are successful. Some have collapsed. Others liquidated while others have been swallowed by stronger organization, and still many others have successfully weathered the hostile business environment.
Recently, some business organization in Nigeria i.e. banks have been listed as distressed while others are listed as healthy. Some manufacturing organization has ceased production while others are producing below installed capacity. The list is endless.
The question then is, why does some organization find it difficult to survive while others which operate under the same economic condition make huge profits does budgeting and budgetary control influence the survival of organizational?
This research is therefore aimed at determining the import of effective budgetary control on organizational survival using Zenith Bank plc. Zenith Bank plc is one of the few companies that has maintained a steady progress in its business activities its turnover as well as the profit figure on the increase for the past four years and business has been generally good for the company inspite of prevailing national economic problem. Relating him survival of the company to its budgetary control is the aim of this research.
1.3 OBJECTIVES OF THE STUDY
The objective associate with this study include:
vTo determine whether budgeting is an effective management tool in organizations
vTo determine whether budgetary control has contributed to the success and survival of most set ups.
vTo determine whether some organization would still have achieved success without effective budgetary control
vTo determine whether participatory budgeting aids effective budgetary control
vTo determine the impact of deviation from established budgets
vTo assess the relevance of management principles on budgetary control
vTo make recommendation on how to improve performance in organiztions.
1.4 SCOPE AND LIMITATION OF THE STUDY
Budgetary control measures shall be the focus of our study we may not present budget schedules as this is outside the scope of our study, but rather we shall present, state some problems encountered during the period of data collection.
Their was the problem of time to interview management and staff, time to visit various organization and time to re evaluate the responses to questionnaires.
All these time were not adequate hence time became a constraint. A study of this nature would require financial assistance from either the government or private bodies but since this was not possible the researcher utilized the limited resource available to him.
Some questionnaire administered on management and staff of the organization visited was not returned some were returned unanswered while some came back with incomplete answers. All these limited our sample size form what it was originally intended