Budgets play a critical role in management activities such as planning, controlling and motivating...

Question

Budgets play a critical role in management activities such as  planning, controlling and motivating employees. Used effectively,  budgets can help a company achieve its goals and create a productive  work environment. In contrast, budgets can also create a hostile work  environment. Consider the relationship between budgets and employee  morale and then reflect upon your own work experiences. Explain how  budgeting was incorporated to achieve the company's overall goals and  objectives. Reflect on whether or not the budgets were effectively  applied and whether your experience was positive or negative. Why do  employees have so much emotion when it comes to budgets and budgeting  decisions?

Khushboo · Accepted Answer

BUDGETING 
BUDGETING		2
	
FROM: KHUSHBOO MURARKA
DATE: 15/04/2019
SUBJECT: BUDGETING
Budgeting is an important financial management activity that assists the business to plan and control cost as well as motivate employees. Effective use of budget can help the organization achieve it corporate objectives and foster an atmosphere of productivity. However, it can lead to a hostile work environment among employees, if not used properly. Budget is a financial plan that contains the list of all the company’s projected revenue and expenditure. Budgets are used for effective control of organization plan. Budget compels and motivates management to make an early and timely study of its problems.  When budgets are implemented in a right manner then it will enhance the company to achieve its long term goals and objectives. The process of budgeting covers setting plan for future growth and profitability as profit is a required return on resources which is a basic aim and goal of the Company. 
Financial controls affect each and every aspect of the organization which also includes the behavior and attitude of the employee of the company. In other words we can say that greater the control in the organization, greater will be the impact on the employees’ attitude and behavior of the organization. Employees cannot spend above the capital that they have budgeted. Budgets are in place so that the employees know what to expect and what is expected from them. The mentioned below benefits can be obtained from a effectively and efficiently managed budget.
1) Organization can better coordinate their activities with the help of budgeting processes.

Budgets play a critical role in management activities such as planning, controlling and motivating employees. Used effectively, budgets can help a company achieve its goals and create a productive...

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