Budgetary Control in the Organization Essay Example | Topics and Well Written Essays - 2000 words - 4

Budgetary Control in the Organization - Essay Example In the current world, organizations use budgets as a tool for to determine and measure their goals and objectives (Gervais, Heaton & Terrance 2011). In addition, it is used as a tool to measure capacity and abilities of management who set targets for the organization. The budget allows executives of the organization to set quantitative objectives and provides financial interpretation to these objectives (Bennouna, Geoffrey & Marchant 2010). Therefore, organizations use budgetary control techniques to plan, monitor, and coordinate the distribution of value money to the respective departments within their structure (Kaplan & Norton 2006). This is one of the major reasons that the budgetary control is one of the significant elements in performance management as the budgetary control allows an organization to determine its performance in the sustaining market (Bennouna, Geoffrey & Marchant 2010). In addition, it allows management to evaluate the relationship between corporations and capi tal markets (Bennouna, Geoffrey & Marchant 2010). This document highlights the significance of budgetary control techniques; it further analyzes budgetary control and its limitation in the capital market. Â  The organization operates in various segments, classified on the basis of its functions and programs (Bennouna, Geoffrey & Marchant 2010). These segments have unique and distinct objectives according to their performance and tasks (Bhimani & Bromwic 2009). Organizations make use of Budget techniques to strategically plan their actions to structure the organization and to sustain motivation of their employees to attain objectives of the business (Stedry 2011). Performance management is related to the activities undertaken by management to ensure that goals of the organization are effectively and efficiently met (Gervais, Heaton & Terrance 2011).