By Roy Anderson (auth.)

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The 'budget' is a financial plan which contains estimates of revenue and expenditure on business activities in the forthcoming financial period. The shape of the plan will be determined by the overall objectives, and the financial estimates contained in budgets will incorporate cash flow, cost control and profit elements as well as reflecting the profit or expansion aims. The concepts and application of budgets are examined more fully in chapter 5. Achievement 22 Management, Information Systems and Computers of budgets as a financial objective means a successful fulfilment of financial plans within which all the operating activities are determined.

The return to an investment does not have to be in cash or necessarily in any tangible form, although an appraisal is obviously difficult if such benefit cannot be quantified (see chapter 13). Reconciling Financial Objectives Any business is likely to have financial objectives under all five of these headings because these all reflect necessary aspects of financial control, whatever overall objectives the business may have. In practice one or other may be dominant but, like overall objectives, any attempt to identify clear-cut financial objectives immediately raises the question of overlap.

Decision Making in Organizations, Longman, 1977. , The Practice of Management, Heinemann, 1955. Savage, C. and Small, J. , Introduction to Managerial Economics, Hutchinson, 1967. Torrington, D. , The Business of Management, PrenticeHall, 1985. 3 Management and Decisions Functions of Management In order to achieve the objectives which have been declared necessary to the business purpose, decisions must be made. Making these decisions is an essential function of management. The decisions which determine the objectives in the first place are, of course, a primary responsibility of management at the highest level.

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