Behavioral Aspects of Profit Planning and Budgeting I.en - Id
Behavioral Aspects of Profit Planning and Budgeting I.en - Id
Behavioral Aspects of Profit Planning and Budgeting I.en - Id
pengantar
Budgets are managerial plans for expressed in financial terms. They are short-term
comprehensive profit plans that put managements objectives and goals into operation. They
are managerial tools that insure the attainment of organizational goal and provide the dollar-
and-cent guidelines for day-to-day operations.
The budget should reflect the additional advertising and promotion costs necessary to
sustain a larger sales force and the more generous commission structure that is meant to
motivate greater sales efforts. It should include cash flow estimates that take into account the
timing of cash collections from customers, the cash payments to suppliers, and anticipated
increases in various expanses.
1. Goal setting,
2. Implementation,
3. Control and performance evaluation.
1. Top management has to decide what the firms short range objectives are and what
strategies will be used to attain them.
2. Goals have to be set and resources allocated. Goals are the short-range quantification
of the objectives.
3. A comprehensive budget or profit plan has to be prepared then approved by top
management.
4. Finally, it is used to control cost and to pinpoint problem areas in the organization by
periodically comparing actual performance results to the budgets goals.
Goal-Setting Stage
The planning activity begins with the translation of board organizational objectivities
into specific activity goals. To develop realistic plans and create a work-able budget,
extensive interaction is require between the organizations line and staff managers. The
controller and director planning play key roles in this human process of budget making.
Realistic goals established through meaningful participation will favorably affect the
aspiration levels of managers and employees. Lack of participation, or mere lip service,
thereto, may result in a host of dysfunctional behavioral side effects. The major behavioral
concepts that impact the goal-setting phase of the planning process are participation,
congruence, and commitment.
Implementation Stage
After the budget has been implemented, it functions as a key element in the control system. It
becomes a yardstick against which actual performance is compared and it serves as the basis
for management by exception. It should be pointed out the management by exception does
not hold that only unfavorable variances need to be investigated. Rather, rather managers
should concern them self first with the unfavorable variances. Indeed, to maintain efficiency
in operations, both above- standard and substandard performances are to be recognized and
investigated. Unfavorable variance and substandard performance evaluation and variance
follow-up have a host of behavioral consequences, which, if not understood and controlled,
can negate the success of the whole planning and controlling process. Some possible
behavioral consequences include pressure, motivation, aspiration, and anxiety.
In later section, we will discuss who should provide decision inputs during the planning
stage, approve the plans, implement the budget, by responsible for the preparation of the
performance reports, evaluate the variances, and be responsible for suggesting immediate
remedial action.
The multiple function of the budget as a goal setting, control, and performance
evaluation mechanism may trigger numerous dysfunctional consequences such as distrust,
resistance, internal conflict, and other unwanted side effects.
Distrust
A budget consists of a set of specific goals. It is a source of pressure that can create
mistrust, hostility, and lead to declining performance. The reasons for distrust are based on
supervisor beliefs that:
Budgets tend to oversimplify or distort the real situation and fail to allow for
variation in external factors.
Budgets do not adequately reflect qualitative variables such as know how the labor
force, quality of materials, and efficiency of machinery.
Resistance
Although budgets are widely used and their benefits strongly supported, they are still
resisted by many organizational participants. One major reason for this is that budgets
foreshadow and bring about change, thereby threatening the status quo. The literature in the
social sciences, management, and organizational behavior fields has described the
phenomenon of employee resistance to change.
Another reason for budget resistance is that the budget process requires a great deal of
time and attention. Manager or supervisors might feel overly burdened with extensive
demands on their time and with other day-to-day responsibilities. Finally, many managers
and supervisors simply do not understand the intricacies of budgeting making.
Internal conflict
Internal conflict creates a competitive and hostile work environment. Conflict may
cause people to focus exclusively on their own departments needs rather than the needs of
the total organization. This situation renders goal congruence more difficult, it not
impossible, to achieve. It breeds resentments toward management and, by extension, to the
budget. To end the cycle, management must identify and diagnose the cause. Then, action to
relieve the internal conflict and restore harmonious and productive working relationships may
be initiated.
Budgets may produce other undesirable side effects. One of these is the information
of small, informal groups that work against the objectives of the budget. These employee
groups are usually formed to combat the internal conflict and the pressure that the budget
creates. Budgets are frequently perceived as managerial pressure devices. People feel
pressure when top management attempts to improve efficiency by obtaining more output
from given (or lower) levels of input.
Budget pressure is most acute for supervisors who are responsible for meeting
particular goals. Because supervisors are often unable to pass this responsibility to
subordinates, they resort to various dysfunctional actions, salah satu yang mendistorsi proses
pengukuran. Lain efek samping yang tidak diinginkan yang mungkin berkembang adalah
penekanan yang berlebihan pada kinerja departemen dan deemphasis pada kinerja organisasi
secara keseluruhan.
Manajemen terdidik dan tenaga kerja lebih mungkin untuk bekerja sama dalam
pembuatan anggaran dan rencana keuntungan. Tanpa anggaran pendidikan, kerja sama
tersebut kurang mungkin. Tidak peduli seberapa canggih teknik anggaran yang, Proses
anggaran mungkin menguras dana perusahaan kecuali potensi masalah dibahas terlebih
dahulu dan ditangani dengan tepat.
Sebelum kita bermakna dapat membahas konsep-konsep ilmu perilaku bahwa dampak
perencanaan atau proses pembuatan anggaran, perlu untuk memperkenalkan faktor yang
menyebabkan variasi dalam lingkungan perencanaan. Lingkungan perencanaan mengacu
pada struktur, proses, dan pola interaksi dalam lingkungan kerja. Organisasi ukuran dan
struktur, gaya kepemimpinan, jenis sistem kontrol, dan stabilitas lingkungan adalah beberapa
faktor yang mempengaruhi lingkungan kerja di mana perencanaan terjadi. Dengan demikian,
dalam satu lingkungan, tindakan tertentu oleh manajemen puncak dapat menyebabkan
menguntungkan perilaku dan anggaran hasil, sementara tindakan yang sama di lingkungan
yang berbeda dapat menyebabkan perilaku yang tidak diinginkan dan hasil anggaran
disfungsional.
The size and structure of an organizational influences human behavior and interaction
patterns in the goal-setting, implementation, and control and evaluation stages of planning
process. Organizational size affects the organizational structure.
Gaya kepemimpinan
Another factor affecting the planning environment is the external environment. This
includes the existing political and economic climate, availability of supplies, structures of the
industries that service the organization, the nature of competition, and so on. Frequent goal
and/or strategy adjustment may be necessary. In these instances, authoritarian leadership
styles have proven more efficient than democratic, participative styles.
CHAPTER 9
Behavioral Aspects of Profit Planning and Budgeting-II
During the goal-setting stage, top managements broad objectives are translates into
definite and measureable goals for the organization and for each of the major subunits (the
responsibility centers). It is important to keep in mind that people in the organization are
responsible for determining objectives and setting goals. People in the organization are also
responsible for achieving the objectives and goals. Thus, the goal setting phase of planning is
fraught with behavioral pitfalls.
Classical economic and management theories of the firm considered goals to be non-
problematic. Whether it was economic theorys single goal of profit maximization or
classical management theorys personal goals of the founders or entrepreneurs, goals were
considered given facts with which the organization had to deal. The question of how goals
were set was considered irrelevant and was of no interest to these early theorists. These views
were challenged in the early 1960s by modern organization theorists. Modern organization
theory assumes that organizational goals are varied and reflect decisions to commit the
organization to a particular course of action.
Goal Congruence
Participation
The depth (who should participate), scope (what kinds of decisions they
should participate in), and weight (the degree of participants power in the final decision)
participation in goal setting depends on organizational leadership styles, organizational
structure, the speed with which decisions have to be made, the expertise of the work force,
and the type of contribution they can make. Thus, organizations have to decide whether to
include middle managers, lower-level managers, supervisors, foremen, factory workers, or
office workers, in the budget-making process. Then the decision has to be made concerning
the budget activities in which these organizational members are to participate. Finally, top
management has to decide when to intervenes to settle disputes, to prod stagnating budget
discussions, or to announce that time is up and a decision must be made by the budget
participants.
In its broadest sense, participation is the essence of the democratic process and
is therefore unnatural when superimposed in an authoritarian organizational structure. Thus in
large, centrally managed bureaucratic organizations, participation in determining objectives
and setting goals will by definition be limited to a handful of top executives. However,
participation is not always successful. One reason is that people react differently to the
prospect of taking part in setting their own performance standards. Another reason is that no
serious attempts are make to insure the participation and cooperation of lower-level managers
and employees.
Even under the most ideal conditions, participation in goal setting has its
limitations. The process of participation gives managers power to establish the content of
their budget. This power may be used in a manner that has dysfunctional consequences for
the organization. For example, managers may build organizational slack into their budgets.
Slack is the difference between the resources that are actually necessary to efficiently
complete a task and the larger amount of resources that are earmarked for the task. In other
words, slack is budget padding. Managers create slack by underestimating revenues,
overestimating costs, or overstating the amount of inputs necessary to manufacture a unit of
output. They do this to provide a margin of safety for meeting the budgeted goals.
Pelaksanaan Tahap
Untuk membuat kerja anggaran, semua karyawan harus belajar melihat itu sebagai
kendaraan positif bagi tindakan organisasi dan sebagai perbaikan daripada beban atau
manajemen senjata. Tanpa pemahaman seperti itu, bahkan proses penganggaran yang paling
teknis canggih mungkin menjadi menguras dana perusahaan dan gagal untuk meningkatkan
efisiensi operasional.
Berkomunikasi Anggaran
Laporan kinerja
To maintain control over costs and to keep employees motivated toward goal
achievement, performance reports should be prepared and distributed at least monthly. The
importance of frequent communication of performance results have been repeatedly
demonstrated in empirical studies. The timely issuance of performance reports has a
reinforcing effect on employee morale. The lack of performance feedback, delays in
feedback, and infrequent or sporadic feedback have an extinguishing effect on morale and
performance. Lack of feedback was accompanied by low confidence and hostility.