The Goal Setting of Budget Planning that Affects Organization Performance

Abstract

       Management of the organization in a situation where the economy and society are constantly changing. An important tool to be used in setting goals for effective organizational management is budget planning. Because of that good planning, the organization must have a clear set of goals, be difficult, and have received cooperation from the members of the organization. The literature reviews revealed that good goal setting will help control effective budget planning. which has a positive influence on the performance of the organization. If management staff and employees of the organization pay attention to the goal setting of budget planning, it can not only increase financial efficiency but is also a tool for effective management. It must also take into account the upcoming performance of the organization both financial and non-financial. The performance model of an organization can be measured in a number of ways, such as: assessment by considering the existence of the organization, applications of financial criteria, equilibrium measurement, and comparison with other organizations, etc. Besides, for each organization, being successful in doing business and having good performance is acceptable. Part of it is due to the goal of good budget planning in the organization. Since if organization members possessed knowledge and understanding of budget planning methods, as well as their applications in accordance with current situations, it would benefit the organization by helping to set the directions of the operations and forecast the results that would occur both at present and in the future. On the other hand, if the organization has poor setting goals for budget planning and its members lack attentions, it would yield negative effects on the operations of the organization, accordingly. This could lead to the closure or eventual bankruptcy of the organization.