POSDCORB –

BUDGETING

ORIGIN OF POSDCROB

POSDCORB, it first appeared in a 1937 staff paper by Luther Gulick and Lyndall Urwick written for the Brownlow Committee.

Gulick and Urwick build their ideas on the earlier 14 principles of Henry Fayol.

POSDCORB is an acronym widely used in the field of Management and Public Administration that reflects the classic view of administrative management.

P lanning

O rganizing

S taffing

D irecting

CO ordinating

R eporting

B udgeting.

BUDGETING

BUDGET:A budget is a financial plan and a list of all

planned expenses and revenues.

It is a plan for saving, borrowing and spending.

It is derived from a French word bougette, which means purse.

A BUDGET,

Provide a forecast of revenues and expenditures, that is, construct a model of how our business might perform financially if certain strategies, events and plans are carried out.

Enable the actual financial operation of the business to be measured against the forecast.

Establish the cost constraint for a project, program, or operation.

TYPES OF BUGDETING

Sales budget Production budget Cash flow/cash budget Marketing budget Project budget Revenue budget Expenditure budget 

LIMITATIONS

Accuracy in budgeting comes through expenditure. Hence it should not be relied on too much in the initial stages.

Budgeting involves a heavy expenditure, which small concerns cannot afford.

The success of budgetary control depends upon wiling co-operation and team work.

Frequent changes maybe called for in budgets due to fast changing industrial climate