ADMS 1500 Lecture Notes - Balanced Scorecard, Reward System

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Budget enables budgetary control used as an objective or standard. If the budget in question is a budget for the whole organization, then the bottom line will be a budgeted profit. In order for the budget to be an effective control, it has to have validity (all people involved have to accept it) Reasonable assumption that you can hold someone responsible for things they can control, but should not hold them responsible for things over which they have no control. Each manager has responsibility area within which his or her decisions affect the outcomes can be held accountable for those outcomes through the control process. Control in revenue centres: responsible for making sales; success/failure may be judged by the difference between budgeted & actual sales. Control in a cost centre 1: service departments: provide services & expertise to the rest of the organization (eg: hrm)

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