Professional Documents
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Budget Target Set t ing and Effect ive Performance Measurement in Nigerian Hospit alit y Indus…
Journal of Finance and Economics
Effect iveness of St rat egic Orient at ion and Organizat ional Cult ure on Organizat ional Performance in …
Dr. Ammar Ahmed
International Jour nal of Innovative Research in Infor mation Secur ity ( IJIRIS) ISSN: 2349 -7017(O)
Issue 2, Volume 4 (Apr il 2015 ) ISSN: 2349 -7009(P)
www.ijir is.com
Abstract-- Budgeting is an indispensable tool in the hospitality industry-which has profit maximization as its goal and this
can only be realized when resources are properly planned and controlled with the required commitment and expertise. Hotel
accommodation in Nigeria is facilitated mostly by the corporate sector, with booking for conferences and meetings demand
being highest. Whilst there has been rapid growth in the Nigerian hotel industry in the last decade, it is still in its infancy as
the National Bureau for Statistics (2013) posited that the hotels and restaurant sub-sector contributes a mere 0.55 per cent to
the Gross Domestic product (GDP). However, the major reason for this insignificant contribution to the GDP has been linked
to poor budgeting process and internal control within the players in the industry. This paper therefore researched into the
role of budget and budgetary control on organizational performance: a case study of Tahir Guest Palace, Kano. The study
made use of both the primary and the secondary data. The instrument for the collection of the primary data was the
questionnaire administered, while the secondary data was obtained via the financial statements of Tahir Guest Palace from
2007-2012. A total of 278 staff was sampled using the purposive sampling technique, and data obtained was subjected to
regression analysis.Result revealed that budget administration, budget target setting and budget process all have significant
impact on organizational performance. The research work therefore, recommend that; (i) the top level management of Tahir
guest palace should maintain appropriate standard on budget administration and preparation, and budget process.
Specifically, the use of the current budget process on previous budget performance should be emphasized in measuring
performance year in year out, as this will enable the management to monitor the organizational growth and or performance
as budgeted; (ii) the staff of various cadres at Tahir guest palace should also be allowed to participate in the budget target
setting and process to further enhance the organizational performance. If the above recommendations are implemented it
will not only increase the organizational performance of Tahir Guest Palace but will also lead to increase in subordinates
efforts and task performance.
Keywords: Budget, Budgetary Control, Hospitality Industry, Permanent Income Hypothesis
3.0 METHODOLOGY
This section focuses on the methodology used for this study. It covers matters such as model specification and estimation, source
of data, population of the study, sample size and sampling technique, method of data collection and the method of data analysis.
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© 2014-15, IJIRIS- All Rights Reser ved Page -25
Inter national Jour nal of Innovative Research in Infor mation Secur ity (IJIRIS) ISSN: 2349-7017 (O)
Issue 2, Volume 4 (Apr il 2015 ) ISSN: 2349-7009 (P)
ww w.ijir is.com
Table 4.1 above showed that both gender (male and female) was sampled and accounts for 67.8 and 32.2 percent respectively,
implying that the investigation was not gender biased. On age grounds, 18.3 percent of the respondents have their ages below 30
years, 53.1 percent between 31 and 40 years, while 28.6 percent of the respondents have their ages 41 years and above. The
educational background of the respondents revealed that 16.5 percent of the respondents have their secondary education while a
larger percent i.e., 48.0 percent, 28.2 percent and 7.3 percent are graduates and holds two or more degrees and other
qualifications. This implies that their responses can be relied upon based on their educational attainment. The marital status
revealed that 18.3 percent of the respondents were single, 19.0 percent divorced, 1.5 percent widow or widower, while a larger
part of the respondents i.e., 61.2 percent are married. Respondents’ years of experience revealed that 14.7 percent have less than
5 years working experience, while 41.2 percent and 44.3 percent have 5 to 10 years and above 11 years working experience
respectively. The staff cadre revealed that 44.7 and 41.0 percent of the sampled staff belong to the middle and senior level
management respectively and this therefore, implies that the outcome of their responses can be relied upon.
A multicollinearity check was also conducted on the variables using Pearson-Correlation test statistic as shown in Table 4.3
Result showed that there is absence of multicollinearity among the independent variables as non of them has a correlation
coefficient below 0.7, this is based on the submissions of Berry (1993), and Tabachnick and Fideil (2007).
R2 0.851
Adjusted R2 0.741
Durbin-Watson 1.925
F-statistic 83.196
Prob.(F-Statistic) 0.000***
* Significant at 10%, ** significant at 5%, and ***significant at 1%
Source: Authors’ Computation, 2015
The apriori expectation of the model is that λ 1 > 0, λ 2 > 0 and λ 3 > 0. The a priori expectation was satisfied as Budget
Administration and Preparation (BAP), Budget Target Setting (BTS) and Budget Process (BP) all have positive relationship
with the Returns on Assets (ROA). Thus, the model for this study is valid. On the grounds of the coefficients of the independent
variables, an increase in the budget administration standards will increase the the firms return on assets by 0.409 i.e., by
approximately 41%. An increase in the budget target setting standard will increase the return on assets by 61% while an increase
in the budget process standards will increase the return on assets by 25%. The attendant probabilities of the coefficients for the
explanatory variables are 0.090, 0.002 and 0.042 for BAP, BTS and BP respectively and showed that they are significant 10 %, 1
% and 5% level of significance respectively.
The Durbin-watson is 1.925 and implies that there is absence of serial correlation, this is in line with the opinion of Alsaeed
(2005), that Durbin-watson factors between the values of 1 and 3 implies absence of autocorrelation. The F-statistic value of
83.196 is large with a probability of 0.000 implying that the model is significant at 1% level of significance and thus, the model
is good to fit.
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© 2014-15, IJIRIS- All Rights Reser ved Page -27
Inter national Jour nal of Innovative Research in Infor mation Secur ity (IJIRIS) ISSN: 2349-7017 (O)
Issue 2, Volume 4 (Apr il 2015 ) ISSN: 2349-7009 (P)
ww w.ijir is.com
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