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Budgeting for Results.

Thomas K Ross1

  • 1Author Affiliation: Appalachian State University, Boone, North Carolina.

The Health Care Manager
|December 27, 2019
PubMed
Summary
This summary is machine-generated.

Effective budgeting requires focusing on organizational goals and manager performance, not just financial estimates. Implementing a strategic budget ensures plans are followed, improving both treatment and cost control for better results.

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Area of Science:

  • Business Administration
  • Management Accounting
  • Organizational Behavior

Background:

  • Budgeting is often misunderstood, focusing narrowly on revenue and expense estimation.
  • Traditional budgeting fails to align with organizational goals or assess management performance effectively.
  • A strategic budget is crucial for guiding organizational direction and evaluating managerial success.

Purpose of the Study:

  • To redefine the role of budgeting as a strategic roadmap for organizational goals.
  • To emphasize the importance of aligning budget implementation with management performance assessment.
  • To guide the selection of appropriate budgeting methods based on organizational objectives.

Main Methods:

  • Analysis of current budgeting practices and their limitations.

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  • Conceptual framework development for a goal-oriented budget.
  • Comparative review of different budgeting techniques (incremental, flexible, zero-base, program, activity-based).

    • Main Results:

    • Budgets should function as strategic roadmaps, detailing goals and performance metrics.
    • Successful budgeting hinges on adherence to the established plan.
    • Focusing budgets on controllable elements of production systems enhances results.

    Conclusions:

    • Budgeting is a critical tool for strategic planning and performance management.
    • The choice of budgeting method must align with organizational goals and managerial roles.
    • Effective budgeting drives improvements in treatment and cost control.