A framework for the strategic budgeting process is shown in the following chart.
A framework for the strategic
budgeting process is shown in the following chart.
F. Glueck & Lawrence R. Jauch, Strategic Management . Top management initiates the
process. In large organizations the budget department at the headquarters
provides all information to the SBUs and advises them in connection with
preparation of budget proposals.
communicationAs the first step in the process,
the corporate objectives and strategy are stated along with the environmental
and competitive conditions to be communicated to the SBUs (organizational
initiative They in turn draw up preliminary
budgets after defining the unit-wise objectives and strategies.
Negotiation The process involves a series of
negotiations among managers at the SBU and corporate levels. For instance, unit
manages having defined the objectives and strategy of the unit prepare the
premises and forecasts which are sent for approval by the top management.
budget Tentative allocation of resources
takes place at the corporate level and budget proposals are called for on that
basis. The preliminary budgets indicate changes in the resource requirements as
compared with the previous period.
sent Based on the preliminary budget
units draw up their plans and programmes. And make proposals. The proposals are
sent for consideration of the top management by the SBUs.
Approval Only on
approval of the proposals the
Tags : Strategic Management - Strategy Implementation
Last 30 days 1730 views