Managing Finance Part-3 | MBA Term Papers

In the traditional way of budgeting, managers are paid on the basis of ?pay for performance?. As per this process, the employees are paid a fixed amount of salary as soon they reach a certain percentage of the target (like 80 to 85 percent); if they manage to cross the budgeted target they receives bonus for their performance and the more they move above the target, the more they receive incentive. So it can be clearly concluded that employees? incentive are directly related to budgets and targets. The lower the target, the more they will be benefited (Lagace, 2003). For example if the manager finds that their incentive is related to the profit earned by the company, then they will try to boost the revenue by realising future sales at present and postponing expenses to future, without paying attention to what will be the impact of such action in company. In big companies, management set budget at the beginning of their financial year with an aim to create a harmonious coordination between other business units, a healthy flow of information, lower expanses and highly satisfied customers. But as soon as the budget comes into action, the business unit?s managers start hiding vital information. Such distorted information often leads to wrong decision making (Jensen, 2001). Many a time the top level management gets involve in such fraud cases and they disperse wrong information to the customers and shareholders. One such example of fraud case in past was seen in Lernout & Hauspie, a software firm in the year 2001 (The New York Time, 2007).
The misguiding information not only hampers the company, but the damage spreads and affects the national economy. For example at the time of economic boom, misguiding information revealed by company leads to wrong prediction of the financial analysts regarding future growth of the company. They gives an over statement of company?s earning and profitability, and the top management ends up taking wrong decisions. But as soon as the economic slowdown starts, sales falls below expected levels, inventories gets accumulated, and as a result the management?s incentive and bonus moves down. All these create an environment of de-motivation and depression that negatively affects company?s image (Jensen, 2001).
Though budgets are common in almost all the organisations, but it has to be accepted that almost all the employees hate the term ?budget?. Employees believe that budgets are designed in such a manner that the employees can never reach them and thus management can make them work more (Media Willy, 2003).

Suitability of budgeting in the 21st century
There are many factors which lead to faulty budgeting process like ?Faulty Arithmetic in the Budget Figures, Errors in the Arithmetic of the Actual Results, Reality is Wrong and Differences between Budget Assumptions and Actual Outcome? (Financial Management Development, n.d.). As per the report published by Centre for Sustainability Management, many organisations (like network organisations) have accepted the fact that budgets no longer serve the purpose in their organisations (Centre for Sustainability Management, 2001). In a survey conducted by KPMG in UK, it was found that 37 percent of the companies provided a monthly update of their 12 months? forecast, 50 percent of the companies are planning to start updating their annual budget on a monthly basis and around two-third of the companies have adopted rolling budget for forecasting. But as per KPMG, a good forecasting can be only achieved if the company has a good performance management and reporting system (KPMG, 2009). It has been found that company puts a lot of time and effort to set their annual budget, but as soon as they are bought into action, the market condition changes and the budgets lose their importance. So keep the budget updated it has to be revised on monthly basis. Again such regular updating needs further managerial time which makes it more costly. Many experts suggest that budget can be only successful its results are achievable and measureable. Management should undertake stress testing and scenario analysis to find out economic risk and prevailing opportunities.
Conclusion
The concept of budget and budgeting has evidence regarding its origin in bible. Budget was first introduced in industrial organisations in 1920?s. With passage of time it developed as an integrated financial tool (Akintoye, 2008). The budget and budgeting technique has undergone constant change to fit the changing market condition. But in the present competitive world where market situations and the corporate strategies are changing at fast rate, budgets are losing their importance. Many a time the top management find themselves helpless (Diamond, 2006, p. 94-95).
The underling truth behind budget is whatever precaution does the management adopt, there will always be a gap between the actual and perception. While setting the budget for the future, management have to undertake historical data into consideration, but in the fast changing globalised world, no one can predict what will happen in near future. So the management have to decide where they should go for budget preparation or not. Before taking any vital decision, the company have to rethink what role does budget play in proper functioning of their organisation and then only they should decide that where they should quit the budget or they should stick to it. They should plan what changes be introduced in the budgeting technique that to make the process more reliable. So the question remains open that where budgets are suitable in 21 century or not.
Reference

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Center for Sustainability Management. 2001. Abstract. Suitability Of Budgeting In The 21st Century. [pdf]. Available at: http://www.leuphana.de/csm/content/nama/downloads/download_publikationen/05-4downloadversion.pdf [Accessed on November 03, 2009].

Colorado. No date. The Budget Cycle. Chapter 8 ? Budget Theory. [Online]. Available at: http://abs.colorado.edu/ABS_WEB/nonhtm/guide/ch08.doc [Accessed on November 03, 2009].

Co, R. January 7, 2006. Why Do I Need a Budget. Press Release. [Online]. Available at: http://express-press-release.net/21/Why%20Do%20I%20Need%20a%20Budget.php [Accessed on November 02, 2009].

Diamond, J. 2006. Budget system reform in emerging economies: the challenges and the reform agenda. International Monetary Fund.

Economy Watch. No date. Types of Budget. [Online]. Available at: http://www.economywatch.com/budget/types/ [Accessed on November 03, 2009].

Elizondo, A., Moraga, M., Watroba, S., Akchin, J. & Werosh, L. No date. Cash Flow Budget. Budget Formats. [pdf]. Available at: http://userwww.sfsu.edu/~aelizond/documents/Budget_Formats_presentation.pdf [Accessed on November 03, 2009].

Financial Management Development. No date. Budgetary Control And Variance Analysis. Management Reporting, Budgetary Control NO 213. [pdf]. Available at: http://www.financialmanagementdevelopment.com/Slides/handouts/213.pdf [Accessed on November 03, 2009].

Gilmour, B. J & Lewis, E. D. September/October 2006. Does Performance Budgeting Work? An Examination of the Office of Management and Budget?s PART Scores. Spotlight on Public Finance. [pdf]. Available at:
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Institute of Chartered Accountants. No date. Budgeting and Business Planning. Practical Advice for Business. Business Link. [Online]. Available at: http://www.businesslink.gov.uk/bdotg/action/detail?type=RESOURCES&itemId=1074417241 [Accessed on November 02, 2009].

Investopedia. 2009. Budgeting Basics ? Introduction. [Online]. Available at: http://www.investopedia.com/university/budgeting/default.asp [Accessed on November 02, 2009].

Jensen, C. M. November 26, 2001. Why Corporate Budgeting Needs To Be Fixed. [Online]. Available at: http://hbswk.hbs.edu/item/2647.html [Accessed on November 03, 2009].

Journal of Accountancy. December 2001. Budget on a Roll. Harvard Business School. [Online]. Available at: http://www.journalofaccountancy.com/Issues/2001/Dec/BudgetsOnARoll.htm [Accessed on November 03, 2009].

Kirch, W. M. 2005. Abstract. Program BUDGETing: Six Keys to Success. Cy-Fair College. [pdf]. Available at: http://cas.bethel.edu/dept/comm/nfa/journal/vol23no1-12.pdf [Accessed on November 03, 2009].

KMPG. May 2009. Improved forecasting within the valuations process. [Online]. Available at: http://kpmg.com/Global/IssuesAndInsights/ArticlesAndPublications/Pages/Improved-forecasting-within-valuations-process.aspx [Accessed on November 03, 2009].

Lagace, M. April 14, 2003. Pay-for-Performance Doesn?t Always Pay Off. Working Knowledge. Harvard Business school. [Online]. Available at: http://hbswk.hbs.edu/item/3424.html [Accessed on November 03, 2009].

Lin, T. W. 1979. A Description Of Zero-Base Budgeting. Zero-Base Budgeting: An Analysis. Rutgers Accounting Web. [pdf]. Available at:[Accessed on November 03, 2009].

Media Willy. September 23, 2003. Chapter: 1, Budgets Are Like Diets_Everyone Cheats. [pdf]. Available at: http://media.wiley.com/product_data/excerpt/87/04714765/0471476587.pdf [Accessed on November 03, 2009].

National Center For Educational Statistics. 2009. Budgetary Approaches. Chapter 3: Budgeting. [Online]. Available at: http://nces.ed.gov/pubs2004/h2r2/ch_3.asp#top [Accessed on November 03, 2009].

National Food Service Management Institute. No date. Methods Used in Budgeting. Section 5: Budgeting. [pdf]. Available at: http://www.olemiss.edu/depts/nfsmi/Information/fmis/section_5.pdf [Accessed on November 03, 2009].

NetTOM. No date. Session 13: Cash Budget. Chapter: 7: Preparation of Forecast Financial Statements. [Online]. Available at: http://cbdd.wsu.edu/kewlcontent/cdoutput/TOM505/page22.htm [Accessed on November 03, 2009].

Purkey, C. 2009. What is a Budget?. Planning and Budgeting: What?s Your Strategy?. WACUBO Business Management Institute 2009. [ppt]. Available at: http://www.wacubo.org/bmi/Purkey_PowerPointPresentation-BW.ppt [Accessed on November 02, 2009].

The New York Time. May 20, 2007. Fraud trial begins against Lernout & Hauspie software firm. Business. [Online]. Available at: http://www.nytimes.com/2007/05/20/business/worldbusiness/20iht-lernoutb.4.5793790.html [Accessed on November 03, 2009].

Bibliography

Bentz , F. W. No date. Flexible Budgeting. [pdf]. Available at: http://fisher.osu.edu/~bentz_1/525/notes/Flexible.doc

Computron. No date. Budget Cycle Management: For improved budgetary control. [Online]. Available at: http://www.computronsoftware.com/pdf/budget_cycle_management.pdf

Evangelical Council for Financial Accountability. No date. Zero-Based Budgeting. Available at: http://www.ecfa.org/TopicDisplay.aspx?PageName=TopicZero-BasedBudget

Hofstede, H. G. 2003. The Game of Budget Control. Routledge.

Lerche , I & Paleologos, E.No date. Limiting Risk In Environmental Problems: Corporate Budget Constraints And Minimum Involvement. [pdf]. Available at: http://users.ipfw.edu/ISIORHO/G300Limiting%20Risk.pdf

Northern Arizona University. No date. Chapter 11 Program Budgeting and Resource Attainment. [Online]. Available at: http://www.prm.nau.edu/PRM275/program_promo_&_budget%20lesson.htm

Pasewark, R. W. No date. Budgeting. [pdf]. Available at: http://pasewark.ba.ttu.edu/ACCT%205301/M06%20Operational%20Budgeting.doc

Sun, J. & Lynch, D. T. 2008. Government Budget Forecasting: Theory and Practice. CRC Press.

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Five Real Estate Follies, Now Reaching Their Inevitable End - Curbed

Monday, September 24, 2012, by Rob Bear Photos: Lakebutlermansion.com

Five years ago, David Siegel and his wife Jackie were living the high life, as the billionaire real estate mogul continued to rake it in with a successful time-share firm. The couple were planning their dream home, a 90,000-square-foot mega-mansion outside of Orlando, when the financial crisis hit, crippling Siegel's business and eventually spawning the story at the center of the much-lauded documentary The Queen of Versailles. The couple, who were already living in a 26,000-square-foot mansion nearby and attended to by a staff of 19, spent many, many millions on the custom palace, but, so far, have had no luck unloading the mansion, the price of which has been chopped down to $90M complete, or a bargain $65M in its current condition. Yes, someone might come along and scoop up the shell, but given the less-than-desirable location, the condition, and the massive cost of completing a now-gauche, infamous white elephant, it seems unlikely the Siegels will ever recover their investment. Instead, they're still trying to complete the place and move in, years behind schedule. Such tales of excess and failure are not uncommon, and, even as the economy regains its footing, some ultra-rich folks are engaging in similar flights of fancy, with the potential for similar financial consequences.

? Back in 2004, University of Phoenix billionaire Peter Sperling bought this partially-complete limestone mansion on a section of San Francisco's Broadway known, fittingly, as Billionaire's Row. He spent $32M on the property itself, a French limestone shell with more than 21,000 square feet under the roof, then began completing the place, before quitting in 2006 and listing it for a whopping $65M. That would have been some shrewd investing, had it sold. Instead, it's still on the market and has seen its price chopped all the way down to $38.5M. Yes, there's still a modest profit to be had here, but the carrying costs and unknown expense of his renovations make this a folly nonetheless.

Achieve MP3 Data Recovery on Mac - Data Recovery

Monday 24 september 2012 1 24 /09 /Sep /2012 04:34

With the advancement of technology, your favorite music collections can be stored through MP3 player. Cassette tapes and CDs are already outdated. With MP3 player, you have the convenience of having a portable music storage device. Not only that, you can also easily download different songs of your favorite artists. However, even though they're convenient, the most common problem with MP3 players is that the songs can be easily deleted. But don?t panic, there are still ways to recover MP3 with ease.

Why will you lose Your MP3 Files?

Before Recovery Mp3, you must make clear what cause them lost. The situations which may cause MP3 files loss are listed as follows.

?Accidentally or carelessly delete MP3 files from your computer.

?Lose MP3 files when transferring them from computer to your MP3 player or iPod for unknown reason.

?Formatting or virus infection.

?Unexpected shutdown.

How to Achieve MP3 Recovery Successfully?

Usually, if the MP3 files you lost were originally stored in your computer's hard drive, the first thing you should do is to check your Recycle Bin. If they have just been deleted and you haven't emptied your Recycle Bin yet, you can just easily click restore. If not, you can find the MP3 recovery software which can help you to recover your deleted MP3 files both in your computer or your MP3 player.

Most MP3 recovery applications are easy to download on Internet. But which one is the best? The answer is uFlysoft Data Recovery for Mac.

You just need to install this free download application on your Mac, connect your MP3 player with your Mac. This data recovery software will scan your favorite music collections without hassle (If your MP3 files are storing on your computer, just scan your hard drive.) You can find that the uFlysoft data recovery for Mac can scan your deleted MP3 files completely. After scanning finish, click ?Recover? button, and then wait for a while and drink a cup of coffee, your MP3 files will come back to you again! Isn?t it easy and risk-free to achieve MP3 Recovery?

Besides, not only the MP3 files can be recovered by uFlysoft data recovery, but also the photos, videos even the Word and Excel files can be recovered. All you need is following the same steps above.

Tips

If you are a Windows OS user, have a try on uFlysoft Photo Recovery for Win, a powerful media file recovery tool which helps you to recover your lost photos, audio and videos files with ease.

Source: http://uflysoft.over-blog.com/article-achieve-mp3-data-recovery-on-mac-110473352.html

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NCAA Water Polo No. 4 Cal Takes On No. 1 USC

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Source: http://www.conquestchronicles.com/2012/9/23/3377170/ncaa-water-polo-no-4-cal-takes-on-no-1-usc

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Cancer Fund Gala Set for Heavy Metal Legend + More News

David Livingston, Getty Images

We may have lost Ronnie James Dio to stomach cancer in 2010, but his memory and his honor live on. The Ronnie James Dio Stand Up and Shout Cancer Fund, founded in memory of the world-renowned voice of Dio, Black Sabbath and Heaven and Hell, will host its second Awards Gala on Halloween night, which is Wednesday, October 31. The event takes place at the Avalon, located in Hollywood. Awards will be presented to seven distinguished honorees for their contributions to spreading awareness of fund's important work. [Via Press Release]

Sail the high seas with Prong this fall. The band will perform as part of the Metal Insider Rocks Off Concert Cruise aboard the Star of Palm Beach. The show will take place on Friday October 19 and is an official CMJ Show. This or the Apocalypse, For Sleeping or Jumping and Eminence will support. The cruise departs from Pier 40, located at West Houston St. at West Side Highway.

"Prong has not played NYC since the release of our latest album Carved Into Stone," said frontman Tommy Victor. "Actually, we haven't done a gig anywhere in the five boroughs in a very long time. So I'm happy to announce our return home as we board the Rocks Off Cruise on Oct 19th for the Metal Insider Party at CMJ. The boat rolls out of New York Harbor and from what I hear it'll be circling the Statue of Liberty while we're on stage. What a great way to celebrate our return!" [Via Press Release]

Job for a Cowboy's Jonny Davy is the only original member of the band, but he feels that the current lineup is strong as ever. However, if there are anymore shifts in membership, it could do the band in. "When you're that young, so many things can happen with school, college ... when you go on tour, when you're that young, so many things can happen. I feel like if we started this band in our mid-20s, we would have a solid lineup all the way through. If this lineup ever changes at this point, Job for a Cowboy is done." Let's hope no one leaves, since we need JFAC's deathcore in our lives. [Loudwire]

Watch Dio's 'We Rock' Video

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Windows 95 / Pokemon Elements Chart by *Wrim on deviantART !!!...

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Florida State 49, Clemson 37: Postgame Wrap

[Report by Dustin Tackett] When Jimbo Fisher walked in after Saturday?s game against Clemson for his press conference, you could see the pride in his face ? mixed with a little exhaustion. He began talking about Clemson as a team and how good they looked.

"I give a lot of credit to them," said Fisher. "They are a well-coached and a heck of a football team."

Jimbo continued on talking about his teams resilience and how proud he was that his guys were able to fight through their first taste of adversity in 2012. With the ?Noles going into the half trailing the visiting Tigers, the overwhelming question was whether or not this Florida State football team could respond and Fisher couldn?t have been happier.

"This was a good win for us but we should expect to play games like this, and then we have to move on," said Fisher. "I can?t say enough about our players? ability to overcome adversity ? to compete in the game and our assistant coaches did a tremendous job keeping our guys in the game, their heads in the game."

Jimbo really stressed the importance of putting this win against Clemson behind them and move on to the next game. When asked about EJ Manuel?s performance, he was a little surprised by the numbers. Manuel was 27 for 35 in the air Saturday night for a total of 380 yards and two touchdowns. He knew that EJ had played a great game, limited his mistakes, and helped fight through during crucial situations, and he knew EJ was vital in Saturday?s win against Clemson but Jimbo wasn?t the only one. While talking to James Wilder Jr. after the game about Manuel?s leadership on and off the field, EJ walked by and gave him a high-five and ? Wilder could not stop smiling.

"Man, see that?s exactly what I?m talking about," said Wilder. "We know EJ is there for us and is always there to help calm me down."

Chris Thomson had another big night on Saturday in Doak Campbell Stadium, but he couldn?t stop talking about the leader that EJ Manuel has become for this team.

"I can just look him in the eyes and know it?s time to step it up and get things done, and that?s just who he is," said Thompson. "We know he?s going to get his job done and he lets us know that he needs us."

Thompson also talked about his success on the ground and how he feels more confident out there because of the run blocking.

"All of these guys tell me I won?t get touched," said Thompson. "Lonnie tells me, that guys won?t touch you, the offensive line tells me the same thing, and that just helps me feel more confident."

When asked about his big run where he ran over a few defenders but got called back, he smiled and said, "Man, that felt good, that felt real good ? just trying to be a little like Wilder."

Timmy Jernigan was all smiles after the game and had a lot to say about their performance in the first half of the game. He thought they came out way too exciting and just needed to settle down, and that?s just what they did in the second half.

"We were first like just calm down, let?s just play ball the way that we play ball," said Jernigan. "They came out with a couple of trick plays and we knew they was going to do that ? we just have to be ready for trick plays from now on because a lot of teams aren?t going to be able to beat us straight up."

Bjoern Werner also had a lot to say about the Clemson offense. He talked about how great their offense was and how they knew there were going to be deep plays, but end the end, Werner gave the credit to the fans.

"It was amazing, I give a lot of credit to our fans," said Werner. "I just felt another bit of energy which pushed me through the rest of the game."

I?ll leave you with one of my favorite quotes of the night and that?s from Xavier Rhodes. When asked about this Clemson team and their speed, and how hard that is to prepare for, Rhodes delighted the crowd of writers.

"When we were watching film on these guys, they didn?t look fast, they didn?t even look like they were running," said Rhodes. "Once we got on the field we realized that wasn?t the case."

Just about everybody I talked to after the game had a lot to say about EJ Manuel and his performance, as well as his leadership. Everybody seems very proud of him but even more privileged to be his teammate. While they were all very happy to get this win, they continued to stay focused and ready to get working on next week.

Florida State will travel to Raymond James Stadium next Saturday to face the University of South Florida and look to keep the momentum from tonight?s win as fuel. The game will be on ESPN at 6 p.m.

Source: http://www.tomahawknation.com/2012/9/23/3375892/florida-state-49-clemson-37-postgame-wrap

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