both developed and developing countries, the government is turning to small and
medium scale industries and entrepreneurs, as a means of economic development
and a veritable means of solving problems. It is a seedbed of innovations,
inventions and employment. Entrepreneurship is as old as Nigeria and had contributed to the
growth of the economy. Presently in Nigeria, SMEs assist in promoting
the growth of the country’s economy, hence all the levels of government at
different times have policies which promote the growth and sustenance of SMEs.
paper identifies the orientation of SME’s and entrepreneurial trends in
Nigeria, tackles the operational definition and scopes, and describes the role
of the Nigerian government as a participant, regulator and facilitator, both
legally and politically in the growth of SMEs and entrepreneurship. It
identifies the marketing problems of SMEs and entrepreneurships in Nigeria,
the provision and enactment of beneficial and supportive laws, the provision of
infrastructural facilities, constant man-power and development, direct
financial assistance to SMEs and the establishment of finance institutions to
support SMEs. It identifies the roles of SMEs in Nigeria’s development and growth.
It discusses the entrepreneurial thoughts, problems and advance practical
marketing solution. It concludes by clearly specifying the role of marketing to
the survival of SMEs and entrepreneurship in Nigeria, and relevant
recommendations. For SMEs to survive marketing practice and principles must be
1.1 Background of the Study
1.2 Statement of the Problems
1.3 Significance of the Study
1.4 Research Hypotheses
1.5 Research Questions
1.6 Method of Data Collection
1.7 Method of Data Analysis
1.8 Scope and Limitations of the Study
1.9 Definition of Terms
Background of First Bank of Nigeria Plc
2.2 Techniques for Compiling Budget
2.2.1 Increment Based Budget [IBB]
Zero Based Budgeting (ZBB)
Activities Based Budgeting (ABB)
2.2.4 Programme Planning Budgeting System (PPBS)
2.3 The Budgeting Process
2.4 The Origin of Budget in First Bank of Nig.
2.5 Budget Committee and its Importance
2.5.1 Importance of Budget Committee
Cooperation of Departmental Head in the Preparation
Responsibility of Management in the Preparation of
2.6 Budget Preparation
2.6.1 How Realistic is the Budget
Treatment of Variances
Office Budget and Management Approval at First
Importance of the Budget to the Whole Organization
2.9 Effectiveness and Short Comings of Budget
the Preparation of the Budget
During the Operation of the Budget
2.9.3 During the Comparison of the Budget
2.9.4 How the Shortcoming are Treated
3.2 Research Design
3.3 Population of the Study
3.4 Sample and Sampling Technique
3.5 Method of Data Collection
Method of Data Analysis
3.7 Scope and Limitation of the Methodology
and Reliability of Research Instrument
DATA ANALYSIS AND INTERPRETATION OF FINDING
4.1 Data Presentation
4.2 Test Hypotheses
4.3 Discussion of Findings
SUMMARY, CONCLUSION AND RECOMMENDATIONS
1.1 BACKGROUND OF THE STUDY
This introductory aspect is to provide an insight to the
frame upon which the study "Budgeting as a tool of Management
Control" is based. Budget has been a vital tool of management control
right from inception of organization study.
This is as a result of the growing complexity of the business
environment and the high level of competition in the market place, which has
made budgeting an invaluable management tool.
The management must know where it wants the organization to
be at the end of a future period and how it intends to get there. Thus
preparation of budget involves the development of set of estimates of future
cost and revenue in a form 'which will coordinate the activities in accordance
with selected objectives and will serve as a standard for cost control.
1.2 STATEMENT OF PROBLEM
Some problems may be encountered in the process of carrying
out research on this topic as budgeting in any company indicates re plans of
how the company will be run. It might be difficult to be able to have access to
some information which bank may feel it is unsafe to disclose such information.
Budgeting control is the estimation of future -plans made for
the purpose of making decision. Hence, this should be reviewed to ensure that
they are the best in term adequate planning.
Subsequently, the actual result should be compared with
estimates to ascertain the difference in order to discover the cause of
variance and form what section or department of the bank does it occur.
Management short comings over the year in
analyzing and ranking budget proposals have not gone unnoticed. Stating the
company's expectations (goals) in clear formal terms will help avoid confusion
and facilitate their attainability. Also communicate expectation to all
concerned with the management of the firm so that they are understood, supported and implemented. They also provide a
detailed plan of action for reading uncertainty and for the proper direction of individual group effort to
The study is also considered relevant in the following way:
It is relevant to any business student and other related
field since it covers almost what is required of them in budgeting. It can also
serve as a guide to anybody preparing for any relevant professional
Bankers will also benefit from this study as it will provide a guide in
making decisions on budgeting because bad budgeting can disorganize a business
since budgeting involves plan quantified in monetary It will be of immense
importance to potential investors either individual, companies or government
since it will it provides a feasible basis for the assessment of the viability
of the proposed business.
This project work may in the final analysis generate new hypothesis,
which will lead to a more detailed research work and provide other scholar who wish to go into this area in the nearest future the relevant
information with which to set file stage.
with objective of this study and the researcher's interest in finding solutions
to the problems at the inception of the study, two hypothesis have been
formulated about the investment and financial decision in Nigeria economy and as it affect
the operation of First Bank of Nigeria plc.
Ho: Budgetary system does not give a standard
by which the organization actual performance is ascertained
H1: Budgetary system gives a standard
by which the organization actual performance is ascertained
Ho: Budget as a tool of management control is
not necessary in an
H1: Budget as a tool of management control is
necessary in an organization.
1.5 RESEARCH QUESTIONS
questions are those interrogative statements that arise often from the course
of study, such questions are meant to provide information to the study. In
order to achieve the purpose of this research study, the study will attempt to
provide answers to the following research questions.
1. Does budgetary system give a standard by
which organization actual performance is ascertained?
2. Is budget as a tool of management control necessary in an
3. What is
the relationship between the necessary requisite features to be put in place
and the efficiency and the effectiveness of budgeting and budgetary control in
an organization like First Bank of
4. Is there any relationship between a good
budgetary system and the efficiency of a manufacturing organization like First Bank of Nigeria plc?
5. Does a budgeting and budgetary control
give standard by which the organization actual performance is ascertained?
6. What is the effect of the human element
as it affects the implementation of budgeting and budgetary control in First Bank of Nigeria plc?
7. How much effect or impact does human
element have on budgeting and budgetary control process?
1.6 METHOD OF DATA COLLECTION
collection will be through primary and secondary source, i.e data will
collected through searches in libraries, relevant journals, magazines,
newspapers, textbooks e.t.c and also by the use of structured questionnaire.
1.7 METHOD OF DATA ANALYSIS
this study, descriptive method will be used to analyze data and also in resting
hypothesis, chi-square (X2) will be employed. Findings from this
research study will be discussed in the light of the research problem
hypothesis, purpose research questions, literatures of the research and other
relevant issues conclusions will be drawn and recommendations and suggestions
also will be made.
1.8 SCOPE AND LIMITATION OF THE STUDY
In recognition of various impending limitations
of this budget/project work
budgeting as a tool of management control does not vividly reflect all the fact
behind the project title but effort had been made by the researcher to arrange
this study in such a manner that it covers the following areas.
The budget committee and its importance
Responsibility of management in the preparation of the budget
Preparation of cash budget
Treatment of variances
The importance of budget to the whole organization
Branch office budget and management Approval.
A review would be made on where the budgeting process of First Bank of
Nigeria Plc. originates from the manager in charge of budget preparation, the
extent to which budget estimates are achieved and the approaches disposal.
The researcher at this section find it very important to highlight some
of the difficulties which was encountered during the course of carrying out
this study and, which had hindered the aspiration of the researcher in terms of
information educative Hess and volume.
It is pertinent
to mention that time factor posed a considerable limitation to the study as the
period between the commencement and the submission of the study is considerably short and most
importantly the researcher has to combine other academic work with the writing
of the project.
Despite all the above mentioned
constraints, this study will serve informative, educative and useful purpose to
all intending and existing investors, including bankers,. Manufactures,
scholars as an insight, for them to set their own stage and basis upon future
researches can be based upon.
1.9 DEFINITION OF TERMS
1. Budget: According to CIMA, it is
defined as a future plan of action or an approved estimate stated in both
financial and quantitative term, prepared and approved prior to a definitive
period of time of the policy to be pursued in order to achieve an objective
during that period.
2. Budgeting: This is simply a
process of preparing a detailed short term plan (budget). It is the process in
which objectives policies and policy measure, finding requirement and source
and allocation of funds stated in the budget are determined.
3. Budgetary Control: Simply put, it
is the use of budget or budgets to control operations and activities of the
organization. It refers to the continuous comparison of a level with targeted
result so that corrective action could be taken in the adverse variances while
actions taken to the advantage of favourable variance.
4. Budget Committee: This is a
committee responsible for the preparation of the organization’s budget. It
usually comprises of executive management, senior budget holders and accounting
5. Budget Manual: This document
describes the objectives and procedures involved in budgeting. It provides a
useful reference source for managers responsible for budget preparation.
6. Budgetary System: This according
to UMA represents an amalgamation of three major components parts of budgeting,
budget and budgetary control.
7. Fiscal Policy: Refers to
government budgeted measures to regulate the macro variables and economic
activities through her expenditure and taxation.
8. Standard: This is a predetermined
level of activity.
9. Rolling Budget: UMA defines it as
the continuous updating of a short term budget by adding say a further month or
quarter so that the budget can reflect current condition.
10. Zero Based Budgeting (ZBB): This
requires a budget center to justify the entire budget from the scratch (Zero)
in each year of budget formulation.
BACKGROUND OF FIRST BANK OF NIGERIA PLC
Bank of Nigeria Plc. is a leading banking
institution with a one hundred and fifteen years of banking experience,
including and resilience behind it founded in 1894 by a shipping magnate front
Liverpool, Sir Alfred Jones, the bank commenced as a small bank in the office
of Elder Dempster & Company in Lagos.
Bank of Nigeria Plc. has diversified into a whole range of banking activities
and services including commercial, merchant and international banking, become
historically, a potent factor in the development of the country.
It was incorporated as a limited
liability company in London on March 31, 1894
with Head Office in Liverpool under the corporate name of the bank of British
West Africa with a paid up capital and $12,000 it started business after it had its
pre-descent the Africa banking corporation,
which was established earlier in 1892. The signaled beginning of the
pre-eminent position, which the bank in its earlier years grew rapidly in close
co-operation with 'the colonial government in performing the traditional roles
of a central bank such as issue of specie in the West Africa sub region.
In 1896, a branch opened in Accra Gold Coast
while another was established in free town in 1898. This marked a mile stone in
the bank's international banking thereby justifying its West African
The second branch in Nigeria
was opened in the older Calabar in 1900 and two years later, services had
extended to northern region. With a branch network- of more than 328 in year
2001 spread throughout the duration including London, the bank has the largest number of
branch in the industry. The bank has experienced phenomenal growth over the
years with a share capital of N55.6million in 1980 which has risen to
1215.million in 1994, the bank's total asset was N33.95 billion in 1994 and
deposit base of N23.3million. When the bank operation in 1894, it had a staff
strength of six. Comprising three Europeans and three Africans. Today, the bank
in virtually fully Nigerians.
This is of
course, has been the result of planning responsiveness to the teaming of the
Nigerian populace and government, as well as the bank's determination to be
identify with the aspiration of the country in its march toward national
development in science of these, the bank has had good cause to continually adjust its
organizational structure and corporate entity. Beginning with a change of its
name to the Bank of West Africa in 1957 reflecting the movement towards
independence by the West African Countries, the bank was incorporated locally
in 1969 to standard Bank of Nigeria Limited, this was in response to the
dictates of the companies Decree of 1968. Therefore, the active participation
of Nigerians in the management of the bank was mad in 1979 and in 1991 to First
Bank of Nigeria Limited and First Bank of Nigeria Plc. respectively. The
enhanced level of operations and the need to respond to increasing competition have necessitated a consideration re-organization
of the bank.
They begin seriously in 1985 when a new decentralized structure was
introduced after a detailed
analysis of the previous operational
and reporting structure.
The fine turning of that structure
in 1992 has paid off handsomely
aggressive banking, decentralized decision making process and responsible
directorate system have become the pillar of the bank's current operation in
order to facilitate rapid response to customer services.
The bank, has manufactured its leadership in financing long-term development of the
economy which stated in 1947 with a long tern loan to the colonial government.
To date the banks boast of diversified portfolio and credit facilities to various sector of the
economy. The Bank's rural banking records unmatched by and other banks with its agricultural
credit facilities through
community farming loan scheme have given peasant farmer tremendous access to
the much needed bank credit. The Bank had won covered stock exchange Award, as
the bank with the best financial reporting in the banking sector for several
years. Similarly, for five years, the bank came first as the CBN's Farmer's
Merit Award. The Bank has improved substantially on its operational performance
in the last three years with a performance record in 1993.
achievements provided the centenary in 18 Jan 2010, First Bank Nigeria Plc. recorded an- increase
in market capitalization of 0.4 percent from N406.1 to N407.54 billion to
retain the status of the most capitalized listed equity. On 2 March 2011 First
Bank of Nigeria Plc. was the most active in the sub-sector trading 31.16
million shares valued at N467.59 million at 781. deals.