Overview
Instructions: Please review all three Articles, and provide a general review of the students response to the article. Three Articles: 100 - 150 words per article
Article One
Subject: "Budgets: How They Are Planned, Prepared, and Managed"
Link: Budgets: How They Are Planned, Prepared, and Managed
Summary
The article "Budgets: How They Are Planned, Prepared, and Managed" provides a detailed examination of the process of budget planning and management, with a particular focus on healthcare professionals (Nguyen & Gregory, 2023). It begins by outlining basic budgeting principles, emphasizing the importance of understanding revenue, expenses, and financial forecasting. A key feature of the article is its step-by-step approach to budget creation, which includes determining the appropriate size of the budget, setting realistic financial goals, and allocating resources efficiently. The article also discusses common budgeting errors that healthcare providers often encounter, such as underestimating costs or failing to monitor financial performance regularly. Strategies to address these challenges, such as frequent budget reviews and adjustments, are highlighted. The article is particularly valuable for healthcare professionals, such as clinicians, faculty, and private practitioners, who need to manage their finances more effectively in an ever-changing economic environment.
Reaction
I found the article to be highly informative and practical. Its straightforward approach to budget management is easily adaptable for anyone in a financial management role, particularly in healthcare settings. I particularly appreciated the emphasis on avoiding common budgeting errors, which I believe is a common challenge for many professionals. This article not only teaches the theoretical aspects of budgeting but also provides actionable steps for improving financial decision-making. By applying the strategies discussed, healthcare professionals can enhance their financial stability and resource allocation, which is essential for running a successful practice. This resource has broadened my understanding of budgeting in a clinical setting and reinforced the importance of strategic financial planning.
References
Nguyen, T., & Gregory, A. (2023). Budgets: How They Are Planned, Prepared, and Managed. PubMed Central. Retrieved from https://pmc.ncbi.nlm.nih.gov/articles/PMC11219134/
After years of utilizing a cost system considered fair by workers and management, Miller Manufacturing is now operating under revised, and much tighter, budgeting standards. The changes were brought about by a new company controller, Kate, who made the new budget with little input from members of the Miller staff.
Given these abrupt changes, and the fact that they were determined without feedback, the line workers and managers may exhibit negative behaviors such as resentment, resistance, and low effort to achieve the targets. This may be enhanced if Kate is seen as an outsider who lacks knowledge of the company’s values and operations.
To mitigate any negative behaviors, Kate could engage in participatory budgeting. Although it is a more time-consuming process, this type of budgeting would give Kate a better understanding of company operations and employees’ perspectives on completing their work. Participatory budgeting aligns the goals of all levels of an organization and provides an increase in ownership to achieving the goals (Schmidt, 2024). By allowing for multi-level input and collaboration, multiple perspectives can be heard and addressed.
The tighter standards could have a positive effect on employees’ behavior by motivating them to perform more efficiently. There is a chance that some budgetary slack was present in the original budget and Kate’s tighter standards may inspire creativity and collaboration within the departments to meet their new budgets.
New standards are more likely to have been embraced if line workers and management had participated in the setting of the new standards. Allowing employees who are performing the work to have a voice in the budgeting process increases buy-in and performance. At a minimum, a clear explanation of how the budget was derived as well as any changes in expectations should be communicated to encourage engagement and ownership in achieving organizational goals.
Reference:
Schmidt, J. (2024, July 6). Participative budgeting. Corporate Finance Institute. https://corporatefinanceinstitute.com/resources/fp...
Case 5.37
- Tightening standards, particularly for labor and materials, can lead to negative reactions from both managers and workers. Managers might feel frustrated or unmotivated if they are pressured to meet unrealistic goals or lack the flexibility to handle real situations. They may focus too much on enforcing strict rules rather than improving teamwork or solving bigger problems. Workers could also feel that the new expectations are too high or unfair, leading to lower morale, more stress, and higher turnover if they believe the goals are impossible or if they feel blamed for things beyond their control. Workers might even hide issues or take shortcuts to seem like they’re meeting the standards, which could hurt the overall quality of work.
- To reduce negative reactions, Kate could involve employees and managers in setting the new standards. Explaining why the changes are happening and how they can be realistically achieved would help get everyone on board. Providing proper training, resources, and ongoing support would make employees feel more confident and motivated. Kate could also introduce reward programs based on meeting achievable goals instead of focusing on penalties. Additionally, creating a code of conduct would set clear expectations for behavior, encourage accountability, and promote a positive work culture.
- While tight standards can sometimes lead to negative behaviors, they can also have a positive effect when applied thoughtfully. When employees are aware that the standards are achievable and are part of a well-supported system, they may feel motivated to improve their efficiency, problem-solve, and innovate in ways that drive performance. Clear standards can create a sense of purpose, making employees feel they have a clear target to aim for. When accompanied by fair recognition and rewards for meeting these targets, tight standards can foster a culture of continuous improvement.
- I think management should have played a key role in creating the new standards, alongside input from representatives of the general workforce. Management’s responsibility would have been to ensure that the standards complied with all relevant government regulations, helping to protect the company from legal issues. On the other hand, having an employee representative involved would have been essential to ensure that the new standards didn't create excessive pressure on the staff. This representative would also have helped communicate what the workers could expect in return once the new standards were put into place.
The budget Kate presented, based on tighter standards, could have both positive and negative effects on Miller Manufacturing. In the short term, tightening the standards could lead to immediate cost savings by improving efficiency in labor and materials, which would reduce waste, lower costs, and increase profit margins. This could help meet financial targets and give the company a competitive edge. However, pushing employees too hard to meet tight standards could lead to a decline in product quality, as workers may prioritize speed over accuracy. This could damage customer satisfaction and the company's reputation, potentially leading to increased warranty claims or returns. Additionally, managers may face challenges in enforcing the new standards, possibly focusing too much on meeting targets at the expense of fostering teamwork or addressing broader operational issues. While the focus on tighter standards may lead to increased innovation in the company, such as using new technology or streamlining processes, it must be balanced against the risk of sacrificing quality and employee satisfaction. To avoid these risks, Kate should ensure the standards are realistic, involve employees in the decision-making process, and create a supportive work environment that encourages open communication and feedback. Implementing a code of conduct could also reinforce expectations, enhance accountability, and help build a positive, cohesive company culture.
Reference:
Davis C. E., & Davis E. (2020). Managerial Accounting, Enhanced eText (4th ed.). John Wiley
& Sons. ISBN-13: 978EEGRP40373