EFFECT OF BANK FAIL EFFECTIVE BUDGETARY CONTROL AS AN INSTRUMENT FOR ORGANIZATIONAL SURVIVAL IN NIGERIA ECONOMY

Abstract

This study was on effect of bank fail effective budgetary control as instrument for organization survival in Nigeria economy. Five objectives were raised which included: To determine whether budgeting is an effective management tool in organizations, to determine whether budgetary control has contributed to the success and survival of most set ups, to determine whether some organization would still have achieved success without effective budgetary control, to determine whether participatory budgeting aids effective budgetary control, to determine the impact of deviation from established budgets, to assess the relevance of management principles on budgetary control and to make recommendation on how to improve performance in organizations. A total of 77 responses were received and validated from the enrolled participants where all respondents were drawn from united bank for Africa. Hypothesis was tested using Chi-Square statistical tool (SPSS).

Chapter one

Introduction

1.1Background of the study

Budgeting control is the process of ensuring the accomplishment of budgetary plans by applying the needed corrective measures to deviation i.e. moving away from the original plans it is also a process of assigning responsibilities for the achievement of budget targets measuring actual performance and comparing actual with planned performance budgetary control is therefore as essential as the making of budget.

All survival conscious organization both public and private have objectives or goals which they try to attain with resources available to them.

These objective or goals include survival in hostile and competitive business world.

Maximizing of profit as well as attaining a certificate level of societal responsibility to community in which they operate. Resources for the attainment of this objectives are limited hence the need for planning.

Planning in form of budgeting a budget is plan of action which an organization intends to execute within any given period it is not enough to make which cannot be achieved. Therefore, the achievement budgetary plans require control mechanism.

1.2            STATEMENT OF THE PROBLEM

The modern business world is characterized by intense competition, new product development, use of advance technology, diversification etc. all these are aimed at making success out of businesses.

But we know that not all business are successful. Some have collapsed. Others liquidated while others have been swallowed by stronger organization, and still many others have successfully weathered the hostile business environment.

Recently, some business organization in Nigeria i.e. banks have been listed as distressed while others are listed as healthy. Some manufacturing organization has ceased production while others are producing below installed capacity. The list is endless.

The question then is, why does some organization find it difficult to survive while others which operate under the same economic condition make huge profits does budgeting and budgetary control influence the survival of organizational?

This research is therefore aimed at determining the import of effective budgetary control on organizational survival using United Africa Company Nigeria Plc. As a case study. United African company Plc is one of the few companies that has maintained a steady progress in its business activities its turnover as well as the profit figure on the increase for the past four years and business has been generally good for the company inspite of prevailing national economic problem. Relating him survival of the company to its budgetary control is the aim of this research.

1.3            OBJECTIVE OF THE STUDY

The objective associate with this study include:

v To determine whether budgeting is an effective management tool in organizations

v To determine whether budgetary control has contributed to the success and survival of most set ups.

v To determine whether some organization would still have achieved success without effective budgetary control

v  To determine whether participatory budgeting aids effective budgetary control

v To determine the impact of deviation from established budgets

v To assess the relevance of management principles on budgetary control

v To make recommendation on how to improve performance in organizations.

RESEARCH HYPOTHESES

The following research hypotheses were formulated;

H1: budgeting is not effective management tool in organizations

H2: there is no relevance of management principles on budgetary control

SIGNIFICANCE OF THE STUDY

According to Nweze (2011), Budgeting is very important especially at this time of our economic development at this time of our economic development is that? a. It will show why profit planning is very vital for any manufacturing establishment that wishes to survive. b. It will help them to determine and maintain an acceptable level between high profit and low profit at a given time thus leading them to attain the various organizational goals and objectives

1.4            SCOPE AND LIMITATION OF THE STUDY

Budgetary control measures shall be the focus of our study we may not present budget schedules as this is outside the scope of our study, but rather we shall present, state some problems encountered during the period of data collection.

Their was the problem of time to interview management and staff, time to visit various organization and time to re evaluate the responses to questionnaires.

All these time were not adequate hence time became a constraint. A study of this nature would require financial assistance from either the government or private bodies but since this was not possible the researcher utilized the limited resource available to him.

Some questionnaire administered on management and staff of the organization visited was not returned some were returned unanswered while some came back with incomplete answers. All these limited our sample size form what it was originally intended.

DEFINITION OF TERM

EFFICIENT: A firm is said to be efficient if it can manage their resources well

EFFECTIVENESS: This entails proper co-ordination of these limited resources in form of both human and material resources to combat their responsibilities

PLANNING: The design of a desired future state of an entity and the effective ways of brings it about.

GOALS: Performances can be defined as the assessment of the company towards reaching the targeted goals and objectives.

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