WERABE UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF ACCOUNTING ANDFINANCE

BUDGETING AND ITS IMPACT ON ORGANIZATIONAL

PERFORMANCE (A CASE STUDY ON COMMERCIAL BANK OF
ETHIOPIA, DUNA BRANCH)

A RESEARCH PROPOSAL SUBMITTED TO THE DEPARTMENT OF

ACCOUNTING AND FINANCEINCE FOR THE PARTIAL
FULFILLMENT OF BACHELOR SCIENCE (BSc)

ADVISOR :- Banti K (Ms)

PREPARED BY:-
ID NUMBER
Abrham Ayele………………………………………………………0046/12
Wase Betrew………………………………………………………....0780/12
Amanuel Awoke……………………………………………….…….0094/12
Shimbra Lijalem…………………………………………………......0674/12
Asrebeb Shiferew…………………………………………………….0140/12

JANUARY, 2023
WERABE, ETHIOPIA

I
Table of Contents
ACKNOWLEDGEMENT.............................................................................................................III
ABSTRACT..................................................................................................................................IV
CHAPTER ONE..............................................................................................................................1
1. INTRODUCTION...................................................................................................................1
1.1. Background of the study...................................................................................................1
1.2 Background of the organization.........................................................................................2
1.3 Statement of the Problem...................................................................................................2
1.4 Research Questions............................................................................................................3
1.5 .Objective of the Study..........................................................................................................3
1.5.1. General objective...........................................................................................................3
1.5.2. Specific Objectives......................................................................................................3
1.6. Significance of the Study......................................................................................................4
1.7 Scope of the Study.................................................................................................................4
1.8. Limitation of the study..........................................................................................................4
CHAPTER TWO.............................................................................................................................5
2. LITERATURE REVIEW............................................................................................................5
2.1. Definition of Budget and Budgeting.....................................................................................5
2.2 The objective and role of budgeting......................................................................................5
2.3 Budgeting procedures............................................................................................................6
2.4. Relationship Between planning and budgeting....................................................................6
2.5. Performance measurement....................................................................................................7
2.5.1. Performance evolution concepts....................................................................................7
2.5.2. Performance reports and communication......................................................................8
2.5.3. Using performance measurement to impalement corporate strategy............................8
2.6. Budget Classification............................................................................................................9
2.7. Types of Budget....................................................................................................................9
2.7.1. Program Budgeting........................................................................................................9
2.7.2. Zero Base Budgeting (ZBB)........................................................................................10
2.7.3. Activity Based Budgeting............................................................................................10
2.7.4. Incremental Budgeting.................................................................................................11
2.7.5. Master Budget..............................................................................................................11
2.7.6. Variable Budget...........................................................................................................11

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 2.7.7. Fixed Values flexible Budget......................................................................................11
2.8. Government Budget............................................................................................................12
2.9. International control systems..............................................................................................12
CHAPTER THREE.......................................................................................................................13
3. RESEARCH METHODOLOGY..........................................................................................13
3.1. Research design..................................................................................................................13
3.2. Research approach..............................................................................................................13
3.3. Data sources........................................................................................................................13
3.4. Method of data collection...................................................................................................13
3.5. Target Population and Method of sampling.......................................................................14
3.6. Sample technique................................................................................................................14
4.2.Budget Breakdown..............................................................................................................15
ANNEX I.......................................................................................................................................16
REFERENCE................................................................................................................................19

III
ACKNOWLEDGEMENT
Above all, we would like to thank my Almighty God for giving our strength and patience from
Startingto the end. Next to God, we would like to give our deepest gratitude to our
academic advisor, Banti K (Ms), for his unreserved and constructive guidance, advice,
encouragement.

IV
 ABSTRACT
Generally theobjective of this research proposal is to assess the budget and its impact on
performance measurement on commercial bank of Ethiopia.
Specifically, this objective can be improving the banks budget and performance measurement
techniques by solving the problem of budget variance to much it with the principle of activity
based budget systems. The study also tried to answer some questions such as what are the cause
of variance, how the budgeting process made? What are the bases for preparation of budget and
so on? Data will be collect from both primary and secondary sources, primary data will be
collected by using both unstructured interview and questionnaire. Interview will be conducted
from the banks employees. Questionnaires will be distributed to the selected employee’s related
leaders of the bank, secondary data will be used from published and non published documents.
Finally, this paper will concern on budgeting and related issues to address the occurred variance
and to check the banks performance

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 CHAPTER ONE
1. INTRODUCTION
1.1. Background of the study
Budgeting is a quantitative expression for a given time period of a proposed future plan of
accomplishment ,A budget is a significant management tool for planning, monitoring, and
controlling the financial Resources.
It is a financial plan that indicates a proposed expenditure for a specific budget year and the
means of financing them. Likewise, a budget serves as performance evaluation, coordinating
activities, plan implementation and communicating, motivating and authorizing action in
organizations. Moreover, budget is used to evaluate what occurred in the preceding
period(Horngren, 2006).
According to Institution of Cost Management (1998), a budget is a planned and approved
resource before a defined period to achieve a set of objectives. Budgets are very important for
planning and empower management to imagine further on and look before they bound.
The budget is also vital tool that organizations use to set direction of their policy, cost
implications of their plans and sources of funds. Moreover, budget is an appropriate
controlling devices impacting performance of organizations (Burns &Waterhouse, 1975).
The budget play a significant role in banking sector as it illustrate how the bank plans to spend
its funds and serve as a controlling mechanism too (Wainiana, 2010).
Budget is a mathematical expression of management plan. It is away through which one
Organization undertakes all its activities. Without budget there is no successful work to be done.
Organizations use the budget to plan and coordinate the following:- to motivate
employees, allocate resources and coordinate operations within an organization, and have been,
the primary purposes of the budget. Budgeting is aimed to facilitate responsibility distribution
and is used to evaluate performance (Libby &Lindsay Part1, 2003).
Budgeting participation is a process whereby subordinates are given opportunities to get
involved in and have influence on the budget setting process (Yuen, 2007
However, most authors claim that if budgets are made without participation by the lower
Management and their supervisors, they become dysfunctional due to the employee’s lack of
commitment to their goals (Lin&change,2005).

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1.2 Background of the organization
The state bank of Ethiopia was found in 1942 with on objectives forming the duties of both
commercial and central bank in 1963 established as share company to take over the commercial
banking activities of the state bank of Ethiopia. in the 1974 revolution commercial bank of
Ethiopia got its strength by emerging with privately owned Addis Ababa bank.
. The number of branches now a day reached 1700 and stretched across the length breadth of the
country. In 2011 that it regards as it key assets fro banking development. The state owned
commercial bank of Ethiopia still dominates the market interms of asset deposit, capital and
customers base and branch network, deposit the growing competition from private bank over the
last 15 years. This make it one of the it one of the most reliable and strong commercial bank in
the country and the region. Its strong capital base above 67 years of rich experience in the market
and large branch network throughout the country on able the bank to accommodate large
demand for banking service, bank from private and public companies and to increase its over all
revenue on sustainable base.
1.3 Statement of the Problem
A budgeting is a plan that outlines organizations financial goal. So it can be vehicle for
addressing objectives, goals and problems in the most careful way. It also defined as the formal
expression of the plan objectives of management of the bank which covers all phases of
operation for a specific period of time. Budgeting is a plan it helps to allocate resources, evaluate
performance. It is a financial document used to project future income of expense. The budgeting
process may be carried out by individuals or by companies to estimate whether the
person/company can continue to operate with its project. Should not be regarded as expression
wish full thinking but it can a description of an attainable objective. This is the real fact that
motivate we to study the problem that attach with budgeting control and evaluation activities that
take place in commercial bank of Ethiopia on Duna branch. It guides (monitoring) the flow of
the banks activity at all. It also enhances the quality of the service that was rendered by the bank,
control and accountability each participantthrough internal and external relations of managers to
its employees, customers, suppliers, creditors and the concerned parties at a whole. Commercial
bank was one of the widest governmental organizations thatare series and successive budget
variance. A related factor that is behind preparation of budget and the challenges faced in the
implementation of the planned activities their consequence creates great impact on the bank.

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Problem of budgeting is not the only preparation, but also on implementation. In the current
global market environment customer is a key concern to be raised in order to continue in the
market. In this regard as ordinary customer is always come across long customer guenon our
service rendering branches.
To sum up, different studies were conducted in line with budget and budgetary control of
different sectors in the world in general and in Ethiopia in particular. However, so far as to the
researcher’s knowledge, no study has been done which considers the practices of budgeting and
budgetary control and its effect on the overall performance of the private banking sector in
Ethiopia. Thus, this study is designed to fill these critical research gaps.
1.4 Research Questions
In this proposal the following basic research questions will be properly investigated and
answered accordingly.
 What are the challenges in the preparation and implementation of budget?
 What is the processes or system of budget preparaition established by the bank?
 what are the factors that hinders the effective and efficient utilization of budget?

1.5 .Objective of the Study

1.5.1. General objective
The general objective of the study is to investigate the budgeting processes and factors that affect
the effective and efficient utilization of budget in commercial bank of Ethiopia in Duna branch
1.5.2. Specific Objectives
 To identify the budget preparation processes or system established by the bank.
 To identify the challenges in the preparation and implementation of budget.
 To examine the factors that hinders the effective and efficient utilization of budget.

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1.6. Significance of the Study
The significance of the study will be helps to makes the reliable decisions by managers of the
bank, to create aware of active participation of all workers. The study will be monitoring the
manager to manage its responsibility
They will use the findings of the study feedback on the budget process, implementation,
preparation and changes. It will helps to take corrective action by the manager
The study will be laid down a starting point for other researchers in order to incentive study on
the budgeting and its impact.

1.7 Scope of the Study

The scope of the study will be restricted to assess budgeting and its impact on performance
measurement on commercial bank of Ethiopia on Duna branch the scope of the study is mainly
focused on budgetary affecting factors particularly commercial bank of Ethiopia. To come up
with effective research,. It would be better to limited the boundary of the study. If the research
will be conducted over all branch of the bank it is better. However, because of different situation
this finding will be conducted only one branch. It also better if the research will be touch all
passed years, but it is tried to touch only two years of them.

1.8. Limitation of the study

The research will have many problem, especially in the case of data collection there will be some
respondents won’t interesting to give true information that will be needed for the study. The
reason will be due to the confident of the information. In addition to this, the study will meet
time constraint, experience on the study of the research.

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 CHAPTER TWO
2. LITERATURE REVIEW

2.1. Definition of Budget and Budgeting

As to the Chartered Institute of Management Accountants (CMA), budget is defined as “a plan
quantified in monetary terms, developed prior to a defined period typically presenting the
planned income to be generated and expenditure to be incurred during that period and the capital
to be engaged for attaining a give objective.”
A budget is a numerical expression of a proposed plan of action which includes both financial
and nonfinancial aspects of the plan, and it serves as an outline to follow in an upcoming period
(Horngren et al, 2012).
On the other way round, Lucey (2003)defines budget as a qualitative statement, for a definite
Period of time, which may include intended revenue, expenses, assets, liabilities and cash-flows.
Thus, it is important for an organization to have a budget to know how much money it needs to
Carry out its activities and also forces it to be rigorous in thinking through the implications of
itsActivity planning.
Budgeting involves as a great range of interests and concerns. It is difficult to conceive any
public policy that can be carried out without money, and hence without becoming subject to
budgetary process. All countries, whether developed or developing would be engaged budgeting
and operate on a budget recognizes its invaluable aid in planning and form waiting economic
policy as well as check on its execution. Budget is used not only by government but also used by
private firms, business and various organizations, because it enables them to achieve their goals.

2.2 The objective and role of budgeting

Given that limited availability of resources as compared with competing demand, the process of
budget making assumes a critical role in decision making process of government in order to
optimize the use of existing resources. The paper of monetary of finance in Amharic vision of
Ministry of Finance and Economic Development (MoFED) states that the objective of the budget
in three aspects. These are allocation of resource, distribution of resources and stabilization of
economy
The first objective consists of allocating resources between the various function consumption and
investment that between the pubic and private sector. The distributional sector (objective)

5
necessitates the consideration of public expenditure and the income groups that are anticipated to
be served. It is the policy maker or government that decides who will be benefited how much
from the available resources among the society. This may by achieved by expenditure policies
such as, subsidies, pension or social welfare schemes as much as taxation on income and capital
Concerning the stabilizing role of budget, "budget plays very important role in the flow of funds
in the economy"As a result, budget can be used to control the danger of inflation by adjusting the
amount of governmental taxation and expenditure. Finally, budget plays an important role as a
tool of accountability, a means of management and instrument of plan of implementation HL
Bhatia (1980:pp246).

2.3 Budgeting procedures

There are several approaches of budgeting of which the following three are among the common
ones to be mentioned. The first one is incremental budgeting approach. Here, the existing budget
will be taken as starting point (or base) for developing the next budget .This will be the easier but
not necessarily the best. The second approach is Zero based approach (budgeting). This approach
puts much less emphasis on the past budget and focuses on what must be done to achieve
specific objectives. ZBB starts as new each year and therefore it is a more time consuming
process. Fressant J. Iydon and Ensert G. Miller (1978:pp255 ) strengthen this notion by saying 'I
ZBB usually involves more managers and takes more management time than the traditional
budgeting procedures". However, this approach has been appreciated for it gets rid of
unnecessary activities that budgeting often perpetuates.
The third one is program budgeting / master budgeting program!. It is plan oriented and consists
of three stages that include developing alternative for the future, analyzing what the outcome of
the alternative program might be, and relating the programs and policies on the future costs and
benefits, and lastly the actual performance of the chosen program must evaluated.
Therefore, master budgeting is a means that government expenditures are managed through the
comparative attempt of the program proposals of all government agencies

2.4. Relationship Between planning and budgeting

Planning signifies the strategies elements for selecting flows of action by a logical consideration
of resources to achieve policy objectives. It establishes program, set goals, objectives and makes
fundamental policy decisions for the economy.

6
(Slalim Hamid, 1998) writes: Budgeting analysis in detail, the many functions of activities that
the economy must perform the implementation of each program, analysis the alternative with
inEachactivity to achieve the end product and identifies the achievements of the established
goals and the associated costs’
‘To harmonize the budget with the plan, there must be a plan in existence, there should be on
annual plan with which budget could be harmonized, ….and there must exist at least a set of
short term targets and goals towards the attainment of which the budgetary decisions could be
oriented.
Therefore, budget and plans are concerned with policy analysis and allocation for resources. The
difference is that, in planning the economic aspects dominate, whereas, in budgeting more
attention is paid for financial aspects.

2.5. Performance measurement

2.5.1. Performance evolution concepts
Performance reporting for internal management use in an important part of a comprehensive
profit planning and control system. To indicate the extensive reporting requirements a business
requires and to focus on performance reporting. The following are an overview of financial
reports.
The first one is special external reports. Here, reports are submitted to government agencies such
as regulatory commissions, creditors, investigative agencies and other external groups. These
reports are extensive and comprise a considerable portion of the overall reporting. The next one
is reports to owners. It refers to the traditional annual report to the owners (to stock holders in the
case of a business) and other special reports got ready for the owners. These reports based on
generally accepted accounting principles.
The last category, the internal reports are those secret reports are prepared in the corporation for
internal use only. They do not have to meet the needs of external groups, nor the test of
“Generally accepted accounting principle”. This category of reports is subdivided in to three
different sub qualifications. These are statistical report, special report and performance reports.
All companies regardless of their size; have reporting requirements for all the categories listed
above. In small companies, most the basic reporting needs may be accomplished by using a
single general propose report; we are concerned specifically with performance reports. This

7
particular phase or reporting is an internal part of a comprehensive budget program. (Ginna
Welsch and etal 1997)
2.5.2. Performance reports and communication
Performance reporting is a crucial phase of the regulatory process. The control process can be
recapped as:
1. Approved plan (Tactical and strategic)
2. Feed forward (Planned objective and goals communicated)
3. Current controls (supervision, inspection, performance reports)
4. Feed back (Communication of different between actual performance causes identified)
5. Correction action (designed to reduce any unfavorable differences in routine results0.
(David. N. Hyuman 1996: pp 69).
In most business, management depends to a great extent upon information contained in reports
that serve as an important means of accounting information.
Communication involves that a person receiving the information understands the nature and
meaning of material in the report accordingly, clear communication leads to effective
management action and decisions that are likely to base on the facts. Reports the communicate
effectively to all levels of management stimulate action and influence decisions (Ginna, Welsch
1976). However, some times reports were not understood, recipients lacked time required to
grasp the meaning, or the content of reports was not relevant to problems facing the persons who
received them. (NAA Bulletin, Accounting practice report, No. 9, sec 3).
2.5.3. Using performance measurement to impalement corporate strategy
Well-developed, coherent strategies merit well developed, coherent performance measurement
system. There are integrated sets of performance indicators that links strategic objective to
functional tasks by focusing attention on the critical out puts required by the strategy.
All companies ought to be aware of the performance levels of their rivals both in absolute and
incremental terms. Bench marketing systems that compare internal performance with industry
best practice can provide not only important information for strategic planning but also a valid
insight for change. (Michael vitale and Salah C. Mavernae).

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2.6. Budget Classification
Budget categorization refers to the systematic ways of organizing budgetary data of both
revenues and expenditures. It offers the form and structure of the budgetary information that help
analysis and inference. Budget classification is one of the essential points to be beard in mind for
the budget to attain its goals more efficiently and effectively. Three general importances’ can be
gained if proper budget classification is intended. These include:
1. Budget classification play’s a significant role to maintain accountability and fix
responsibility to specific organization and even persons in a unit it the account define
responsibility accurately and precisely.
2. It offers a means of evaluating performance by alleviating comparison between actual
result and the level of funding found in the budget.
3. It provides means of controlling resources because authorized spending limits are
established in the budget. (Codinald Axelred, 1989).

2.7. Types of Budget

Budget as a process and a system has different features and applications. Even through many of
them have common feature, they also manifest significant differences. Since budget express
plan and an organization may have a large verity of plans: there are many type of budget. The
classification of budget based on their nature, coverage of function, characteristics of activity,
period and flexibility.

2.7.1. Program Budgeting

Program budgeting does not have a standardized definition because of its encompassing nature.
Its many aspects include concepts, systems and process, technique and format, and in some cases
almost a management philosophy. Essentially, it is a management decision making system that
tries together strategic and long range planning with conventional budgeting and supporting
analysis so that an organization can most effectively assign resources to achieve both its short
and long range objectives. It utilizes a planning and budgeting process in an output oriented
program format, which is oriented to its objective to facilitate developing and evaluating
alternative. This process ultimately leads to an allocation of resources over a planning period.
This is then a basic for constructing a resources (man power), materials, facilities (including

9
equipment), and capital, which operate together to achieve a set of common objectives with in a
planning period. (Anthony Robert 2004: PP 366).
2.7.2. Zero Base Budgeting (ZBB)
This type of budgeting is similar to planning programming and budgeting. The most basic
concept behindZBB is that all programs and expenditure are evaluated every year. Another zero
base budgeting is that the responsibility, to present and defend program. The principal’s
advantage of zero base budgeting is that each type of cost incurred in every budget period will be
justified.
Its advantage falls in to the hands of mangers of respective institutions. More over according to
the method of zero base budgeting “decision packages; have to be
developed. They key to be zero base budgeting lies in the identification and evaluation of
alternative. This is favorable by ranking of decision package, the most crucial stage in the
application of this method. Despite the obvious advantage of ZBB, it has disadvantages.
 Given enough time and man power, there would not be controversy on the application of
zero base budgeting.
 However, if such problems exist, reviewing all programs every year would be bulky and
sometimes important.
 Another more serious problem is the ranking of problems.
 If there is in to way to continue with that inefficiency
 Activity in the future. (Anthony Robert 2004: PP 300)
2.7.3. Activity Based Budgeting
If focus on the cost of activities necessary to produce and sell product and services. It separate
indirect cost in to separate homogeneous activity cost pool. Management uses the cause and
effect criterion, to identify the cost driver for each of these indirect cost pools comes up with the
following merits of activity based budgeting.
1. Ability to set more realistic budgets,
2. better identification of research needs,
3. Clear or linking of costs with staff responsibility and
4. Linking of cost to output.

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Conversely, it is tiresome and time consuming to determine the demand for each individual
activity based on output budgeted, production, new product development (Anthony Robert 2004:
PP 309)
2.7.4. Incremental Budgeting
In this case the previous budget is considered as a base. The former budget figures can be
increased or reduced based on situations, particularly on the volume of activity of the
organization planned to be preformed. These types of budgeting simplify the preparation of the
budget because it needs adjustment of data from the budget that had already been prepared.
However, incremental budgeting is not without drawbacks, particularly because the past period
budget may include in efficiency. (Anthony Robert 2004: PP 321).
2.7.5. Master Budget
It is a budget that summarizes the financial estimates of the entire organization’s individuals
budget. It helps achievement of long range plans year by year steps)
The guidance is more specific for h coming year than it is for more distant year. The plan for the
coming years is called master budget. The master budget is also known as the static budget, the
budget plan or the planning budget. The master budget indicates the sales level, production and
cost level. Here, income and cash flows that are anticipated fro coming year.
2.7.6. Variable Budget
The primary purpose of this type of budgeting is to accelerate control. Glevene, Weish 1978:218)
identifies three specific benefits of variable budgeting.
 To help development of departmental expense budget for insertion in the profit plans.
 To give examples, goals for the managers of responsibility center during the period
covered by profit pan and
 To offer adjusted budget allowances fro comparison intention in the monthly report.
2.7.7. Fixed Values flexible Budget
Fixed budget is a budget fro a specific or fixed total amount that many not be exceeded due to
changes in the demand for goods and services. It is most appropriate when changes in the
amount of goods and services obtainable directly affect availability of resources and expenditure
needs. (IAIN, Maritaland, 1997: PP 301).

11
2.8. Government Budget
In governmental entities, budget services as a tools of managing resources to attain programmed
objectives. It serves as instrument from the legislative body to ensure whether actual
expenditures are corresponding to budgeted amounts and that the objective and levels of activity
envisaged in the budget are attained or not. As well, to obtain a share in government resources
allocation, preparing and submitting budget proposal is expected from each government entity.
Moreover, governmental budgets are legally binding upon the executive body and once fixed by
law, they are usually unalterable without much effort.

2.9. International control systems

The council of minister’s finical regulation No. 17/1997 defines internal control systems as:
“The plan of organizational and all the coordinated methods and measures adopted by
management to safeguarded assets ensure the lines, accuracy and reliability of accounting data,
promote operational efficiency and maintain adherence to regulation and directives.”
Strong system of internal control is very essential in achieving certain goals of an organization.
Internal control includes all the procedures and actions taken by an organization in order to
manage the expiating assets, ensure conformity with organizations policy and governmental
rules, evaluate operating efficiency and ensure precise and reliable operating data and accounting
records.

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 CHAPTER THREE
3. RESEARCH METHODOLOGY

3.1. Research design

The research will have been conducting on the base of descriptive research type by use
descriptive method. The study will investigate the current status of budgeting performance and
describes the real situation based on findings. The researchers design would be an arrangement
of conditions for collection and analysis of data in a manner that aims to combine relevance to
the research design is the conceptual structure with in which research will have conduct; it
constitutes the blue print for the collection measurement and analysis of data.

3.2. Research approach

The research approaches are plan and the procedures for research that span the steps from broad
assumptions to detailed methods of data collection, analysis, and interpretation. The overall
decision involves which approach will have been used to study qualitative and quantitative
approaches. The researchers will be use qualitative approach because which is depending on the
attitudes, opinions and behavior.

3.3. Data sources

The researchers will have been making use of both primary and secondary data sources. From
primary sources the researchers will be make use questionnaires and interviews. From secondary
data the researchers will have been used from clients file, book and other written manuals.

3.4. Method of data collection

Both primary and secondary data are will be collect through design and structure collection
method. The primary data will collect by use opene and ended questions and interview from
related or respondent/parties either from the office manager of the bank and from customers of
the bank. The secondary data will have been collect from different sources like, document of the
bank prepared by head office of the bank and from other sources.

13
 3.5. Target Population and Method of sampling

The total population of the study employees of the bank such as branch manager, Cashiers,
secretary and customer service .employees. The researchers select as a sample all employees,
Because the target population small in numbers. The researchers used census sampling method
because these methods help to collect relevant information from the employee, which is, based
on the educational level, experience and knowledge. It is also important to get detail information
that improves the quality of the study.

3.6. Sample technique

The sampling technique for this study will have been use judgmental sampling technique for
different respondents. The researchers used judgmental sampling technique because to get
relevant information from employees of the bank depending on their knowledge and experience.

3.7 Data analysis

Editing, Coding and tabulation will be use analysis data. Editing will be used involves the
inspection of questionnaires on a raw data and necessary for each questions and defecting the
most glaring omission in accuracy detail.
Coding is a technical procedures by which data will be categorized through coding the raw data
to transferred in to symbolic usually numerals. They will be tabulated and counted. This can by
specifyingthe categorizes in to which remains to be place. The number will be depend up on the
number of question on the questionnaires. Coding is open ended questions. This will be done
through developing consistent set of standards to each question.
4.1. Work plan
The time framework in which activities will be started and finalized are explained in tabular
form as the following. This schedule is only to show the advisor how to plan to do the
research and not for doing the research strictly.
Year 2015 E.C
Months December January- March June July August
February
Activities Finalization Literature Study Data Data Drafting

14
 of proposal review tool collection entry, and
develop cleaning presentation
ment and of thesis
analysis
Table .1: Work plan schedule

4.2.Budget Breakdown
To conduct viable research, it requires available budget. The researcher is planned to minimize
costs as much as possible and to the best of this understanding it will worth 1500-2000
Ethiopian birr. The details of the proposed research budget usage are presented below.
Table 2: Budget used for the research
No Activities Budget breakdown

1 Data collection 700 E.B

2 Making analysis 300 E.B

3 Organizing the 250 E.B

Research

4 Finalizing the research 400 E.B

TOTAL 1650 E.B

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 ANNEX I
This questionnaire is designed primarily for soliciting information. Which will be used in
writing up senior research paper entitled “Budgeting and its impact on organizational
performance of commercial bank on Duna branch.
So you are kindly requested to give the right answer you thin, since it contributes a lot for
the success available of this study. And the final result will be available to you up on your
request so that it may be valuable information regarding the issue of being researched
since it offers afresh and independent observation.
We would also like to forward our thinks in advance for your corporation.

N.B.
- There will be no need of writing your name
- Make a tick in the box, which you think is an appropriate response
- Employees of the bank should fill this questionnaire

I. Respondents profile
Sex፡ male 5 Female 5

Qualification: BA degree 5 Diploma 5 MS degree 5 PHD 5

Current position ________________________
Question 1. Do you use a budget? Yes 5 No 5
2. If your answer for Q1 is yes what type of budget do you use?
Flexible 5 Fixed 5

3. Who is responsible to prepare budget?

Financial department5 Management department 5
Board or director 5 all of together 5
Other bodies _________________________________________
4. Does all branches prepare their own budget ad take responsibility at end

16
 Yes 5 No5
5. What problem face on preparing of your budget?
Specify ________________________________________________________
6. What procedure you follow to prepare budget?
Specify ________________________________________________________
7. for how long the budget you prepared it run?
For month 5 For three month 5 for semi annual 5
For year 5
8. How many time do you prepare a performance report in a year?
Every month 5 every three month 5 every six month 5
every year5
9. Does the bank effectively implement its budget?
Yes 5 certainly 5 no 5 many years 5 neutral 5
10. Does variance occurred when you compared the budget with actual
Yes 5 No 5
11. If your answer for Question No 10 is yes specify the reason for the occurrence of
variance __________________________________________________
12. If your answer for Question No 10 is yes does the variance fair
Yes 5 No 5
13. If variance was occurred when did take the measure action?
Immediately 5 3 month later 5 Six month later 5
At the end of year 5
14. When their variance is fair or unfair please specify certain points the impact of your
performance
15. How was the profit budget compared with actual?
Good 5 very good 5 moderate 5 no satisfactory5
16. How was the cash budget compared with actual?
Good 5 very good 5 moderately 5 No satisfy 5
17. How was the balance sheet budget as it compared with actual?

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 Good 5 very good 5 moderately 5 No satisfactory 5
18. When you compare cash budget with actual which year more successful for you?
19. Which type of budget system is more preferable for you?
Flexible 5 Fixed 5 other 5
20 Do you have customer handling system?
21. Do you have a system to measure customer satisfaction?
22. The bank concern about retaining your customer and increase your customer volume?

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 REFERENCE
Alan Pizzey, Cost and Management Accounting 3rd edition
Bruns, Wj & Waterhouse, Jh, (1975). "Budgetary Control and Organization Structure," Journal
of Accounting Research, Wiley Blackwell, vol. 13(2), 177-203 Factors of employee mobility.
Pp. 282 -291.Personnel Review
HiltonMahar, Salto, (2002) CostManagement Strategies for Business Decision, Megrail
publication, (2002) New York.
Horngren, Rajan, & Dater, D. (2012).Cost accounting: A Managerial Emphasis, 4thEd.
Institute of Cost and Management Accountants (1998): Financial Operations in
Developing Economy
Libby, T & Lindsay, R.M.(2003) :Budgeting and unnecessary evil CMA Management Vol.
77, issue 1,p. 30-34(Part 1).
Lin &Chang (2005). Goal orientation and Organizational commitment as explanatory
Lucey T (2003). Management Accounting, 2nd Ed, London Continuum International Publishing
group
Michael Grand of 2007
Montgomery Phil (2002),: Effective rolling forecasts. Strategic Finance, Montvale, pp.41-44.
Ronald W.Hilton Managerial Accounting 4th edition

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