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Security Management
home page > Unit 11: budgeting
Issues:
Overview
Objectives and purposes
Types of budgets
New budgeting paradigms
The budget cycle
Factors in the budgeting process
(based on Ch. 12, Principles
of Security Management)
Overview
Budgeting is an essential activity because it establishes corporate
priorities, as well as allowing better financial management and
planning.
Can be thought of as "descriptions,
explanations, and statements of preferences, or values. Budgets
describe what the organization does, what it accomplishes, and
what it purchases. The budget paints a picture of what the organization
is doing now, what it did in the past, and what it plans on doing
in the future. Budgets also explain relationships." Also
show what the organization values.
Objectives
and purposes
- realistic, accurate, consistent
- contain information that lets managers make effective decisions
- consistent with organization's goals and strategies
- facilitates goal setting and measurement at all levels
- communicates strategy, plans, and required outputs to the organization
- communicates operating plans across all functions of the organization
- approved by top administrators
- gives every department resources needed to meet its goals
- shares budget objectives with those affected by it.
Requirements:
- prepare it in proper strategic context in the company's strategies, goals and plans
- identify and deal realistically with "what ifs"
- give most useful and important information for managers
- emphasize excellence in context of efficiency and effectiveness throughout the organization
"engage
organization in a coherent and efficient process that ties everything
together, including budge requirements, obstacles, and objectives"
Unintended outcomes: can be seen as a way for a manager to maintain or increase an individual's or department's power.