CASE STUDY

Case study

Case study

Companies that win big today play by distinct rules. Somehow, they still have to keep score on whether they're building for future growth or living on past accomplishments. What is particularly interesting about companies that change the game is that they often find new ways to measure their performance. There are two types of command, namely budgetary and financial. The following case that we are about to discussed concentrates on budgetary control only. Budgetary command is characterised by the Institute of Cost and administration Accountants (CIMA) as: "The establishment of allowances pertaining the responsibilities of bosses to the obligations of a principle, and the relentless evaluation of genuine with budgeted results, either to protected by one-by-one action the objective of that principle, or to supply a basis for its modification" ;Budget is basically a prescribed declaration of the economic assets set apart for bearing out exact undertakings in a granted time span of time. It assists to co-ordinate the undertakings of the organization. An demonstration would be an advertising allowance or sales force budget. Budgetary control, on the other hand, is actually a control technique whereby actual results are compared with budgets. Any dissimilarities (variances) are made the responsibility of key individuals who can either workout command activity or modify the original allowances. A good budget is characterized by the following: * Participation: involve as many people as possible in drawing up a budget. *Comprehensiveness: adopt the entire organization. *measures: groundwork it on established standards of performance. *Flexibility: permit for altering circumstances. *repsonse: constantly supervise performance. *investigation of costs and incomes: this can be done on the basis of merchandise lines, agencies or cost centers. Of all business activities, budgeting is one of the most important and, therefore, it requires detailed attention. The case study will provide us an indication and explanation of the importance of budgetary control in marketing as a key marketing control technique, the advantages and disadvantages of budgeting and also an appreciation of the uses of budgets.

Resort, which is situated in a tourist area in north Malaysia, operates guesthouses. The fee charged to Ceria's guests includes both accommodation and all meals. The management of Ceria applies strict financial control of its activities in consideration of the competitiveness of the industry and the seasonal nature of the business. The performance statement shown in this case was for the month of September. In this month, the number of guest days increases due to vacation package promoted by tourism organizations in conjunction with the campaign of "Cuti-Cuti Malaysia", school holidays and foreigners coming to visit from other countries. In positions like this, the management should have been more cognizant of the market demand for its services and products. (Halima Nashra 2002 Pp. 120) We can glimpse that the facts and figures given in this case displays the distinction between genuine edge and budgeted edge of the presentation statement. It is inappropriate to just compute the costs of only one month in making the judgments on ...