| dc.description.abstract | Budgeting Systems and Corporate Performance: A Case Study of Taiwan′s Listed Server Manufacturing Companies
Abstract
The budgeting system is one of the core tools in contemporary corporate management, serving not only as a vital aspect of financial management but also as a crucial means of business planning. Therefore, the level of managers′ involvement in budgeting is also a key reference indicator for evaluating managerial performance.
Although previous studies have demonstrated a significant positive relationship between managers′ involvement in budgeting and management performance through survey methods, they lack quantitative financial data support. This study takes Company A, a listed server manufacturing company in Taiwan, as a case study. It measures management performance by operating profit and defines the variance between actual and budgeted revenues/expenses as the proxy variable for ＂managers′ involvement in budgeting,＂ thereby exploring its impact on management performance.
The research findings and operational recommendations for the company are summarized as follows. Firstly, if Company A can effectively reduce material costs, it will positively impact the company′s operating profit, with regression analysis results largely aligning with the hypothesis. Secondly, increasing sales revenue can enhance the company′s operating profit. However, if the deviation between actual and estimated revenues is large, it will negatively affect operating profit and reduce the accuracy of profit forecasts. Therefore, the sales department should ensure the accuracy of revenue estimates, set higher budget targets, and strive to meet them to improve the company′s operating profit. Thirdly, in terms of manufacturing and operating expenses, the regression analysis results are only partially significant and often contrary to expectations, indicating that managers need to strengthen their control over budgets and the allocation of actual expenses. Finally, since the control of budgets by departmental managers affects the company′s operating profit and its forecasting, the company could consider using this as a reference indicator for evaluating managerial performance and provide relevant training to enhance their budget management capabilities.
Keywords: Managers′ participation in budgeting、Implementation Status of Budgeting、Budget control | en_US |