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Traditional budgeting in today’s business environment

Traditional budgeting has been subject to several controversies with many arguing in favour and against its use. The two sided arguments were discussed with the help of existing literatures. This research provides a conceptual meaning of traditional budgeting as an examination of income with respect to expenditure and developed a model framework for understanding the usefulness of traditional budgeting in today’s business environment. A tripod relationship between budget, household and managers was developed & analysed. The research explains the benefits of traditional budgeting and also provides an alternative to traditional budgeting concept in today’s business world. The study shows that influence of organisational culture was seen to constitute the bane of traditional budgeting process, implementation and performance management with control as the critical variable at all levels of human endeavours and concludes that budgeting is the panacea for enforcement of control, target, and accountability. It entrenches motivational spirit & managerial direction among workforce, hence should be adopted by both individuals and business entities. | Journal of Applied Finance Banking vol. 7 no. 3 2017 111-120 ISSN 1792-6580 print version 1792-6599 online Scienpress Ltd 2017 Traditional Budgeting in Today s Business Environment Asogwa Ikenna Elias1 and Etim Osim Etim2 Abstract Traditional budgeting has been subject to several controversies with many arguing in favour and against its use. The two sided arguments were discussed with the help of existing literatures. This research provides a conceptual meaning of traditional budgeting as an examination of income with respect to expenditure and developed a model framework for understanding the usefulness of traditional budgeting in today s business environment. A tripod relationship between budget household and managers was developed analysed. The research explains the benefits of traditional budgeting and also provides an alternative to traditional budgeting concept in today s business world. The study shows that influence of organisational culture was seen to constitute the bane of traditional budgeting process implementation and performance management with control as the critical variable at all levels of human endeavours and concludes that budgeting is the panacea for enforcement of control target and accountability. It entrenches motivational spirit managerial direction among workforce hence should be adopted by both individuals and business entities. JEL Classification Numbers M41 Keywords Traditional Budgeting Planning Household Management Organisations 1 Introduction 1.1 Overview of Traditional Budgeting Generally what is often referred to as traditional budgeting can be called fixed budgeting Jonsson Akerlund 2012 . Traditional budgeting sets out income and expenditure plan. It spells out a list of specific financial obligations like feeding shelter clothing transportation and so on including other complex needs of household and entities within a specific period of time in line with income level. It sets out the sources and application of 1Department of .