CHAPTER ONE

1.0 INTRODUCTION

Business organizations need planning to achieve their aims and objective. It thorough planning in an organization cannot be done without involving the act of budgeting. The management has the purpose of providing a feed foreword process.

The concept of feedforward process is to provide each manager with guideline for making operation decision on a day to day basic. Budgeting deals with plans and monitoring activities to ascertain whether they conform to the plans. This is the control and coordination aspect of budgeting.

Manufacturing industries can only achieve profit maximization by proper planned use of available resource. This is sustained when different activities are efficiently coordinated, and decisions taken in the organization are result oriented. Business organization requires the use of some techniques in the formula and adoption of planned and defined system and tools with a view to achiever set goals. Such tools and systems include budgetary variance analysis and budgetary control. The process of setting goals to be achieve in the future time and determining how these goals are to be reached is described as PLANING, while the process of translating this planning into financial target can be described as BUDGETING.

Reg, H. Garrison, in his opinion, defined budget, thus, a budget is a detailed plan showing how resources will be require and used over some specify time interval. It repented a plan for the future expressed in a formal qualitative terms. The act of preperating a budget is called budgeting. The use of budget to control a firms activities is known as budgeting control .

1.1BACKGROUND OF THE STUDY

For any organization to operate meaningfully there has to be clear direction of where it is leading to or what it is aiming to achieve the standard of objectives and a means of monitoring derivatives from standard requires. These considerations can only be met through budgeting, planning as well as controlling.

A budget has been defined as a quantitative plan usually in monetary terms for the forth coming accounting year of the ensuring period. Budgeting planning/short term planning is the process of preparing detailed, short term usually 1 year plans for the function, activities and departments of the organization thus converting the long term cooperate plan into yearly action. Budgeting services as a very important tool for planning and control increase in productivity, in that budgeting aids planning for the future, if services as a control function through management by exception which is the assessment of performance for the purpose of controlling. It helps in cocoordinating of the work management in order to coordinate the activities of the organization.

1.2STATEMENT OF PROBLEM

Generally, organization whether manufacturing or service, required good budgeting for increasing productivity. Budgeting as a tool for planning and controlling does increase productivity. This is the problem of qualified personnel that are required for the purpose of preparation implementation and execution of budgeting, areas of responsibility will be decided by management and also budgeting pressure is another problem. The study will therefore be focused on whether budgeting contribute towards increasing productivity in organization or not.

1.3OBJECTIVES OF THE STUDY

In view of the glaring problems as mentioned above the researchers main purpose of this study is to look carefully as the system of budgeting. This will enable the researcher to discover and bring to light any loop hole and lapses that may contribute on their little ways to aggregate private sector problem. Therefore, the objectives of the study are as follows:

1.To examine the system of budgeting, planning and control in order to assess adequacy in productivity.

2.To find out the extent budgeting serves in planning and increasing productivity.

3.To examine facts about the organization and it mode of operation with regards to productivity.

4.To identify the fact about operation and mode of operation.

1.4SIGNIFICANCE OF THE STUDY

The significance of this study is essential on its benefit and contribution to individual and organization first and foremost. This study will serve as important objectives reference to top executive of organization who wants to achieve efficiency in production. It will also be significant to students who want to carry out further research on the area of study secondly, the finding of this study will be useful to both the organization and any other similar organization as well as general public in the field as it depicts the nature of problem associated with budgeting in this part of the country. Finally, this study will also cover the public as an essential requirement for the award of higher national diploma.

1.5 RESEARCH QUESTION

1.How does managers use budgeting in planning and control in author the goals of a business

2.How does decision making performed in a manufacturing industry using budgeting as a tool for planning and control

3.How has utilization of resources achieved with the use of budgeting and budgetary control

1.6SCOPE AND LIMITATIONS OF THE STUDY

This study covers only selected workers of vita foam plc within Aba branch, although they were still other workers in other branches in different state, but the research was restricted to Aba branch.

One of the major problems encountered in the course of this study was difficulty in obtaining data from the management body of the organization due to fear of disclosing their management strategies to competitors. Time constraints were also a problem in the course of this research work.

1.7ASSUMPTIONS OF THE STUDY

This will help us to understand that budgetary control should be precise in format and simple to understand. It should be flexible and not rigid in application.

This will hide inefficiencies instead of revealing them where a proper evaluation system is lacking.

Management should use budgetary control with intelligence and foresight along with other managerial techniques.

The adequacy of budgetary control, thus depend upon the adequacy of managerial judgment.