The Effects of Budgetary Control On Organization's Performance Case Study of East African Breweries Limited (Eabl)

TABLE OF CONTENTS

APPROVAL ........................................................................................................................ ii

TABLE OF CONTENTS ..........................................................................•............................ iii

CHAPTER ONE .................................................................................................................. 1

1.0 lNTRODUCTION ........................................................................................................... 1

1.1 BACKGROUND OF THE S11JDY .................................................................................... 1

1.3 STATEMENT OF THE PROBLEM ................................................................................... 2

1.4 PURPOSE OF THE STUDY ............................................................................................. 2

1.5 OBJECTIVES OF THE STIJDY ........................................................................................ 2

1.6 RESEARCH QUESTIONS ............................................................................................... 3

1.7 SCOPE OF THE STUDY ................................................................................................. 3

1.8 SIGNJFICANCE OF THE STUDY ..................................................................................... 3

CHAPTER TWO ................................................................................................................. 5

LITERATURE REVIEW ...................................................................................................... 5

2.lINTRODUCTION ........................................................................................................... 5

2.2 BUDGETARY CONTROL ............................................................................................... 5

2.2.1 Definitions: ................................................................................................................. 5

2.3 GENERAL BACKGROUND TO BUDGETARY CONTROL .................................................. 7

2.3.1 Objectives of budgetary control ........................................................................................ 8

2.4 ROLE OF BUDGET ARY CONTROL ................................................................................ 9

2.5 LIMITATIONS OF BUDGETARY CONTROL SYSTEMS .................................................. 10

2.6TYPES OF BUDGETS .................................................................................................•. 11

2.7 GUIDELINES TO EFFECTIVE BUDGETING ................................................................... 13

2.7.1 ESTABLISHlNG BUDGET ARY CONTROL .................................................................. 14

2.7.2 ADMINISTRATION OF BUDGET CONTROL ............................................................... 15

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2.7.3 BUDGETARY CONTROLS ......................................................................................... 16

2.8 ORGANIZATION'S PERFORMANCE ............................................................................ 17

2.8.1 Definitions: ............................................................................................................... 17

2.8.2 PERFORMANCE MEASUREMENT ............................................................................. 17

2.8.3. POTENTIAL DEFECTS OF PERFORMANCE MEASURES ............................................. 18

2.8.4 RELATIONSIDP BETWEEN BUDGET ARY CONTROL AND ORGANIZATION'S

PERFORMANCE .............................................................................................................. 19

2.9 Conclusion .................................................................................................................. 20

CHAPTER THREE ............................................................................................................ 21

RESEARCH METHODOLOGY ........................................................................................... 21

3.1 INTRODUCTION ......................................................................................................... 21

3.2 THE RESEARCH DESIGN IS A CASE STUDY OF EABL .................................................. 21

3.3 RESEARCH POPULATION ........................................................................................... 21

3.4 SAMPLE SIZE ............................................................................................................. 21

3.5 SAMPLING DESIGN .................................................................................................... 21

3.6 DATA COLLECTION INSTRUMENTS ........................................................................... 22

Questionnaires ................................................................................................................... 22

Observation ...................................................................................................................... 22

3.7 DATA ANALYSIS ....................................................................................................... 23

4.0DISCUSSION, ANALYSIS AND INTERPRETATION OF FINDINGS ................................... 24

4.1 INTRODUCTION ......................................................................................................... 24

4.2 BACKGROUND INFORMATION OF THE RESPONDENTS .............................................. 24

4.2.1 Respondents gender .................................................................................................... 24

4.2.2 Respondents level of education ...................................................................................... 25

4.2.3 Respondents working period at EABL ............................................................................. 25

4.2.4 Respondents position in the organization ......................................................................... 26

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4.2.5 Respondents department in the organization ............................................•......•................. 26

4.3 RESPONDENTS FEEDBACK ON EFFECTS OF BUDGETARY CONTROL ON THEIR

RESPECTIVE DEPARTMENTS .......................................................................................... 27

4.4 ROLE OF BUDGETARY CONTROL IN EABL ................................................................. 27

4.5 VARIANCES BETWEEN BUDGETED AND ACTUAL EXPENDITURE .............................. 28

4.6 IMPACT OF BUDGETARY CONTROL ON ORGANIZATION'S PERFORMANCE ................ 29

4.7 LIMITATIONS OF THE STUDY .................................................................................... 30

5.0 SUMMARY, CONCLUSION AND RECOMMENDATIONS ................................................ 31

5.1 INTRODUCTION ......................................................................................................... 31

5.2 SUMMARY OF FINDINGS ........................................................................................... 31

5.3 CONCLUSION ............................................................................................................ 31

5.4 RECOMMENDATIONS ................................................................................................ 32

5.5 AREAS FOR FURTHER RESEARCH .............................................................................. 33

DATA COLLECTION INSTRUMENTS ................................................................................ 35

Appendix A: Time frame ..................................................................................................... 39

Appendix B: Budget ........................................................................................................... 40