The Role of Managers in the Budgeting Process – Discussion

Although most managers may not be directly responsible for creating the different parts of the organizational budget, they frequently contribute to its development and implementation. Managers are often called upon to provide input and useful information as the budget is developed. Managers are almost always responsible for understanding what the budget entails and for being accountable for aiming to meet their budgets. In order to adhere to a budget, managers must set goals and make decisions in accordance with budgetary constraints.

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As you review this week’s Resources, pay attention to the role of the Human Resource manager in the various stages of budgeting. Consider why HR managers must have an intimate understanding of their departmental budgets to make appropriate decisions and allocate resources efficiently. Also contemplate the importance of establishing attainable goals and the many factors to consider in setting goals. Adhering to organizational and individual departmental budgets, including the HR department is essential for an organization’s overall financial well being.

Post by Day 3 a cohesive response that addresses the following:

When setting profit goals, what are at least five items that should be considered in determining achievable goals? Why are these five important? Give an example of each.

To determine achievable goals, there are a number of aspects that need to be considered. These aspects include organizational structure, product line, skills of the labor force, production cost and effectiveness of the sales force. Organizational structure refers to a system which outlines how specific activities such as responsibilities, roles and rules are directed so as to attain the organization goals. Organizational structure also dictates the information flow in the organization, and thus, it plays a vital role in determining the ability to attain the set goals and objectives. For instance centralized structure may have a higher control of operations than decentralized structure, and hence a higher ability to influence profit goal than the decentralized structure. The product offered is important since it determine the volume of the market the product can control based on the targeted market (Shim & Siegel, 2012).

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For instance a product used by majority is likely to attract more sales than a product used by minority group. Labor force skill is importance since it influences speed and quality of production. This plays a great role in determining volume of production and meeting customers. For instance a highly skilled labor force can ensure more innovative products are produce at minimal cost increasing productivity. Production cost plays a great role in influencing profits. High production cost minimizes profitability while production cost management increase productivity. The company ability to manage cost is highly needed to meet profit goals. Effectiveness of the sales force is important since it controls the volume of sales. For instance a highly effective sale force will increase the sales volume and hence profitability and vice versa (Shim & Siegel, 2012). 

Consider your own organization or one with which you are familiar. For which aspects of the budget is a department-level manager typically responsible within the individual departments? Which aspects of the budget are generally within the department manager’s control and which are beyond control? Provide at least one specific example for an HR manager.

Cost control is one aspect of the budget that can be done at the department level. Each department manager should find a way or reducing operational cost in their department and enhancing operational efficiency.  Department managers also have a role of offering information from their department that can influence budget planning. This include information such as cost and revenue of the department, and maybe the past budgeting outcome; a comparison between the department budget and actual spending (Shim & Siegel, 2012).

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The department manager can also provide information on their plan to boost profitability and to reduce cost. Department managers can employ most of the budgeting planning aspect within their department. However, they cannot manage to go beyond there. Only the budgeting committee or those working in the financial department can develop the general organizational budget plan by compiling information sourced from all departments and by use of the organization general guidance (Shim & Siegel, 2012). For instance the human resource department can offer information on strategies put to improve profitability such as workers training and motivation programs, and the cost involved in doing so (Cohen & Karatzimas, 2011).  

What steps should a manager take to ensure that he or she is best able to make decisions based on limited resources and budget constraints? How can a manager plan for and manage potential changes that inevitably occur during a budget cycle? Provide at least one specific example within an HR context.

A manager should always be able to handle changes related to limited resources. They should be able to cut cost and employ alternative measures to meet the department objectives. The selected alternative needs to be practical and to yield to the highest profit possible in the department. For instance, the human resource manager may consider employing right workers for the right job with the highest job-skills match to minimize on the needed training. Human resource manager and also consider eliminating non-performing group to be able to motivate the performing group to perform even better (Cohen & Karatzimas, 2011).

What are some steps HR managers might take to help meet organizational budgets?

Some of the steps that HR managers might take to assist in meeting the organizational budgets include reducing operational cost by ensuring high level of workers efficiency through hiring skilled workers, investing on training and workers motivation. HR managers can control quality of production by controlling workers skills and attitude. They can also control volume of sales by controlling sales force efficiency through the adapted method of compensation and selecting the most talented workforce. They thus have high ability to control revenue and to cut the budget expenditures, making it possible to meet the budget expenses (Cohen & Karatzimas, 2011).

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