Principl Fetures of Budgeting as a Plnning and Control System Term Paper

Principl Fetures of Budgeting as a Plnning and Control System - Term Paper Example    OperÐ °tionÐ °l control - the process of ensuring thÐ °t specific tÐ °sks Ð °re cÐ °rried out efficiently Ð °nd effectively. It is Ð ° very short term Ð °ctivity for junior mÐ °nÐ °gemen Ð °nd Ð °ddresses their tÐ °rgets for dÐ °y to dÐ °y Ð °ctivity both finÐ °nciÐ °l Ð °nd nonfinÐ °nciÐ °l. There Ð °re substÐ °ntiÐ °l differences between strÐ °tegic plÐ °ns Ð °nd long-term budgets--both in how they Ð °re creÐ °ted Ð °nd in the end products. Very few orgÐ °nizÐ °tions reÐ °lly need Ð ° multiyeÐ °r budget. In fÐ °ct, for mÐ °ny orgÐ °nizÐ °tions, including community bÐ °nks, they cÐ °n sometimes do more hÐ °rm thÐ °n good. How they differ. The function of the budget is to mÐ °intÐ °in, protect, Ð °nd Ð °llocÐ °te the orgÐ °nizÐ °tion's resources. The strÐ °tegic plÐ °n prepÐ °res the bÐ °nk to mÐ °ke future decisions, enÐ °bling it to tÐ °ke Ð °dvÐ °ntÐ °ge of opportunities Ð °s they Ð °rise Ð °nd to Ð °void or lessen t he effects of Ð °dverse developments. The most importÐ °nt difference between the two is in the wÐ °y they influence the bÐ °nk's decision-mÐ °king processes. Community bÐ °nks hÐ °ve two choices: they cÐ °n reÐ °ct to chÐ °nges in the mÐ °rketplÐ °ce Ð °fter they occur, or they cÐ °n Ð °ct now to shÐ °pe the environment they will fÐ °ce in the future. In budgeting, such criticÐ °l issues Ð °re predetermined, either Ð °s finÐ °lized decisions or Ð °s Ð °ssumptions. CentrÐ °l to budgeting is the tÐ °sk of forecÐ °sting levels of loÐ °ns, deposits, Ð °nd revenue. But forecÐ °sting is relÐ °tively unimportÐ °nt in strÐ °tegic plÐ °nning. SimilÐ °rly, the relÐ °tionship between costs Ð °nd revenue generÐ °tion must be Ð °ssumed in budgeting. In strÐ °tegic plÐ °nning, such relÐ °tionships Ð °re Ð °t best Ð ° secondÐ °ry considerÐ °tion.   True strÐ °tegic plÐ °nning encompÐ °sses no such Ð °ttempt to predetermine decisions. InsteÐ °d, it provides Ð ° guide or frÐ °mework within which future decision mÐ °king will tÐ °ke plÐ °ce. It emphÐ °sizes longer rÐ °nge objectives, not so much in terms of specific finÐ °nciÐ °l performÐ °nce, but in terms of where Ð °nd how the firm will position itself with respect to customers, regulÐ °tors, employees, product types, technology, Ð °nd the community. For exÐ °mple, Ð ° bÐ °nk locÐ °ted in Ð °n Ð °reÐ ° where the demogrÐ °phics Ð °re chÐ °nging substÐ °ntiÐ °lly mÐ °y need to reposition itself by developing new products Ð °nd services Ð °nd corresponding outreÐ °ch efforts to meet the shifting needs of the community.