Effect of Budget and Budgetary Control on Non Financial Performance: In Case of Ethiopian Banking Industry
No Thumbnail Available
Date
2019-02
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Addis Ababa University
Abstract
Budgetary control is system of controlling costs which includes the preparation of budgets,
coordinating the department and establishing responsibilities, comparing actual performance
with budgeted and acting upon results to achieve maximum performance of the organization
(Buyers & Holmes, 1995). The researcher studied on the effect of budget and budgetary control
on non financial performance in case of Ethiopian banking industry. The objective of the study
was to assess the effects of budget and budgetary control had on non financial performance of
Commercial Banks in Ethiopia. The descriptive research design was used. The data was
collected using structured questionnaire from 159 respondents of the staff of 16 private
commercial banks of Ethiopia. The data was analyzed using STATA 13. The study found that
budget and budgetary control had a significant relationship with non financial performance of
the bank. Features of budgetary control leads to cost effective procurement which make an effect
on performance of the bank. Human factors within budgetary controls thus managerial
commitment, employees’ motivation, employee training, competence as well as the attitude affect
the budget control process. Budgetary control process exhibited a positive significant influence
on non financial performance of banks through influence on financial objectives, the allocation
of funds as well as investment ventures that organization undertakes. Finally, the study
recommended the banks should use budgetary control to motivate employees to do better. The
organizations should ensure full participation by managers in setting their budgetary targets and
put in place adequate control measures to improve non financial performance. Budgetary
control process should maintain teamwork between the management and finance function.
Description
Thesis submitted to the department of accounting and finance in collage of business and economics at Addis Ababa University in partial fulfillment of the requirement for the award of Master of Science in Accounting and Finance
Keywords
Budget, Budgetary Control, Financial Performance