BUDGETING AS A TOOL FOR PLANNING AND CONTROL IN A MANUFACTURING INDUSTRY (A CASE STUDY OF NIGERIAN BREWERIES PLC ENUGU)
This research work was focused on investigation on the use of budgeting as a tool for planning and control in topical manufacturing industry like Nigerian breweries plc, Enugu.
The objective of the study is to show the important of budgeting as a tool for planning and control in operation of a manufacture industry which has profit maximization as its principal objective. The research also aims at identifying the procedures adopted in the formulation of annual budgets of Nigerian Breweries plc.
Based on this, the following hypothesis was formulated for the study. The hypothesis include:
(1) Managers use budgeting as a tool for planning and control in attaining the goals of the business.
(2) Decision-making is performed in a manufacturing industry using budgeting.
(3) Utilization of resource is achieved with the use of budgeting and
2.0 LITERATURE REVIEW OF BUDGETING AS A TOOL FOR PLANNING AND CONTROL IN A MANUFACTURING INDUSTRY
2.1 Definition of budget
2.2 Features and functions of budget
2.3 Preparation of budget
2.4 Type and methods of budget
2.5 problems associated with budget
2.6 planning function in an organization
2.7controlling function in an organization
2.8 Budgetary control and analysis of variance
3.0 RESEACH METHODOLOGY oOF BUDGETING AS A TOOL FOR PLANNING AND CONTROL IN A MANUFACTURING INDUSTRY
3.1 research design
3.2 Source of data
3.3 sampling and sample size
3.4 method of data analysis
3.5 problem of data collection.
4.0 DATA PRESENTATION, ANALYSIS AND INTERPRESENTATION OF BUDGETING AS A TOOL FOR PLANNING AND CONTROL IN A MANUFACTURING INDUSTRY
4.1 Analysis of data
4.2 Hypothesis testing
5.0 SUMMARY, CONCLUSING AND RECOMMENDATION OF BUDGETING AS A TOOL FOR PLANNING AND CONTROL IN A MANUFACTURING INDUSTRY
5.1 Summary of findings
Additional finding include the embarrassment of efficiency and effectives of the organization operation through the application of budgeting. It was discover that budgeting as a tool for planning and control and helped the management of Nigeria Breweries plc Enugu to achieve utilization of resource. This could be seen from table 4.1.3 management is able to determined product emphasize on and those to de-emphasize. The technique had also helped the management to control cost when the company had no direction influence on the price of its products.
Moreover, the researcher discovered that organization uses budgeting in its decision making, through, it encounters problems implementation of the organization’s decision these problem had been reasonable taken care of in table 4.1.7
These problems includes:
(a) Problem of ensuring the involvement of managers
(b) Lack of proper understanding of the system by managers
(c) Uncertainties etc.
Solution to these problems were stated in table 4.8 and includes:
(a) Implementation of budget.
(b) Ensuring greater involvement of managers.
(c) Highlighting the gains of working in line with the budget.
It was also discovered that in spite of the economic recession in Nigeria, the company not only survived in the business, that had undertone long-term planning to over come these problems. The problems of shortage of raw materials lack of foreign exchange, non-availability of spare parts. This point was contained in table 4.11.5. The organization had taken some position step and has overcome the problems.
It was further discovered from oral interview that no adequate information of full participation is granted to some of the subordinates during the primary planning of the departmental estimate, hence, then are not motivated towards achieving the goals of the business. As a result of this point, some workers view this technique of planning and control as pressuring instrument rather than a produce for only assisting the management in achieving the desired goals of the organization.
Budgeting as a tool for planning and control is powerful and indispensable tools that help management to achieve the objection of the business (profit maximization).
The analysis of data collected showed that 90% of the respondents of are highly in support of the importance of budgeting as a tool for planning and control in enhancing the profitability and growth of Nigeria Breweries plc. Budgeting aids management to be well structured in sustaining the growth and expansions of the organization.
As a follow-up to the finding that have been enumerated, the researcher wishes to making some recommendation as follows:
(a) For proper budgetary control purpose, worker should be made known the objectives of the organization and subordinates’ opinion should be sought in preparations departmental or firm’s budget estimates. This would inculcate in them a sense of recognized of their competence and important by the management.
(b) For long-term planning, it is recommended the management should supplement budgeting with long run technique such as profit evaluation technique.
(c) The company should integrate long-rang plan short-rang plan, capital investment plans with in its budgeting and also contingency plans with appropriate monitoring and control system.
(d) The manegment of Nigerian breweries plc must display its total commitment to the success of achieving the goals of the company by carefully executing the company’s budget. From conception till expiration and succession with new one.
(e) management must be well structured organizationally in order to make planning techniques very effective.
(f) Recruitment policy of the organization must take into consideration the need for specialist in operation reseach, management science.
(g)profit maximization must always be the corporate objectives of the Breweries and must be determined realistically and objectively.