Body Glove Case
Which purposes are emphasized?
The purpose of Body Glove’s budgeting system was to project expenses and forecast revenues for the upcoming fiscal year. The budget is used to monitor performance (but not linked to performance based incentives) and detect early warning signals of problem areas.
The budgeting system allows the managers of each department monitor their expenses in which budgets have been set for materials, salaries and legal expenses amongst others.
Question 2: Trace the steps in the development of the budget at Body Glove. What are the key events that relate to the timing of the steps in the budgeting process? 1. The budgeting process of Body …show more content…
* Body Glove needs to undertake some major strategic planning to ascertain company key objectives and ensure that the budget reflects these plans. * Managers should not be the final people to establish the key figures relating to the budget, this should be done separately based on information provided by previous years data (a board or a strategy department should be in charge of this) to eliminate bias in forecasts * The president needs to ensure that the goals of the organisation are communicated clearly throughout the company and how each department directly relates to these goals. Calling a meeting with personnel from each department may be important in communicating this information. * Each individual should relate to the budget. For example, the sales forecasts are dependent upon the work of the sales team and therefore should be a motivator for them to perform. Achieving outcomes should relate to performance incentives, this includes managers also.
Question 5: If Body Glove continues to grow and, perhaps, diversifies, what changes will have to be made to the budgeting and review process?
Strategic budgeting is imperative in any organisation. Leland (2003) asserts ‘The behavior or capabilities of the large and complex organisation cannot be fully comprehended by analyzing its individual parts. Because of its complexity, the organisation or system,