Reference no: EM132800320

Question 1.

A business needs to have both a strategic plan and a budget. The strategic plan lays out the direction and goals of the business and guidelines for actions to achieve those goals, while the budget looks at the money needed to support achieving those goals. Budgeting is only one part of the strategic planning process (Carol, 2021). There are four types of responsibility centers:

Cost Center - The majority of managers are responsible for cost centers. Revenue Center - While revenue is a major factor for most businesses, revenue centers are actually the smallest portion of responsibility centers. Profit Center - These responsibility centers are also quite common. Investment Center - While we spend a lot of time discussing profit, asset management is just as important. In short, a responsibility center is an organization unit for which a manager is held accountable. A responsibility center is like a small business, and its manager is asked to run that small business to achieve the objectives of the larger organization (Putra, 2012). According to the video The Importance and Use of Budgets within an Organization, a budget is a detailed financial plan that quantifies future expectations and actions relative to acquiring and using resources. It is imperative that organizations carefully plan their financial affairs to achieve financial success.

Question 2.

Regarding my past career, the financial budget was constructed with strategy and planning on how to achieve the end result. Budgeting revenue numbers is mostly a "targeted" attempt to guesstimate based on trends, external and internal happening (Datar, 2014).

In thinking about the managerial area of responsibility: a cost center that focuses on only keeping costs in line like the maintenance area, the customer focused area deals with revenue but usually deals with costs too which makes it a profit center or the investment area that deals with investments, revenues and costs (Datar, 2014). Yes, a manager of any of these areas of responsibility is concerned with their focus which in turn would motivate their direct reports to also focus on those costs, sales and profits (Datar, 2014). Whatever is generally measured gets the attention. Thus, if a manager's evaluation is majorly tied to their financial numbers it can negatively impact their behaviors. In my humble opinion and referenced in the textbook, the total focus on financial numbers never tells the entire story (Datar, 2014).

In every evaluation that I was given plus gave in my past career the financial numbers were a part of the story, but controllability behaviors and strategy by the manager was part of the process as well. Now I know that this is described as responsibility accounting (Datar, 2014). To gather that knowledge about past performance upper management has to reply on numbers within the control of the manager but how they work with their direct reports on sales, training, repair, coaching or whatever was in their area of responsibility. Part of the issue with too much focus on direct reports was again whatever they were measured on would be their focus. Tying all the departments together works to support the entire process of building revenue, controlling costs and creating profits. This is the positive part of creating responsibility.

Question 3.

Strategy, plans, and budgets have a significant impact on each other and I disagree that they are unrelated. Datar and Rajan (2014) define budget as "the quantitative expression of a proposed plan of action by management for a specified period and an aid to coordinating what needs to be done to implement that plan" [Slide 5]. Budgets can change how plans and strategies are created and implemented and vice versa. When a manager and business budget, it will help them in evaluating how well their strategies and plans are doing. When budgeting occurs, general and broad plans for a business become more specific and action-oriented. "The strategic plan lays out the direction and goals of the business and guidelines for actions to achieve those goals, while the budget looks at the money needed to support achieving those goals" (Wiley, n.d., para 1). For some, budgeting may be a "section" of the strategic planning and plays a role in the bigger picture. Budgeting has advantages including [Slide 13]:

· Promoting coordination and communication among subunits within company

· Provides framework for judging performance

· Motivates managers and employees

A manager's decisions and choices on the type of responsibility center greatly affects the behavior of employees. First off, responsibility centers are "a part, segment, or subunit of an organization whose manager is accountable for a specified set of activities" (Datar and Rajan, 2014, p. 505). When a manager is in charge of one of the four centers such as cost, it will impact how employees perform and behave. As a manager is required to budget, less time, resources, and pay may go to their employees. A manager may take out the frustration on employees through possibly laying off employees, yelling at them, or degrading their pay. Also, when company performance is not at an expected level, a manager may have to work their employees harder or longer. It is important that managers are able to budget at an efficient level so that employees are impacted positively and the company is benefiting from the budget and strategic planning.

Jensen (n.d.) provides an explanation on the influence of budget on employees which can possibly include producing teamwork, competition, fear, and resentment.

Question 4.

Assistant manager in dental office

What do you intend to learn, acquire and clarify through this internship? Try to use concrete, measurable terms in listing your learning objectives under each of the following categories:

1. Knowledge and Understanding

2. Skills

Learning Activities: How will your internship activities enable you to acquire the knowledge/understanding, and skills you listed above?

- At your internship: Describe how your internship activities will enable you to meet your learning objectives. Include projects, research, report writing, conversations, etc., which you will do while working, relating them to what you intend to learn.

- In the class: Course activities or cases that you think will support your learning objectives

Evaluation: What evaluation methods will you use to provide key insight into the achievement of your learning objectives? You will have a written evaluation from your supervisor but list other assessment tools; internship journal, work projects, informational interview summary, final presentation.