EFFECTIVE RESOURCE BUDGETING AS A TOOL FOR PROJECT MANAGEMENT

1.1 Introduction

Budgeting serve multiple functions and offer variety of information to the overall operations of business enterprise. Today the important of budget and budgetary control can never be over emphasized. Thus for survival of any oil cooperation, management need to embark on budget to effect proper planning and control. In this view, budgeting can be seen as a process of planning and control. Proper budgeting can never affect efficient plans of an organization without control. Control as it were is an important tool which must be priced to keep in check with the plans of the firms and for correction of any deviation from the stipulated plan of the organization in question.

As a prelude to other parts of this study, this chapter will discuss the background upon which this study was initiated, the statement of problems that led to this study, the Aim and Objectives of the study. Others are Significance of the study, Scope of work, Research hypothesis and questions, Limitations of the Study and Definition of technical terms.

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1.2 Background of Study

Increasing competition is continually pushing businesses towards more efficient processes, and slimmer margins. Highly capitalized industries have to ensure that their resources are used most effectively. Yet at the same time, businesses must adjust to rapidly changing customer requirements and supply chain conditions. The key to achieving operational excellence, therefore, is in the effective and flexible management of resources, and this means optimizing and scheduling people, processes, vehicles, equipment, and materials so that utilization is maximized while business goals are met.

Budgeting is the accepted basis for profit, planning and financial control. It has been practice effectively and profitably by many progressive companies who generally regard it not simply as a procedure but as one of the more important of process of management. Budgeting is one of the management tools that force manager to perform according to a given level of expectation. The process of preparing the budget forces the executive to become better administrator. It puts planning in the first key and budgeting primary attention directing because it helps managers to focus in the operating problem early enough.

Budgetary control is control technique which when the compares of the planned state of affairs with actually state of affairs and the continuous devising of means of correcting the deviation. It involves the use of available technique such as operational research, computer science and so on, to ensure that the budget is realistic as possible. The budget is without doubt, the most widely used control device in both business and government circle. The budget is drawn up for control purpose, that is an attempt to control the direction that the firm taking.

Indeed, it is used extensively to many people, the word budget is synonymous with control still, and the preparation of budget originates as a part of planning process. Some companies in other to avoid the negative reaction that are many a time associated with the concept of control. Refer to their budgetary controls as either profit plan or profit path. The aim of budgetary control is to provide a formal basis for monitoring the progress of the organization as a whole of its component parts towards toward the achievement of the objectives specified in the planning budget.

Budget planning budget control is part of the overall system or responsibility accounting within an organization. A vast number of organization and company are getting involved in budgeting and budgeting control in Nigeria, and this is taking different forms, but the one that seems to be gaining more recognition is based on the concepts and ideas developed in budgetary control.

In Nigeria there has been series of changes in the managerial capabilities and operations towards financial management with the recent years, the noticeable changes are complex. Eminent Nigerians of various caliber have dealt with the failure trend to financial management of enterprises in Nigeria from deferent perspectives, for example, the banking industry has experienced problem of various types such as fraud, mismanagement of funds which leads to poor overall performance. There and other problems formed the basis for inadequacies in financial management. Some analyst has classified these causes in a member of ways as factors militating against proper financial management and progress in privately owned enterprises in Nigeria.

Therefore, in Nigeria where the research was carried out, the activities that was conducted is to investigate the Effective Resource Budgeting as a Tool for Project Management using Coca-Cola Company as a case study.

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1.3 Statement of Problems

Investigation revealed that the challenge in most organizations has posed a threat on the realization of its development and the achievement of its set objectives. This is as a result of fundamental issues of inadequate and improper acquisition, utilization and maintenance of resource.

The underutilization of Resources in Coca-Cola Company has seriously led the organization into a mess because the resource is not properly managed. Mismanagement is another serious problem facing our organization today and has reduced it to nothing as people are no longer kin with their work nor ready to own up to vital Resources in the organization.

Both public and private organizations are usually faced with problems of managing their material resources effectively starting from the point of procurement to stores, issuance to user departments and finally the finished goods. These material resources are scarce and should be utilized properly for proper assimilation.

The factors that contributed or that are responsible for the failure of different companies have different problems. Financial resource management is neglected and has made most organizations to lose a substantial part of their fund through these enterprises because of Fraudulent act, Indiscriminate financing, Poor management, Lack of zealousness and experienced personnel and Inability to utilized its financial potentials etc.

The poor quality and low quantity of product have revealed that the quality of human and material resource put in place in organizations are not up to expectations and has thereby reduced the company productivity.

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1.4 Aim and Objectives of Study

The aim of the study is to investigate the Effective Resource Budgeting as a Tool for Project Management using Coca-Cola Company in Nigeria as a case study. In achieving this aim, the following specific objectives were laid out as follows:

1. To ascertain if effective resource budgeting is a tool for project management; and
2. To determine if there is a significant relationship between effective resource budgeting and project management.

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1.5 Research Questions

The study came up with research questions so as to be able to ascertain the above stated objectives. The specific research questions for the study are stated below as follows:

• Does effective resource budgeting serve as a tool for project management?
• Is there a significant relationship between effective resource budgeting and project management?

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1.6 Research Hypothesis

In order to pursue the objective of this study, the following generalized statements have been designed to guide and aids in obtaining the result for the experiment to be conducted. For this work, the null hypothesis will be represented with H0 while the alternative hypothesis will be represented with hypothesis H1.

Hypothesis One

• H0: There is no significant relationship between effective resource budgeting and project management.
• H1: There is a significant relationship between effective resource budgeting and project management.

Hypothesis Two

• H0: Effective resource budgeting is not a tool for project management.
• H1: Effective resource budgeting is a tool for project management.

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1.7 Significance of Study

The significance of the study brings out the need for an organization to constantly develop means of budgeting resources for organizational development.

The importance aspect of the study includes the following:

1. It will assist managers to know the need for human resource training and development and ensure that the right numbers of skilled/trained manpower are available for employment at the right time for all levels in the organization.
2. The study, will contribution positively at the rate at which, how resource can be effectively utilized and how it can bring about high productivity in the organization.
3. Students aspiring to be a material executive in the future see this study as an opportunity to fully investigate into the field of human, material and financial resource management to see the challenges therein.
4. It also hopes that the study will assist future researchers of resources management and how it can leads to organizational development.

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1.8 Scope of Study

The scope of the research is focused on the Effective Resource Budgeting as a Tool for Project Management using Coca-Cola Company in Nigeria as a case study.

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1.9 Limitations of the Study

During the course of this study, many things militated against its completion, some of which are:

1. Time Constraint: The time frame given to accomplish this project was very short due to school academic calendar and it was carried out under pressure which made the researcher not to implement some necessary features.
2. Research material: availability of research material is a major setback to the scope of the study.
3. Frequent power failure: This made the researcher append more money on fuel to ensure sustainable power.
4. Financial Constraint: Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).

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1.10 Definition of Terms

Budgeting: This is the process of preparing a summary statement of plans expressed in monetary quantitative terms.

Budget: A budget is a summary statement of plans expressed in qualitative term

Decision Making: Involve selection from among alternative course of action or most preferred choice out of many alternative

Budgetary Control: This IS the control technique of planning In advance of the various functions of a business so that the business as a whole can be controlled.