Budget and Budgetary Control for Improved Performance: a Consideration for Selected Food and Beverages Companies in Nigeria

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European Journal of Economics, Finance and Administrative Sciences ISSN 1450-2275 Issue 12 (2008) © EuroJournals, Inc. 2008 http://www.eurojournalsn.com

Budget and Budgetary Control for Improved Performance: A Consideration for Selected Food and Beverages Companies in Nigeria Ishola Rufus Akintoye Room 116, Department of Economics, Faculty of the Social Sciences University of Ibadan, Oyo State, Nigeria, West Africa Tel: 234-8035369293, 8082130269 E-mail: irakintoye@yahoo.com Abstract Budget and Budgetary control, both at management and operational level looks at the future and lays down what has to be achieved. Control checks whether or not the plans are realized, and puts into effect corrective measures where deviation or shortfall is occurring. This study examines how budget and budgetary control can impact on the performance of the selected food and beverages companies in Nigeria, as considered in this study, being a sample of the entire population of the firms in the Nigerian Manufacturing Industry. We reviewed the performance of the Nigeria manufacturing industry in previous and recent times. We found out that the performance of this industry leaves much to be desired due to factors such as neglect of the industry due to over dependence on crude oil, epileptic power supply, collapsing infrastructures, unfavourable sectoral reforming among others and have resulted in low capacity utilization of the manufacturing industry. An empirical investigation was undertaken, using the simple correlation analytics technique specifically the Pearson product movement correlation coefficient. In most of he cases considered, established the presence of strong relationship between turnover as a variable of budget and performance indicators – EPS, DPS and NAS, of the selected food and beverages companies. Following our findings, we advise managers and business operators (not only in the manufacturing industry) to pay more attention to their budgetary control systems, for those without an existing budgetary control system, they should put one in place, and those with a dummy or passive budgetary control system, it is time they re-established a result-oriented budgetary control system as it goes a long way in repositioning the manufacturing industry from its creeping performance level to an improved high capacity utilization point.

Introduction
Following the uncertainties prevailing in the Nigerian business environment today, managers and stakeholders must be poised and prepared to compete favorably under these rapidly shifting conditions. Inorder to survive under these environmental complexities and vagueness managers and stakeholders of the manufacturing sector need sharp tools, proven management techniques to forecast the major changes which are likely to affect the business while they choose future direction and dimension of resources needed to attain selected goals. Budgetary control as proven management tool (Chandler, 1990) helps organization management, and enhances improved performance of any economy in different ways. Its primary

8 European Journal of Economics, Finance And Administrative Sciences - Issue 12 (2008) function is to serve as a guide in financial planning operators, it also establishes limits for departmental excesses. It helps administrative officials to make careful analysis of all existing operations, thereby justifying expanding, eliminating or restricting present practice. (Musselman and Hughes 1981). Budgeting and control entails a distinct pattern of decisions in an organization which is capable of determining its objectives, purposes or goals, and how these goals are achieved by establishing principal policies and plans. However, the inability to recognize the problem concerned and fixing a boundary off investigation creates an obstacle for the successful implementation of budgeting and control. Some organizations only look for narrow ranges of alternatives which they arrive at from their past...
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