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- Title
SELECTIVE SEQUENTIAL ZERO-BASE BUDGETING PROCEDURES BASED ON TOTAL FACTOR PRODUCTIVITY INDICATORS.
- Authors
Ishikawa, A.; Sudit, E. F.
- Abstract
The authors' purpose in this paper is to develop productivity-based sequential budgeting procedures designed to expedite identification of major problem areas in budgetary performance, as well as to reduce the costs associated with comprehensive zero-base analyses. The concept of total factor productivity is reviewed and its relations to ordinary and zero-based budgeting are discussed in detail. An outline for a selective sequential analysis based on monitoring of three key indicators of (a) implicitly budgeted total factor productivity; (b) revenue growth; and (c) profitability; is suggested. It is argued that this approach is instrumental in promoting a more systematic performance analysis, which is capable of revealing hidden efficiency shortfalls and is potentially cost and time saving. Additionally, this type of productivity-based budgeting is shown (via use of an actual application) to provide all the informational inputs for a full-fledged analysis of expected budgetary distribution of productivity gains among various categories of employees, shareholders and customers.
- Subjects
ZERO-base budgeting; BUSINESS budgeting; SEQUENTIAL analysis; MATHEMATICAL statistics; PROFITABILITY; MANAGERIAL economics; INDUSTRIAL efficiency; MANAGEMENT science; CORPORATE growth; FINANCIAL management; INDUSTRIAL productivity; COST effectiveness
- Publication
Management Science, 1981, Vol 27, Issue 5, p534
- ISSN
0025-1909
- Publication type
Article
- DOI
10.1287/mnsc.27.5.534