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

Principl Fetures of Budgeting as a Plnning and Control System - Term Paper ExampleOpertionl control - the process of ensuring tht specific tsks re crried out efficiently nd effectively. It is very short term ctivity for junior mngemen nd ddresses their trgets for dy to dy ctivity both finncil nd nonfinncil. There re substntil discrepancys between strtegic plns nd long-term budgets--both in how they re creted nd in the end products. Very few orgniztions relly need multiyer budget. In fct, for mny orgniztions, including community bnks, they cn sometimes do more hrm thn good. How they differ. The function of the budget is to mintin, protect, nd llocte the orgniztions resources. The strtegic pln prepres the bnk to mke future decisions, enbling it to tke dvntge of opportunities s they rise nd to void or lessen the effects of dverse developments. The most importnt difference between the two is in the wy they influence the bnks decision-mking processes. Community bnks hve two choices th ey cn rect to chnges in the mrketplce fter they occur, or they cn ct now to shpe the environment they will fce in the future. In budgeting, such criticl issues re predetermined, either s finlized decisions or s ssumptions. Centrl to budgeting is the tsk of forec burn up levels of lons, deposits, nd revenue. But forecsting is reltively unimportnt in strtegic plnning. Similrly, the reltionship between costs nd revenue genertion must be ssumed in budgeting. In strtegic plnning, such reltionships re t best secondry ratetion. True strtegic plnning encompsses no such ttempt to predetermine decisions. Insted, it provides guide or frmework within which future decision mking will tke plce. It emphsizes long-run rnge objectives, not so much in terms of specific finncil performnce, but in terms of where nd how the soused will position itself with respect to customers, regultors, employees, product types, technology, nd the community. For exmple, bnk locted in n re where the demogrphics r e chnging substntilly my need to storage itself by developing new products nd services nd corresponding outrech efforts to meet the shifting needs of the community.