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THE WORLD OF CONSTANT CONNECTION \\ 2(90)2021

ijĺŅ őĶń ĺŃĶņĶŇń ĺIJ ľĿij ĺŃŊĶņ IJŃ Ķij IJ                   EVALUATING BUDGET EFFECTIVENESS

‫ڛڊڍڊ ڔڑڊ ږ ښڒژڍڊ ږڎڍ ڕڊښڑڗښ ڐ ڊڒڏڊڌڊڔ ڨڊ‬          Now let’s see if our budget is running a tight ship:
‫ڛڋڎږڊڤڗڕڊڔڝ ڋڎښ ڛڒ ړڊڍڎڐ ڛڊڕڒ ڜڎک ڝڒڋڛڋڎڔڝښ‬
                                                                     x The budget lists static goals, and success or
x ‫ڒڋڎږ ڐڒڕڒښڝ ړڒڜڊڜڛڊڒ ڔڒ ښڎ ڦڊڌڒڢ ڜڎک ڝڒڋ‬           failure in achieving these goals does not stand
   ‫ڊ ڛڎڢڊڋڗ ڔ ڏڎڦڠ ڝڒڕږڊڊ ڏڎڦ ڠڒڕڊڑڔڎڕڗښ‬             IRUHᎱHFWLYHRUSRRUSHUIRUPDQFHUHVSHFWLYHO\
   ‫ڛڏڊ ږ ڢڒږښڊڛڊڋ ڗڊڢڝڕڍڝڤږڊڌ ښڊړڍڊڛڒ ڕڊڋ‬              The budget gives us quantitative indicators as
   ‫ڗ ڍ ښڊڞڊڍڒښڝړڒڕڊ ږڒڍڑڒڋڎ ڔڒ ڤڊڌڒڋڎږڐڒڕ‬              formal goals, while neglecting the qualitative
   ‫ڎږڐڒڕښڝڔڊ ڕ ښڗڞڒ ڜڎک ڝڒڋڛڗڡڒڊڍږڝڒ ڑڒڋ‬               aspect. Thus, management is pushed to work on
   ‫ڛڏڊڨڊ ڛڒڏڌڛڋڎ ڔڋڎ ږڎڏ ڣڊڕڏڒ ښڋڗ ږڎڍ ڗڊښڍڊڋ‬           achieving quantitative indicators at the expense
   ‫کڎ ږڎڕڛڞڗڡ ڔڎڋڎڔڝڌڝڛڏڒ ښڋڗڨ ڛڒ ښڊڨڊڍ‬                 of “forsaken” qualitative measurements, which
   ‫ڛڒ ڋڎ ڌڎ ڍڎڢڒ ڏڒ ښڋڗ ږڎڍ ڗڊښڛڋڎڌڥڒڋڝڛڜږڎڕ‬           are growing especially important in light of
   ‫ڑڎڒ ڔڋڎږڝڤڊڕڗ ڜڒڕڊڊڍڛ ڗڊڢڝڕڒڎ ڐڊ ڏڎڦڠڒڕ‬              increasing competition. For example, one may
   ‫ڊڨڒڔڒږڎ ڣ ښڊڍ૿ڍڗ ڋڎ ڠ ڍڊښڝڡڝଁڊ ڋڎڍ ږڊڒڐ‬             push clients into buying something they do not
   ‫ڊڛڍڊڑڒ ڔڊ ڌڊڕڒڋڎ ڔڋڎ ږڎڏ ڣڊڕڒ ڏڒ ښڋڗڨ ڛڒښ‬        really need, just to reach sales targets; as a
   ‫ڍڊ ڏڎڦڠڊ ڛڒڕڛڒڋڗ ږڎڍ ڗڊښڛڒ ڋڎ ڏ ڍڒ ڡڊڌڎږڐڒڕ‬        result, we may lose unhappy customers and pay
   ‫ښڊڛڊڕڤڊښڛڒڤڊڍږڝڑڛڜ ږڎڒڔړڗ ږڒ ڍڒ ڡڊڏ‬                   dearly later to win them back.
   ‫ڎڒڔړڒڔڝڋڎ ږڎ ڡڦڊ ږڊڌڍڊ ڌڎ ڍڎڢڊ ڋڎ ڍ ښڒڧڛ‬
   ‫ڒ ڛڒڕڊڍڑڗ ڌښڊ ړ ڏڊڍڔڊڏڨڊڗڔڥڊ ڛڎڢڒڜږ‬              x To be on the safe side, employees involved
   ‫ڊڌڤڒڋڎڔ ڕڗښڛڎڍ کڒڏ ڌڊڍڒ ښڒڏڥڊڋڎږڝ ښ ڋڊڍ‬           LQGHᎲQLQJWKHEXGJHWDUHWU\LQJWRGRZQVL]H
   ‫ڑڝړڊڛ ږڊڌڒ ڢ ڋڎڋڗ ښڒژڛ ڒڒڤ ږڎښڝړږڗړڒ ڔڒ ڍښڐ‬     projected revenues and upsize expenses.
   ‫ڊڒ ږڊڏڗڔڎ ږ ڏ ڢڒږڕڑڒ ڋڎښ‬                                   Consequently, the estimate is less realistic, and
                                                                        WKDWXQGHUPLQHVRXUᎲQDQFLDOSUHGLFWDELOLW\
x ‫ڕڗ ښڢڕڊ ږڊڑڒڔڝ ڑ ښڊڣڒڢڊ ږڎ ڌ ڍڎڢڛڒ ڜڎک ڝڒڋ‬
   ‫ږڎڋڗ ڔڒڍڤڑڒږ ڐڒڕڛڒ ڏڎڏڠ ڐڊڍڛڒ ڏڊڑڒڋڎڔ‬           x If the budget is executed by the end of a
   ‫ ڕ ڒڊڍଁڒ ک ښڊڨڒ ڜڎڕڊڍڒ ڔڊڏڊڛڗ ڕڎڢڒڋڎڔړڊږ‬           JLYHQ\HDUWKHWHDPVODFNHQVRᎱDQGWHQGV
   ‫ڛڒ ڔ ڊڎښڍڊڋڎڔ ړڊږڒڐڗږڌڗښژڝږڊ૿ږڗ ڤڒړڜ‬                to underwork. The same happens when
   ‫ڛڊڋڗڍڊ ڜڎ ښ ڏڧږڊڌښڝڛږڊ ږڒڞڛږڎڏڣڤڊښڊڒښڝڜ‬             budget execution is botched — the team loses
   ‫ڛڋڎږڒ ږړڊ‬                                                         motivation, thinking that things are going from
                                                                        bad to worse, and the budget is doomed. And
x ‫ڊڒڔڝڋڎڔڝښ ڛڎڢڒ ڜڎک ڝڒڋږڎړڛڗ ڔڗڋڛڒڔڦڝڑ‬               now they are trying to save their ideas and
   ‫ڑڒڏڎڕڨڛڒ ڔڊڥڒڋڎڔ ړڊږڊڍڊ ڋڎڍ ږڝڍڒڍږڝڌ‬               HᎱRUWVQHZFRQWDFWVFOLHQWVIRUWKHQH[W\HDUૼV
   ‫ڒ ڜڎک ڝڒڋڝڑڊڊڋ ڗڎښڊڕڗ ڌڍڕڎ ڏڒڌڒڛڋ ڗڊڢڝڕ‬            budget, a move detrimental for the organization.
   ‫ڛ ڊڒ ڤڊ ڏڒڜڗڕڛڏڊ ڌ ښڊړڒڍ ږڝڌڊ ڋڎڍڔڝښڛښڎڏ‬
   ‫ ڝڒڋڊڏڗ ڕڊڌڒ ښڎ ڞڊښڊڤږ ڒڊڕڛڋڗ ښ ڟڒڞڊڍ‬             x $VLPLODUᎳDZSUHVHQWVLWVHOILQWKHIRUPRI
   ‫ڊڥڊڍڒ ڋڎڎڍڒڛڋڗ ڔڒڍڤڊڒڔڝ ښڒڦ ږڊڌڒ ڜڎک‬                 the so-called calendar problem. In the early
   ‫ڒڋڎڜ ږ ڎڒڔړڒڋڎ ڜ ڟڊښڜږڗړڒ ڔڊڨڊڊڏڎڕڨڛڒڔ‬         operational period, the team is relatively laid

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