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Human behavior and budgetary control
An important feature of control in business is that control is exercised by managers over people. Their attitudes and response to budgetary planning and control will affect the way in which it operates.
In 1953 Chris Argyris identified the following four perspectives of budgetary control:
The budgets are seen as a pressure device used by management to force lazy employees to work harder. The purpose of such pressure is to enhance performance but the unfavorable reaction of sub-ordinates against it seems to be at the core of the budget problem.
Budget men desire to see failure. The accounting department is usually responsible for recording actual achievements and comparing this against a budget. Accountants are therefore budget men and their success is to find significant adverse variances and identify the managers responsible. The success of a budget man is the failure of another manager and this failure causes loss of interest and declining performance.
The accountant, on the other hand, fearful of having his budget criticized by management deliberately makes it hard to understand.
Target and goal congruence. The budget generally sets targets for each department. Achieving the departmental targets becomes of paramount importance regardless of the effect this may have on other departments and the overall company performance. This is the problem of goal congruence.
Management style. Budgets are used by managers to express their character and patterns of leadership on sub-ordinates. Sub-ordinates resentful of their leader’s styles blame the budget rather than the leader.
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QUESTION 1: Part A What are the main components of a set of Financial Statements and what are their respective purposes? Part B Trial balances of Hans Ltd on 30 Ju
Once the credit information is accumulated the subsequent step is to analyze the gathered information and isolate those matters that may need further investigation. The factors whi
Illustration: ABC analysis Combine items on the basis of their relative value to form three categories—A, B and C. The data in the table below illustrates the ABC analysis.
do you make assignments on Advance Accounting subjects
Discuss the different roles played by the qualitative and quantitative approaches to managerial decision making
School problem is asking to calculate the work in progress inventory for the beginning of a month without providing previous month data.
Advantages and Disadvantages
Gather data concerning the relationship among the dependent and independent variables Collecting data is generally the most hard and time-consuming element of CER development.
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