The Role Of Budget And Budgetary Control On Organisational Performance: A Case Study Of Tahir Guest House, Kano State, Nigeria

Cite this:
Rabiu, A. S., Goni, K., Alhaji, A. M., & Aliyu, M. T. (2015). The Role Of Budget And Budgetary Control On Organisational Performance: A Case Study Of Tahir Guest House, Kano State, Nigeria. Journal of Business Management and Economics, 3(4). https://doi.org/10.15520/jbme.2015.vol3.iss4.72.pp
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Abstract

Budgeting is an indispensable tool in the hospitality industry-which has profit maximization as its goal and this can only be realized when resources are properly planned and controlled with the required commitment and expertise. Hotel accommodation in Nigeria is facilitated mostly by the corporate sector, with booking for conferences and meetings demand being highest. Whilst there has been rapid growth in the Nigerian hotel industry in the last decade, it is still in its infancy as the National Bureau for Statistics (2013) posited that the hotels and restaurant sub-sector contributes a mere 0.55 per cent to the Gross Domestic product (GDP). However, the major reason for this insignificant contribution to the GDP has been linked to poor budgeting process and internal control within the players in the industry. This paper therefore researched into the role of budget and budgetary control on organizational performance: a case study of Tahir Guest Palace, Kano. The study made use of both the primary and the secondary data. The instrument for the collection of the primary data was the questionnaire administered, while the secondary data was obtained via the financial statements of Tahir Guest Palace from 2007-2012. A total of 278 staff was sampled using the purposive sampling technique, and data obtained was subjected to regression analysis.Result revealed that budget administration, budget target setting and budget process all have significant impact on organizational performance. The research work therefore, recommendthat;(i) the top level management of Tahir guest palace should maintain appropriate standard on budget administration and preparation, and budget process. Specifically, the use of the current budget process on previous budget performance should be emphasized in measuring performance year in year out, as this will enable the management to monitor the organizational growth and or performance as budgeted; (ii) the staff of various cadres at Tahir guest palace should also be allowed to participate in the budget target setting and process to further enhance the organizational performance. If the above recommendations are implementedit will not only increase the organizational performance of Tahir Guest Palace but will also lead to increase in subordinates efforts and task performance.

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