Question

How would a company be affected by budget strategy based on personal goals rather than market analysis? Consider the effect of financing, production volume and capacity.

Summarize and evaluate concepts of budgeting, variance analysis and strategy. Such as the personal perspective to budget low so you come in high, budget high so we all feel good today, etc.

Answer 1

How would a company be affected by budget strategy based on personal goals rather than market analysis? Consider the effect of financing, production volume and capacity.

In today’s world Budget is not treated as just another mandatory activity of strategy creation .Today , it is more of a tool than drives business success .

Ensure that Budgetary aspects align with the Organization goals.

Many a time , we noticed that the team involved in formulating the vision , goal and the company strategy and the one creating Budget are different

Whenever it is relates to Company Goal , both need to understand that working in tandem is crucial to the successful implementation of strategy

Always remember a disconnect between budget and business strategy can create a bad impact on business .

Another important factor is Employee should be well aware about how strategy and financial forecasting are related to business policies and how their role in the company affects its success

Always good to have an eye on the financial health of the company . Identify KPI ( key Performance Indicator ) in terms of Budgeting and do understand complete variance analysis .

While setting individual Goal, it is more important point to note that Set Goal must be achievable

While setting target / goal of the Organization , need to factor market volatility . We need to review individual goal along with company Target number Quarterly basis and able to find out major mistake area and arrest those area before creating huge crisis