Discuss the advantages and disadvantages to QVL of using budgets as an aid to decision - making. 16
One of the advantages to QVL of using budgets as an aid for decision making is that they will improve their productiveness.The implication is that QVL will increase the direct control of their Managing Director Evan to the business. Because,Evan is «frequently out of the office and spends most of his evenings in a hotel room checking up on production and installation schedules, customer requests and business proposals».By this he is loosing control over the business and also make some disagreements inside the working staff,as they want their leader. Moreover, These business trips need a significant sum of money,that s why, he should have a set budget of spending on his business trips.So, budgeting will reduce irrational spendings on traveling and will improve a workers discipline.
However, The main disadvantage of using budgeting to QVL is that this process is too time consuming and really difficult in QVLs case. An implication of this is that this process may just turn to waiste of time, because there may be a problem in gathering information and also in the absence of clear policy. Moreover, There is also a problem of Evan’s random giving of discounts which is not helping the stability and validity of the budgeting process. So, the budget set in this case will be pointless. discounts which is not helping the stability and validity of the budgeting process. This is an issue of culture and one that Evan will need to address urgently.The appointment of Liz Walker may help to increase the importance of budgets at QVL as she had previous job experience overseeing the budgeting for a large marketing firm.
To sum up, I think that it is good idea to use budgets as an aid to decision making as it will help in the efficiency and control over the business, but overall, I think that this idea doesn't work in QVL s case it will not help in decision...
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