Human behavior and budgetary control, Managerial Accounting

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.

Posted Date: 12/7/2012 7:59:34 AM | Location : United States







Related Discussions:- Human behavior and budgetary control, Assignment Help, Ask Question on Human behavior and budgetary control, Get Answer, Expert's Help, Human behavior and budgetary control Discussions

Write discussion on Human behavior and budgetary control
Your posts are moderated
Related Questions
M/s ABC's present credit terms are 1/10 net 30 that they are planning to change to 2/10 net 30.  The current average collection period is 20 days and the variable cost to sales rat

Explain Zero bases budgeting According to David humdinger According to David humdinger, ZBB is a management tool which provides a systematic method for evaluating all operation

During the year the company worked a total of 145,900 machine-hours on all jobs and incurred actual manufacturing overhead costs of $1,305,346. What is the amount of underapplied o

Explain the Objectives of management accounting? 1. Planning and policy formulation: the object of management accounting is to supply necessary data to the management for fo

Attributes of good information 1) Information is anything that is communicated and is sometimes said to be processed data. It is data processed in such a way as to be of meaning

What story or character in a story generated what Aristotle calls a "catharsis?" Describe your emotional response. What specifically caused your emotional response?

Positioning An essential part of the planning process is positioning the organization to attain its goals. Positioning is a wide concept and depends on gathering and evaluating

Define the modes of Hybrid Instrument? 1. What are a variety of investment risks. Describe them. 2. Define the modes of Hybrid Instruments and clarify their features.

depreciation,depletion and amortisation

Determine the tyoes of Cost centre Cost centre can be of two kinds: 1. Impersonal cost centre: consisting of a location or item of equipment (or group of these) like machi