An assessment of budget as a tool for effective control in the public sector (a case study of nema)

Thesis Overview

<p> </p><p><b>1.1 &nbsp; &nbsp; &nbsp;</b><b>INTRODUCTION</b></p><p><b>BACKGROUND OF THE STUDY</b></p><p>Traditional<br>budgeting has been criticized for a long time now for its inadequacy as a means<br>of management control. Criticisms concerning its inadequate practices in a<br>changing business environment emerged as early as the mid 1980’s with Johnson<br>and Kaplan (1987) seminal book relevance lost?</p><p>It<br>called also note from the work of Allen (1998). Who stated that the rapid<br>changes in today’s business environment renders a rigid approach to budgetary<br>control obsolete. It is no longer helpful in his anything up to 15 months<br>previously. He argues that amongst the requirements of a more appropriate<br>system, would be the building in of accountability to explain the differences<br>between actual and planned performance. This demands a more immediate time<br>frame of information reporting. Thus, there is a need to integrate strategic<br>management and budgeting. The works of C. Adams et al (200) called be pointed<br>to this regard. These author, conceptualized that to be effective, budgets must<br>aligned with the organization’s strategies, appropriate strategic planning, and<br>performance management process introduced, and must involve processes that are<br>value based, consequential and continuous.</p><p>The<br>work of Tim Blumentritt (2006) called be viewed as further contributions to the<br>above stand point as he recognizes the need for organizations to integrate<br>strategic management and budgeting. What seems rather unfortunate according to<br>Tim Blumetritt (2006) is the fact that most organizations still great the<br>budgeting and strategic management processes separately and also, a significant<br>portion of small and medium sized enterprises do not engage in strategic<br>planning (Tim Blunetritt 2006, p 74).</p><p>Hence,<br>the reason for this research work which is to investigate the question; “what<br>is the budgeting practice in Nigerian manufacturing company?” The motivation<br>for this study also comes from the work of Herath and Indrani (2007) who<br>investigated on the “roles of Budgetary Control System (BCS) as a component of<br>the Management Control System (MCS) in creating and sustaining competitive<br>advantage” and came up with a positive conclusion. They concluded that though<br>BCS called play a leading role in establishing an efficient MCS for creating a<br>sustainable competitive advantage, budgeting will not function in isolation (P<br>79). “Instead, it can be used more effectively oriented knowledge enterprise”<br>(Herath and Indrani; 2007, P179)</p><p>The<br>choice of National Emergency Agency (NEMA) <br>is related to the fact that it is a manufacturing company in a very<br>competitive industry and lots of challenges faces Nigerian manufacturing<br>companies as they struggle with economic depression and high inflation<br>resulting form IMF world bank led structural adjustment plan (SAP) implemented<br>by the Nigerian government. These programs were initiated to promote the<br>liberalization of the domestic economy, operations efficiency, productivity<br>growth, privately owned enterprises development, economic growth, trade and<br>investment. The economic liberalization policies have nurtured on upon economy<br>and have minimized the hurdles that the manufacturing companies need to clear<br>in order to obtain raw materials and inputs, and other resources for productive<br>activities. However, it has created an unprecedented change in their business<br>environment through increased competition both in the domestic market and from<br>need to development and implement a well conceived strategic plan is order to<br>be competitive in the business environment.</p><p><b>1.2 &nbsp; &nbsp; &nbsp;</b><b>&nbsp;Statement of the Problem</b></p><p>Nomatter ho well a plan is organized, it<br>cannot produce results on its own, thereby the need for control strategy<br>through budgeting practices to check compliance and excesses with particular<br>reference to National Emergency Agency (NEMA) . What is the budgeting practice<br>in the Nigerian manufacturing companies?</p><p><b>1.3 &nbsp; &nbsp; &nbsp;</b><b>Objectives of the Study</b></p><p>The<br>aim of this study is to investigate the management control practice (budget<br>being the tool for management control) in National Emergency Agency (NEMA). The<br>objectives of this study include the following:</p><p>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<br>i. &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; <br>To examine the present system of<br>budgeting being practiced in National Emergency Agency (NEMA) .</p><p>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; <br>ii. &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; <br>To examine how budgeting and control<br>system effectively put to use in order to enhance the accomplishment of the<br>organizational set goals and objectives.</p><p>&nbsp; &nbsp; &nbsp; &nbsp; <br>iii. &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; <br>To highlight some of the problems that<br>militates against better performance.</p><p><b>1.4 &nbsp; &nbsp; &nbsp;</b><b>Research Questions</b></p><p>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<br>i. &nbsp; &nbsp; &nbsp; <br>What is the present system of budgeting<br>being practiced in National Emergency Agency (NEMA) .</p><p>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; <br>ii. &nbsp; &nbsp; &nbsp; <br>How is budgeting and control system<br>effectively used in order to enhance the accomplishment of organization goal<br>and objectives.</p><p>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; <br>iii. &nbsp; &nbsp; &nbsp; <br>What are the problems that militate<br>against better performance.</p><p><b>1.5 &nbsp; &nbsp; &nbsp;</b><b>Significance of the Study</b></p><p>The<br>target groups of this study are managers, business practionners and scholars in<br>the field of business management. This will enhance a deeper knowledge about<br>how better a management control would be if its essential tools are well<br>integrated.</p><p><b>1.6 &nbsp; &nbsp; &nbsp;</b><b>Scope and Limitation of the Study</b></p><p>The<br>scope of this study is limited to the 2005 – 2010 budgeting periods of National<br>Emergency Agency (NEMA) . The estimates of both revenue and expenditure of the<br>above years will be examined. The process of budget preparation, control,<br>management control, implementation and review will be covered by the study.</p><p><b>Limitation of the Study</b></p><p>The<br>study is limited to National Emergency Agency (NEMA). Kaduna and if they are<br>applying the concepts of budgeting in their operations and how well. As the<br>organization under consideration is a manufacturing firm having to contend with<br>competition, we cannot justify the credibility of all information to be used for<br>the study.</p> <br><p></p>