ORIOLE FURNITURE, INC

Case study: Oriole Furniture, Inc



Case study: Oriole Furniture, Inc

Your views of the budgeting process as it is currently practised in his division. You should include in your discussion an evaluation of the current process against the advantages and limitations of budgeting typically discussed in the budgeting literature, including consideration of behavioural issues.

Oriole Furniture, Inc. decided to enrich its budgeting process focused results. As head of Corporate Services, responsible for human resources, marketing, communications, fundraising events, government relations, and international services, he asked his staff to prepare budgets for practice for next year - but these estimates only provide an appendix necessary. She wanted the body of his plan to focus on key performance challenges identified by the leaders of Corporate Services and the fundamental objectives based on the results to succeed in the challenges. (Nelson, 1991)

For each performance challenge, leaders were asked to specify one or more objectives based on the results, and the main activities required to achieve those goals. For example, knew that the marketing necessary to build strategic alliances with companies. But instead of focusing on the budget and staffing requirements, wanted marketing to articulate one or more objectives based on results on the number and timing with which these partnerships will be established and the specific impact of each relationship they have. (Alan, 2007)

Also, instead of shoes Horning all targets and comments in months, quarters and year-end, people were asked to nominate appropriate checkpoints deadlines for success. And they were to indicate how each performance challenge supported the mission of the organization. (Nelson, 1991)

Using the data described above the accountant, George Jeffrey, prepared the Rattan Furniture Division's profit plan. The result was an estimated operating profit of $22,720,000 on a sales volume of $77,010,000. This plan was submitted to Mr. Mensan, the company president, right on schedule for his review. (Generally, this review occurs three months before the start of the budget year). When Mensan reviewed the division's plan in relation to the specific sales and profit goals that he had established for the company as a whole, the combined plans of the four divisions did not meet his profit expectations. In a heated discussion with Mensan, Mente agreed to revise his division's sales up to $81,060,000 and operating profit to $23,900,000 (Exhibit 1). He had no real plan for reaching the new sales budget, but he realized that Mensan was not going to relent in his adamant push for continued sales growth at least equal to past levels. Thus, he agreed to upward revision, trusting that he had time to figure out how to get the division to that level. (Nelson, 1991)

Mente's relatively new division has always been fast growing and highly profitable. Therefore had no experience in managing during a downturn in sales. He realized, however, that he had to come up with a plan to achieve the objective of the division of profits. One idea was considering delaying the purchase of new machinery that was scheduled for delivery ...