Enhancing Budgetary Control in Organizations

By drawing from Van der Stede, W.A. (2001), discuss different approaches to improve budgetary control in organizations

There are two significant approaches that aid budget control in organizations. The first one is the Activity Based Budgeting Approach, or the ABB, which narrows down to generation of budget extracted from the activity based model adopted by the organization. Essentially, the ABB approach works in achieving operational balance across the significant resources needed in addressing the demand while using the available resources. Notably, the ABB approach gives room for a firm to make adjustments on five elements before attaining the budget target. The five include the price of the product or service, the resource capacity, consumption rates of the activity and resources, resource cost and product or service demand quantity.

The ABB approach has always been the best in avoiding the unnecessary calculations in the face of the financial effect linked to operational infeasible plan. The second approach is the Beyond Budgeting Approach which is denoted as BB. The approach seeks to replace the annual budget based performance with better performance evaluations that are based on the relative performance contracts associated with the hindsight. The BB approach points at the need to evaluate performance with the help of non-financial measures believed to be aligned to strategic objectives with assumptions of attaining the appropriate level.

By drawing from Ostergren, K. & Stensaker, I. (2011), discuss the differences between budgeting and beyond budgeting approaches

Beyond Budgeting approach is believed to be an improvement of the budgeting approach. However, the improvement means that more elements were added to the latter for the betterment of the former. The defining differences are embedded in target setting, resource allocation and planning. This indicates that all the processes seen in the budget process were retained with the only difference of separating them. Briefly, planning and target setting are believed to have separated in time as target setting addresses the direction in which the company is headed to. Planning address the means of how to reach the ambitious targets. With the help of the Global Exploration Department, it could be noted that the budgeting approach started the process at sub-departmental level in which managers could compute the financial resources that could suit a given plan.

However, with the Beyond Budgeting Approach, the process is said to have become outside in where target setting relies on the strategic ambition. In terms of planning, the budgeting approach made use of the fixed measures. However, the beyond budgeting process transformed the process and adopted the relative measures. In terms of resource allocation, the Beyond Budgeting Approach is said to have adopted the dynamic process, which is different from the budgeting approach that depends on the static process.

By drawing from Sinclair (1995), discuss different forms and discourses of accountability. How does managerial accountability differ from other forms?

There are five forms of accountability that attracted the discourse analysis. Political accountability roots from the Westminster and the Athenian democratic traditions the vest the responsibility in public servants. The officer in charge can exercise the authority on the behalf of elected representatives who are also held accountable to the public in a direct way. Public accountability, on the other hand, entails responding, through a range of mechanisms such as newspaper reports, to the public concerns or hearings regarding the administrative activities. Managerial accounting further concentrates on the inputs as well as outputs, which are also referred to as the outcomes. Besides, professional accountability denotes the idea of duty in which a member of the expertise group occupies a more privileged as well as knowledgeable position in the society. Lastly, personal accountability is quite special in a way because it is a responsibility to self. It involves fidelity to self or personal conscience on the basis of significant values that include the respect one has for human dignity. Across all the forms of accountability, managerial accountability is more unique because it emerges from a structural discourse and almost has a safer as well as uncontested terrain. It embodies reassurance while invoking the touchstones of accountability as linked to funds and observation of the due process.

Apart from forms of accountability, it is also important to align the discussion with the discourses of accountability. In this context, literature focuses on discourse analysis applied in capturing the process that touches on accountability. It is worth noting that there are no fixed methods which can prescribe the discourse analysis apart from the validation tests and common phases. The first phase includes selection of extracts from interviews and the discourses while the second phase is a reflection on the discourse. In relation to accountability and the phases described, two types of discourses can be established. These include personal discourse and the structural discourse. The structural discourse points at the technical property that plays out as a contract or a role. Structural discourse commonly renders accountability as something the manager in charge works with as well as controls. On the other hand, personal discourse is more anecdotal and confidential with accountability perceived as ambiguous. This type commonly works towards admission of the risks as well as failures, invasiveness and exposure through which accountability is encountered.

By drawing from Ezzamel et al. (2007), discuss the role of different actors in constructing accountability discourse and pursuing accountability

Ezzamel et al. (2007) was attracted to the notion of accountability across schools upon introduction of budgets as well as local managements in schools. The main focus was narrowed down to the regulatory discourses of accountability as noted through the narrative of giving of accounts. While constructing the accountability discourse, the literature was attracted to two sets of the actors. The first actor included the politicians as perceived through the Welsh Executive and the members of the assembly. The second set involved the civil servants who are inclined to their duty of serving the technical advisors and the members of the assembly. Civil servants are perceived as salaried employees said to have separate professional backgrounds and temporary priorities. The key role of politicians as the first set of actors includes constructing the scope of democratic accountability as framed through the political answerability.

Therefore, politicians inform on the regulatory concerns and institutional isomorphism in which organizations are obliged to render the relevant accounts of their performance and behavior as required by procedures and rules set by external constituencies. The second set entails the civil servants who are involved in financial planning as emphasized through the politicians’ dual accountability. In this sense, civil servants are responsible for ensuring that there is value for money allocated to different department, agencies and even institutions such as schools.