Mater's Dissertation, Nsonkwa Nehlie-Lois Asaba 2

TOPIC:
TIGHT BUDGETARY CONTROL AND

NON-FINANCIAL PERFORMANCE:
CASE OF SME IN YAOUNDE V,
CAMEROON
TIGHT BUDGETARY CONTROL AND NON-FINANCIAL PERFORMANCE:
CASE OF SMALL AND MEDIUM SIZE ENTERPRISES IN YAOUNDE V,
CAMEROON
DECLARATION
I, NSONKWA NEHLIE-LOIS ASABA, hereby declare that the dissertation

entitled “Tight Budgetary Control and Non-Financial Performance: The Case
of Small And Medium Size Enterprises, Yaoundé V Cameroon” is my work,
and that it has not been presented and will not be presented to any other university
for similar and/ any other Professional Master’s Degree award.
NSONKWA NEHLIE-LOIS ASABA
SIGNATURE
………………………………………………………..
DATE
……………………………………………………….
i | Page
Written by Nsonkwa Nehlie-Lois Asaba
CAMEROON
CERTIFICATION
This is to certify that this research work titled Tight Budgetary Control and
Non-Financial Performance; Case of Small and Medium Size Enterprises in
Yaoundé V, Cameroon is the work of NSONKWA NEHLIE-LOIS ASABA,
carried out within the framework of the Professional Master’s Degree under the
supervision of Dr. Marinus ARREY ARREY.
SUPERVISED BY: Dr. Marinus Arrey Arrey
SUPERVISOR
Signature…………………………
……………….
Date………………………………
………………….
ii | Page
CAMEROON
ACKNOWLEDGMENT
Special thanks to my dissertation supervisor, Dr. Marinus ARREY ARREY for

his patience, sacrifice, mentoring and guidance in this project.
Special thanks to the Director of Studies of the program, Dr Mulema Veronica,

my lecturers; Mr. Ayuk Collins, Mr. Tiku E. Oben, Mr. Sawai Berdu and Mr.
Ashu James, for playing an active role in my learning process, and facilitating the
accomplishment of this piece of work.
I also thank the staff and managers of all the enterprises who actively participated
in the data collection process, for this research work. Special thanks to the manager
of Ntarinkon Cooperative Credit Union Ltd, Ekounou-Yaoundé, and the
Accountant of Kalitas Construction for assisting me in gaining more professional
knowledge, for the completion of this piece of work.
My immense gratitude to my lovely father Mr. MELI BLAISE NSONKWA for

his continuous support and encouragement in realizing this project.
iii | Page
CAMEROON
DEDICATION
This research project is dedicated to my father, Mr. Meli Blaise Nsonkwa, for his
continuous moral and financial support and his sacrifice towards the realization of
the project.
iv | Page
CAMEROON
TABLE OF CONTENTS
DECLARATION...............................................................................................................................i
CERTIFICATION............................................................................................................................ii
ACKNOWLEDGMENT.................................................................................................................iii
DEDICATION................................................................................................................................iv
TABLE OF CONTENTS.................................................................................................................v
LIST OF TABLES........................................................................................................................viii
ABSTRACT..................................................................................................................................xiii
CHAPTER ONE: INTRODUCTION AND PRESENTATION OF THE ENTERPRISE..............1
1.1 BACKGROUND OF THE STUDY.................................................................................1
1.2 PROBLEM STATEMENT...............................................................................................6
1.3 RESEARCH OBJECTIVES.............................................................................................8
1.4 RESEARCH QUESTION.................................................................................................8
1.5 RESEARCH HYPOTHESES...........................................................................................9
1.6 SIGNIFICANCE OF THE STUDY..................................................................................9
1.7 BACKGROUND OF THE ENTERPRISE.....................................................................10
CHAPTER TWO: LITERATURE REVIEW................................................................................18
2.1.1 DEFINITON OF BASIC TERMS...............................................................................18
2.1.2 MAIN CONCEPTS......................................................................................................22
2.1.3 INDEPENDENT AND DEPENDENT VARIABLES................................................28
2.1.4 DEPENDENT VARIABLE: NON-FINANCIAL PEROFRMANCE OF SMALL

AND MEDIUM SIZE ENTERPRISES................................................................................69
2.1.5 ESSENTIALS OF A BUDGET.................................................................................148

v | Page
CAMEROON
2.1.6 CHARACTERISTICS OF BUDGETS..............................................................149
2.1.7 OBJECTIVES OF BUDGETING..............................................................................150
2.1.8 TYPES OF BUDGETS..............................................................................................152
2.1.9 BUDGET ADMINISTRATION, PERIODS AND BENEFITS................................157
2.1.10TECHNIQUES OF BUDGETARY CONTROL......................................................161
2.1.11 PURPOSE OF BUDGETS.......................................................................................163
2.1.12 ADVANTAGES AND DISADVANTAGES OF BUDGETING............................166
2.1.13 IMPORTANCE OF BUDGETS AND BUDGETARY CONTROL.......................168
2.1.14 MAKING BUDGETARY CONTROL EFFECTIVE..............................................170
2.1.15 STEPS IN PREPARING A BUDGET.....................................................................171
2.2 THEORETICAL FRAMEWORK.....................................................................................173
2.3 EMPERICAL REVIEW....................................................................................................178
CHAPTER THREE: RESEAECH METHODOLOGY AND INTERNSHIP ACTIVITIES......186
3.1 INTRODUCTION.............................................................................................................186
3.2 RESEARCH DESIGN.......................................................................................................187
3.3 METHOD OF COLLECTING DATA..............................................................................188
3.4 RESEARCH HYPOTHESES............................................................................................189
3.5 QUESTIONNAIRE...........................................................................................................190
3.6 TYPES OF DATA.............................................................................................................191
3.7 TYPES OF RESEARCH...................................................................................................191
3.8 SAMPLING TECHNIQUES.............................................................................................192
3.9 DATA ANALYSIS............................................................................................................192
CHAPTER FOUR: DATA PRESENTATION, ANALYSIS AND INTERPRETATION OF

RESULTS.....................................................................................................................................193
vi | Page
CAMEROON
4.1 DATA ANALYSIS AND PRESENTATION OF RESULTS...........................................193
4.2 VERIFICATION OF HYPOTHESES...............................................................................252
CHAPTER FIVE..........................................................................................................................259
5.1 INTODUCTION...........................................................................................................259
5.2 SUMMARY OF THE FINDINGS................................................................................259
5.3 PROBLEMS ENCOUNTERED AND PROPOSED SOLUTIONS.............................260
5.4 CONCLUSION.............................................................................................................261
5.5 RECOMMENDATIONS..............................................................................................262
APPENDICES..............................................................................................................................i
QUESTIONNAIRE......................................................................................................................i
REFERENCES..............................................................................................................................xiii
vii | Page
CAMEROON
LIST OF TABLES
Table 1......................................................................................................................63
Table 2: Motivation theories....................................................................................98
Table 3: Factors affecting motivation strategies and the HR contribution............115
Table 4: Characteristics of Over-Commitment and Under commitment...............134
Table 5: Advantages and disadvantages of budgeting...........................................166
Table 6: Sample population...................................................................................188
Table 7:Managerial position..................................................................................193
Table 8: Sector of work..........................................................................................194
Table 9: Organizational budgetary control system................................................196
Table 10: Organizational position..........................................................................197
Table 11: Budget control system as a result of the policies put in place...............198
Table 12: Are you aware of the budgets prepared by your organization?.............199
Table 13: Are you aware of the budgeting process taking place in your
organization?..........................................................................................................201
Table 14: How often are budget meetings conducted by the board?.....................202
Table 15: Are financial targets set up in the meetings?.........................................203
Table 16: Are budgetary responsibilities established for different sections during
the meetings?..........................................................................................................205
Table 17: Are staff aware of their responsibilities in these meetings?..................206
Table 18: Each department takes part of the planning process by participating in the
determination of appropriate goals and objectives concerning their activities......207
Table 19: In the planning process, budget administrators are solely responsible for
making policies to ensure that the budget is respected..........................................209
Table 20: A budget is essentially a forecast rather than a true commitme............210
viii | Page
CAMEROON
Table 21: Proper planning in the budget preparation process affects organizational
performance positively...........................................................................................211
Table 22: Budget policy makers take into consideration the opinions of line
managers in the formulation of budgets.................................................................213
Table 23: Budgets that were properly planned for tend to experience less price and
quantity variances, hence making it possible for the organization to achieve its
forecasted financial goals on its activities..............................................................214
Table 24: I am highly motivated to draw up budgets for my department..............216
Table 25: The non-involvement of the middle- and first-line managers in the
formulation of budgets...........................................................................................217
Table 26: Integration in the budgetary preparation process gives managers a sense
of motivation and organizational commitment in the organization.......................219
Table 27: Budget review........................................................................................220
Table 28: How often is information sent to budget holders?.................................222
Table 29: Integration in the budgetary preparation process increases non-financial
performance in the organization.............................................................................223
Table 30: I am required to submit control reports that explain in detail budget
variances on a line-by-line basis............................................................................225
Table 31: From the comments made by my supervisors, I know that they
investigate my budget in every detail.....................................................................226
Table 32: My superiors do not care very much about interim budget deviations..228
Table 33: Budget matters are discussed regularly with my superior even if there are
no negative budget deviations to report.................................................................229
Table 34: When problems occur, I discuss budget matters with my superior without
being asked to.........................................................................................................231
Table 35: Tight budgetary control negatively affects managerial behavior..........232
ix | Page
CAMEROON
Table 36: Imposing methods of reaching budget performance influence managerial

behavior positvity...................................................................................................234
Table 37: I often feel worried to meet deadlines and manage the workload from my
supervisors because of the budgetary control system put in place.........................235
Table 38: When it comes to budgeting, I am willing to put in a great deal of effort
than normally expected in order to help the organization be successful................237
Table 39: I am required to prepare interim reports (e.g. monthly, quarterly) which
compare the results to date with the budgets.........................................................238
Table 40: Changes in the budget are difficult to get approved by the superior.....240
Table 41: Not achieving my budget has a strong impact on how my performance is
rated to my supervisor............................................................................................241
Table 42: Directors conduct regular checks to ensure that budget objectives are
being met................................................................................................................243
Table 43: Planning during the budgeting process significantly affects the non-
financial performance of an organization..............................................................244
Table 44: Coordination of budgets have a positive relationship with the non-
financial performance of an organization..............................................................246
Table 45: Control and Evaluation significantly affect the non-financial performance
of an organization...................................................................................................247
Table 46: Tight budgetary control has a positive relationship with the non-financial
performance of an organization.............................................................................249
Table 47: Tight budgetary control has a negative relationship on the non-financial
performance of an enterprise.................................................................................251
Table 48: Planning is expected to correlate positively with non-financial
performance............................................................................................................252
x | Page
CAMEROON
Table 49: Coordination is expected to have a statistically significant effect on non-

financial performance.............................................................................................254
Table 50: Control and evaluation are expected to have a statistically significant
effect on non-financial performance......................................................................255
xi | Page
CAMEROON
LIST OF FIRGURES
Figure 1: Organizational chart.................................................................................12

Figure 2: Independent and dependent variable........................................................29
Figure 3 : The planning process ..............................................................................42
Figure 4: Managerial levels......................................................................................83
Figure 5: The process of motivation......................................................................101
Figure 6: Motivation model (Porter and Lawler)...................................................107
Figure 7: 5 presentation of the tri-dimensional organizational commitment model
................................................................................................................................121
Figure 8: Levels of organizational commitment....................................................128
Figure 9: The link between organizational commitment dimensions and human
resources policies and practices (Meyer & Allen, 1997).......................................138
Figure 10: Types of Budgets..................................................................................153
Figure 11:: Budgeting and budgeting control process overview ..........................161
xii | Page
CAMEROON
ABSTRACT
The worldwide use of budgets in one form or the other and its effect on
organizational performance is the focal point of my interest in this study. In the
business world today, budgeting is being widely used as a tool for control by many
public and private entities mainly to achieve their organizational objectives.
Budgetary control systems are applied all over the world by being referred to as
necessary instruments for planning and performance. This thesis is aimed at
evaluating the effects of tight budgetary control on the non-financial performance
of an organization. Tight budgetary control represents three variables; planning,
coordination, control, and non-financial performance is further broken down into
motivation, organizational commitment, and job satisfaction. Both quantitative and
qualitative research design were used. At the end of the study, it was found that
tight budgetary control has a significant effect on non-financial performance of an
organization.
xiii | Page
CAMEROON
CHAPTER ONE: INTRODUCTION AND PRESENTATION OF THE

ENTERPRISE
This chapter is made up of the background of the study, problem statement,

research objectives, research questions, research hypotheses, significance of the
study and the presentation of the enterprise where the researcher carried out an
internship.
1.1 BACKGROUND OF THE STUDY
Budgeting is fundamental to every project. It is imperative because it is a means to

ensure that desired organizational objectives are met. This is also accomplished by
exercising control over scarce resources. Strategically, for an organization to run
effectively, there are four critical factors it must consider; that is, organizational
objectives of where it intends to go, plans on how it intends to accomplish such
objectives, coordination or whether individual plans fit in the overall
organizational objectives and control or whether actual performance matches
standards. Therefore, budgeting and budgetary control are the devices that an
organization makes use of for above purposes.
Budgeting is an integral part of planning and coordinating and is becoming

increasingly important as well. Control is comparing actual performance with
standards and taking corrective measures in case of any deviations, therefore, when
there is no plan, there is no control. It is almost impossible for an organization to
exist without some sort of budget. Individuals in their private affairs employ the
1 | Page
CAMEROON
use of budgets in their day-to-day activities. The practice of budgetary control is

now established on a worldwide basis and is still growing rapidly.
In general terms, a budget is a plan. It also forms the standard with which to
measure the actual achievements of people, departments, firms and even
governments. It is one thing to plan a budget using the best project figures and it is
quite another to ensure that the process of establishing the budget is both highly
efficient and effective in accomplishing its set objectives. This in simple terms is
basically what budgetary control entails.
All of this is necessitated by the economic concept of “scarcity”. Though scarcity

is a relative term, it is right to note that resources are scarce, consequently, they
serve as constraints to managements in terms of material, manpower, money and
time. Resources must be utilized to achieve the organizational objectives.
Budgeting as a tool for planning and control expressed in financial and non-
financial terms, based on predetermined objectives must represent what is likely to
happen after a careful balance has been struck between the ambition of
management and the constraints facing the business.
Following the uncertainties prevailing in the economic environment today,

managers and stakeholders must be poised and prepared to compete favorably
under these rapidly shifting conditions. In order to survive under these
environmental complexities and vagueness, stakeholders of both private and public
sectors need sharp tools, proven management techniques to forecast the major
changes which are likely to affect the business while they choose future direction
and dimension of resources needed to attain selected goals.
2 | Page
CAMEROON
Budgetary control as a proven management tool helps the management of the

organization and enhances performance of an organization. Budgetary control
variables like planning, coordination, control and evaluation directly affect the
financial and non-financial performance of the organization in that, budgetary
control is considered to be one of the essential management tools that can be used
by organizations to plan, monitor, and control their financial operations. It provides
the stakeholders and management of the organization with a clear insight into how
the resources of the organization are being utilized, and whether the organization is
moving towards its goals. In this dissertation, we will discuss the importance of
budgetary control in organizations, and how they can effectively implement it to
achieve their goals.
Budgetary control is essential for organizations for the following reasons; to ensure
efficient utilization of resources, to achieve strategic goals, to control expenditures,
evaluate performance and facilitate decision making.
The primary goal of budgetary control is to ensure that the organization’s resources
are being used efficiently and effectively. It enables the organization to allocate its
resources to the most important and pressing projects and initiatives, ensuring that
they are completed within time and budget constraints.
Organizations cannot achieve their strategic goals without proper budgetary

control. A well-planned budget helps in guiding the organization towards its short-
term and long-term objectives. It allows the organization to identify the necessary
3 | Page
CAMEROON
resources and the amount of investment required for various initiatives and
projects, making it easier for them to meet their objectives.
Budgetary control provides the organization with a mechanism to monitor and

control their expenditures. It helps in identifying specific areas where the costs are
higher than what was budgeted and provides the management with an opportunity
to find ways to control those expenditures.
Budgetary control is an effective tool for the evaluation of performance. It requires

setting clear targets and objectives, and then comparing the actual performance
with the budgeted performance. This process helps in identifying areas where the
organization has done well and areas that require improvement.
Budgetary control provides the organization with a solid basis for decision-making.
It helps in identifying the areas that require funding and provides the management
with the information required to make informed decisions about future investments.
Implementation of budgetary control requires careful planning and consideration.

The following steps should be taken to ensure effective implementation: setting
clear targets, accountability and responsibility, monitoring and control, and,
training and development.
The budget must be linked to the organization’s strategic goals. The targets and
objectives should be clearly defined, and the budget should be based on these
targets. Adequate resources and funding should be allocated to those activities that
are critical to achieving these targets.
4 | Page
CAMEROON
Budgetary control requires accountability and responsibility at all levels of the

organization. Clear lines of responsibility must be established so that everyone is
aware of their duties and responsibilities. This ensures that the budget is
implemented effectively and efficiently.
Effective monitoring and control are essential for the success of budgetary control.
Regular review of the budget, tracking of expenditures, and adjusting the budget as
required, are critical components of effective budgetary control.
Training and development of the employees involved in the budgetary control

process are critical. They should be provided with the necessary skills and
knowledge that will enable them to implement and monitor the budget effectively.
A study conducted by Walidah et al. (2019) investigated the relationship between

budgetary control and organizational performance. The study found that tight
budgetary control has a positive effect on organizational performance, particularly
in terms of operational efficiency and cost reduction.
Another study by Kibet et al. (2018) examined the impact of budgetary control on
financial performance of firms in the manufacturing sector in Kenya. The study
found that tight budgetary control has a significant positive impact on financial
performance of the organizations.
A study by Ojo and Oke (2019) explored the influence of budgetary control on
managerial decision-making and organizational performance. The study found that
5 | Page
CAMEROON
budgetary control enhances the managerial decision-making process, leading to

better performance and increased profitability.
This study is aimed at proving that there is a strong relationship between tight
budgetary control and both financial and non-financial performance. When a
company implements tight budgetary control, it sets financial targets and closely
monitors its spending to ensure it does not exceed these targets. This can lead to
better financial performance as it helps the company to manage its cash flow,
reduce costs, and increase profitability.
Additionally, tight budgetary control can also improve non-financial performance.

It enables the company to focus on its key objectives and align resources to achieve
these objectives. It helps to identify areas where resources can be utilized more
efficiently and effectively, thereby improving productivity and operational
performance. Overall, tight budgetary control can have a positive impact on both
financial and non-financial performance by promoting discipline, accountability,
and efficiency within the organization.
1.2 PROBLEM STATEMENT
The implementation of a TBC system is expected to have an effect on

organizational non-financial performance. The cause for the expectation of such
negative consequences is that employees, mostly on the managerial level, are only
evaluated whether they achieve budget targets (Van der Stede 2000).
Considering the current economic situation and the above-described effects of

shareholder’s intervention, as well as the expected effect on managerial behavior
6 | Page
CAMEROON
increases the importance for research in this area. Hence, this Master Thesis will
carefully investigate the Effects of Tight Budgetary Control on Organizational
non-financial performance
A study conducted by Samadzadeh et al. (2019) investigated the relationship

between budgetary control and employee motivation. The study found that tight
budgetary control negatively affected employee motivation and job satisfaction,
which ultimately leads to lower organizational performance. Another study by
Elasrag and Helmy (2017) examined the impact of tight budgetary control on
innovation in Egyptian firms. The study found that tight budgetary control has a
negative impact on innovation, as it restricts the availability of resources required
for innovation, leading to lower organizational performance.
With the majority of managers focusing on the financial aspect of budgeting, the
non-financial aspect is commonly neglected. Budget manager tend to forget that,
when employee motivation, satisfaction and commitment are absent, the end result
will be poor organizational performance.
It is imperative that each manager feels that the budget for his section is realistic,
relevant and not imposed upon him. However, in practice, this is not always the
case. Timing of expenditure, feedback challenges and human factors in budgeting
pose a threat which hinders the process of providing accurate and suitable
measures of performance and the preparation of performance reports that
highlights areas of concern which eventually lead to waste.
From observations and previous research findings, the researcher noticed that,
there is too much reliance on tight budgetary control as a substitute for good
management. The budgetary system, perhaps because of undue pressure or poor
7 | Page
CAMEROON
human relations may cause antagonism and decrease motivation, thereby resulting
in poor performance of an organization. Budgets are developed around the
organization’s structure and departments, which may be inappropriate for ‘current
conditions’, and may not reflect the underlying economic realities. Lack of good
communication system may be an underlying factor affecting budget performance.
1.3 RESEARCH OBJECTIVES
The objectives of this study are made up of the main and the specific objectives,
which are :
Main objective
〉 To evaluate the effects of tight budgetary control on non-financial
performance of an organization.
Specific objectives
〉 To evaluate the effects of planning on non-financial performance.

〉 To evaluate the effects of coordination on non-financial performance.
〉 Re-examine the effect of control on non-financial performance.
1.4 RESEARCH QUESTION

Main question
〉 What are the effects of tight budgetary control on non- financial

performance?
Specific questions
〉 What is the effect of planning on non-financial performance.?

〉 What is the effect of coordination on non- financial performance?
8 | Page
CAMEROON
〉 What is the effect of control and evaluation on non-financial performance?
1.5 RESEARCH HYPOTHESES

The research hypotheses of the study are stated in the alternative form as
follows;
H1: Planning is expected to correlate positively with non-financial performance.
H2: Coordination is expected to have a statistically significant effect on non-

financial performance.
H3: Control and evaluation are expected to have a statistically significant effect on
non-financial performance.
1.6 SIGNIFICANCE OF THE STUDY
Until recently, most researchers on budgeting and budgetary control focused only
on the financial aspect. Much attention is paid particularly by accountants and
management to the mechanics of budgeting and in the process neglecting an
important aspect; that is, the non-financial aspect (behavioral aspect).
This study therefore seeks to draw attention to both the financial and non-financial
aspects of budgeting. The contribution of this research work is to enable
organizations take into consideration the resources of the organization (material,
money and manpower), when setting standards and making budgets.
In addition to this, this study is designed to contribute to the existing ways of staff
motivation, to encourage the concept of participative management.
9 | Page
CAMEROON
The worldwide use of budgets in one form or the other and its inherent problems
encountered is the focal point of interest in this study. A study of this nature is of
immense benefit not only to the microfinance where I carried out my internship,
but to all stakeholders in the financial system. It is of great importance to all micro
finance movements as it offers strategies for successful implementation of budgets
and budgetary control.
The findings of this study will improve the effectiveness of NtaCCUL Ekounou in
particular, and other organizations in general and make it a more creative tool for
management rather than merely a means of expressing its objectives.
1.7 BACKGROUND OF THE ENTERPRISE
NTARINKON COOPERATIVE CREDIT UNION LIMITED is a saving/lending

credit union that began in 1972 with 15 members. Today, it has a membership of
over 50.000 and 11 branches around the country. Membership is open to all. It is a
microfinance institution registered under MINFI No.00395 and COBAC No D-
2001/5 code No 19431.
Ntarinkon Cooperative credit union started as a decision group in 1972. The brain
behind this meeting group was Pa Elias Nde Warah of blessed memory. The main
activity of the group was a weekly contribution of 500frs and savings ranging from
5frs to 100frs. The first meeting took place at Ntarinkon Mankon. During this
meeting Pa Elias Nde was elected president and Nche Wilfred Abegly as the
treasurer. In 1975 Cameroon Cooperative Credit Union League (CAMCCUL) was
invited to see how the meeting could be transformed to a credit union. In 1985
Ntaccul was registered as a credit union affiliated to CAMCCUL. In 1986, the
president Elias Nde Warah stepped down and Kimbeng Joseph was elected
10 | Page
CAMEROON
president. The head office was in Ntarinkon, which remains today the headquarter
of Ntaccul. In 1992, the union was registered with the ministry of Agriculture, Mr.
Tamasang Jacob was president of the union at that time. In 1990 Madam Musu
Grace was recruited as the first bookkeeper of the union. In 2005 Ntarinkon
Cooperative Credit Union was registered with the Banking Commission (COBAC)
and the general manager was Evelyn Mambo Awah. In the general assembly
meeting of 2013, members voted to disaffiliate from the CAMCCUL network and
to register as an independent category 1 micro finance institution. During this
period the union’s general manager was Divine Ade Muma and had Cletus Matoya
Anye as president.
11 | Page
CAMEROON
1.7.1 ORGANIZATIONAL CHART
GENERAL ASSEMBLY OF MEMBERS
YOUTH WOMEN SUPERVISORY

COMMITTEE BOARD
COMMITTEE BOARD
CREDIT EDUCATIONAL
COMMITEE COMMITTEE
GENERAL MANAGER
ASSISTANT GENERAL
MANAGER
FINANCE & LENDING HUMANCE MARKETING

CONTROL IT
ACCOUNTING DEPARTMENT RESOURCE DEPARTMENT
BRANCH MANAGER
ACCOUNTANT LENDING OFFICE
MEMBER SERVICE TELLER
Figure 1: Organizational chart
12 | Page
CAMEROON
1.7.2 PRODUCTS AND SERVICES
NtaCCUL PLC has a variety of products and services that they offer to their
customers. These products and services are offered to customers who pay their
basic requirements for registration; that is a registration fee of 7500frs, shares of
50.000frs, 2 passport-size photos and a copy of their National ID Card. The
products and services are described as follows:
1) Savings Account
This is the member’s investment account to which interest is calculated and

credited at the end of the year. The savings in this account and the frequency with
which the member saves forms a base which determines the member’s ability and
amount for a loan. Owing to the insurance paid on this account, the next of kin or
children of the deceased member benefits extra amounts (claims) on it.
2) Deposit Account
This is the current account in the union. The union is the custodian of the money
and members are paid back this money on demand. No notice of withdrawal is
needed.
3) Group Account
This account is reserved for legalized groups like meetings, associations, churches,
etc. It is for the safe keeping of group funds and to avoid misappropriation by
individuals. Interest is paid on the amount saved; withdrawal is free of charge.
4) Minors Account
13 | Page
CAMEROON
This account takes care of future needs of education, healthcare, and others for
children less 18years. Registration is 2500 FRS and withdrawal are free and
without prior notification. This account also yields interest.
5) Payment of Salaries
The union has a direct salary code from the ministry of finance whereby civil
servants can receive their salaries from any of their branches. Workers of private
companies such as G4S, the Bamenda City Council and ESSOKA Security are
already enjoying this service.
6) Standing Order (S/O)
Members can save and repay their loans through other banks by the use of standing
orders.
7) Overdraft Facilities
It is available to those with standing orders and those whose salaries are paid by
NtaCCUL.
8) Contract Financing
The union pre-finances contracts on presentation of a listing or bonds with an

irrevocable statement from the Ministry of Finance.
9) Njangi Financing
This is for Njangi groups where all the group members can benefit from the Njangi
at the same time. The interest rate for groups is moderate.
10) Money Transfer Services
With the putting in place of inter-connectivity, NtaCCUL now renders money

transfer services to its members free of charge. In this way, one can withdraw or
14 | Page
CAMEROON
deposit money from or into his/her account in another branch. Equally, non-
members can send money to persons in different towns within the NtaCCUL
network.
11) Plot Financing
This is a fixed asset investment product whereby a member can acquire a plot
through the union. The union acts as a third party between the member and the
landlord. The union pays the seller at the union office and keeps the document of
the plot and only hands them over to the member when he/she completes the
payment of the agreed sum in several installments.
12) Micro Credit Scheme
These are micro loans that can be taken by traders, “buyam-sellam” or shoe makers
through a collecting agent within the daily saving scheme. In this scheme, one can
be given four times his/her total monthly savings. There is also a group for lending
in this scheme.
13) Outreach Services
The union collects and makes payments to members and would be members
residing at the periphery of the cities where their offices are located such as;
Alabukam, Alahnkie, Akumalam etc. The union serves members who are
hospitalized, handicapped or bed ridden within the branch environment.
14) Institutional School Fees Account
The account is opened to nursery and primary schools, colleges, professional

schools and universities. It gives the opportunity for parents and guardians to pay
their children’s school fees through any NtaCCUL branch office. They also give
loans and overdrafts to schools to carry out emergency projects or supplement
15 | Page
CAMEROON
teachers’ salaries in times of scarcity. They are already partnering with P.S.S
Nkwen, L.C.C Mankon, P.C.S.S Azire and GTHS Alabukam.
15) Western Union Money Transfer
You can send and receive money worldwide in any of their branch offices.
16) Special Operations for Customs Clearance/ Removal of Containers at

the Seaport.
They offer credit and assistance for quick clearance of goods in order to avoid
profit-killing penalties or cutthroat interest from private money lenders.
17) Agricultural Loans
They give loans to farmers either to buy seeds, farms tools, insecticides, veterinary
drugs or fertilizers to improve productivity, rent or buy farmland.
18) A.T.M Services
Automated Teller Machines have been installed in Major towns of Cameroon

where NtaCCUL offices are located. This service machine gives members the
opportunity to withdraw money using their VISA Cards at any time of the day to
solve emergency financial shocks. Members can also withdraw from any ATM of
any other bank if NtaCCUL is affiliated to them.
19) Mobile Money
NtaCCUL has partnered with MTN and Orange Cameroon whereby one can send
or receive money through these services in any of their branches.
20) Social Services
16 | Page
CAMEROON
As part of its social mission objectives, NtaCCUL offers some social amenities to
her members and non-members. For example, free vaccinations to members during
A.G.M, free exercise books to colleges and members, benches to schools etc.
21) Other Auxiliary Products and Services

〉 Payment of electricity bills which is done in partnership with mobile pay.
〉 The Creditor News Magazine of NtaCCUL: This is an internal
informative, educative and entertaining journal that usually comes out
towards an AGM. Members can advertise their schools or business in this
media.
〉 Cheque clearing/Discounting: the union can clear other bank cheques on
behalf of their members and non-members at give-away rate.
〉 Internships: Professional training is given to selected students from
renowned institutions.
〉 Bank Statements: the union offers bank statements to our members for
various purposes.
〉 Other products and services include Christmas Season Loans, Term
deposits, line of credit, and Tax declarations.
17 | Page
CAMEROON
CHAPTER TWO: LITERATURE REVIEW
This chapter contains the definition of basic terms, the conceptual review, literature
review and the empirical review of the study.
2.1 CONCEPTUAL REVIEW

2.1.1 DEFINITON OF BASIC TERMS
1) Motivation
Motivation describes ways in which managers promote productivity in their

employees. It is also defined as the willingness to exert high levels of effort
towards organizational goals conditioned by the employee’s ability to satisfy some
individual needs. It is the drive or force that causes an individual to outperform in
his duties. It can also be defined as that state that activates and directs behavior
towards the accomplishment of goals.
2) Budgetary control
Budgetary control can be defined as a system of controlling cost which includes

preparation of budgets, coordinating the departments and establishing
responsibilities, comparing performance with budgeted and acting upon results to
achieve the goals and objectives of the organization.
3) Planning
Planning is a management process concerned with defining goals for a company’s

future direction and determining the resources required to achieve those goals.
4) Coordination
18 | Page
CAMEROON
Coordination is the integration, unification, synchronization of the efforts of the

departments to provide unity of action for pursuing common goals.
5) Control and evaluation
Control is a function of management which helps to check errors in order to take

corrective actions. This is done to minimize deviation form standards and ensure
that the stated goals of the organization are achieved in the desired manner.
Control and evaluation in management means setting standards, measuring actual
performance and taking corrective action. Thus, control comprises these three main
activities.
6) Satisfaction
Satisfaction, generally implied as job satisfaction or employee satisfaction is a

measure of workers’ contentedness with their job, whether they like the job or
individual aspects or facets of jobs, such as nature of work or supervision. Job
satisfaction can be measured in cognitive(evaluative), affective (or emotional) and
behavioral components.
7) Stress
Management stress is defined as a state of mental and emotional pressure or strain,

caused by challenging or unfavorable circumstances. It is an outside force that
rules an individual’s feelings and behavior.
8) Organizational Commitment (OC)
Organizational commitment is defined as a view of an organization’s member’s

psychology towards his/her attachment to the organization that he/she is working
for.
19 | Page
CAMEROON
9) Managerial Behavior
Managerial behavior is the implementation of motivation, ability and opportunity

in status-quo daily organizational operations.
10) Performance standards
Performance standards are the establishment of organizational or system standards,

targets, and goals to improve the way activities are carried out in the organization,
so that in the end, organizational goals are met. This is also known to be the
expected level of performance in each area in the organization.
11) Financial performance
Financial performance refers to the overall financial health of the business. It can
also be defined as a process of calculating the monetary value of the outcomes of a
company’s policies and activities. It is used to assess a company’s overall financial
health over time and can also be used to compare competition either in the same
industry or other industries or sectors in aggregate.
12) Non-financial performance
Non-financial measures of performance are metrics that companies use to gauge

their success and performance in specific areas, without considering financial
metrics. These measurements avoid using monetary values to denote success or
failure. Examples of non-financial performance include brand preference, tax rate,
customer retention and loyalty, customer experience innovation and market share.
13) Promotion
It is the advancement of an employee to a better job. Better in terms of greater

responsibilities, more prestige or status, greater skills and especially increased rate
20 | Page
CAMEROON
of pay or salary. It indicates a move to a more important job or rank in a company

or organization which involves greater responsibility, skill, status and a higher pay
rate.
14) Productivity
Productivity is the rate at which goods and services having an exchange value are
brought forth and produced. This is the rate at which a company produces goods
and the amount produced compared with how much time and amount of raw
materials used for production. It is also a measure of how resources are brought
together and utilized for accomplishing a set of results.
15) Organizational performance
This comprises the actual output or the results of an organization as measured

against its intended output (or goals and objectives).
16) Effectiveness
It is the capability of producing a desired result or the ability to produce the desired
output. This refers to the extent to which output is in line with organizational
objectives.
17) Management
This is defined as the art, science or process of combining and utilizing the
physical and human resources of the organization to achieve the objective for
which the organization was created.
Henri Fayol also defined management as “a social process entailing responsibility

for the effective and economic planning and for the regulations of the
21 | Page
CAMEROON
operations of an enterprise in order to meet up the objective for which the

enterprise was created.”
18). Profitability
It is the ability of a company to use its resources to generate revenues in excess of

its expenses. In other words, this is a company’s capability of generating profits
from its operations.
19) Employees
An employee is an individual who works part time or full time under a contract of
employment, whether oral or written, express or implied and has recognized rights
and duties. An employee can also be referred to as a worker. They can also be
defined as people engaged in physical and/or mental activities for which there are
economic rewards although this may not be the primary aim.
2.1.2 MAIN CONCEPTS
A concept review is an analytical tool with several variations and contexts.
1. Definition of A Budget
A budget is defined as a financial and/or quantitative statement prepared and

approved prior to a defined period, of the policies to be pursued during the period
for the purpose of attaining a given objective. It mainly includes income,
expenditure and the employment of capital. A budget can also be defined as an
estimate of income and expenditure for a set period.
According to (Argyris, 1953) budgets represent accounting techniques, which are

created in order to control costs through people. These accounting techniques have
22 | Page
CAMEROON
a large impact on the behavior of most people within an organization because not
achieving certain budget objective often involve punishment, where in turn,
meeting these budget targets reflect great rewards for employees. Comparing the
view on budgets from Argyris (1953) with more recent literature by (Fabozzi)who
also emphasize the importance of budgets as “most successful management
techniques” to control managers and to align them to organizational objectives,
which can have a quite rewarding impact if the budgeting process is well
understood, shows that the interpretation has remained quite the same over the last
years. However, as budgets are present within each definition process, creation
process, or implement process of an organizational policy, they can have a huge
direct effect on the behavior of employees; thus, it is highly interesting to further
investigate them.
Furthermore, Argyris (1953) mentioned in his research that a negative association

of human behavior towards the implementation of budgets could be explained by
keeping the following points in mind.
〉 Budgets are evaluation techniques. Because they try to create goals against
which to measure employees’ performance, they naturally are complained
about.
〉 Budgets represent one of the few evaluation methods, which are always in
writing and consequently concrete. Hence, supervisors could use them
occasionally as “whipping posts”, which means that they use them in a way
to complain about certain totally unrelated issues.
〉 Budgets are pressure devises. Hence, they can create the same unfavorable
reactions as any other pressure mean could produce.
23 | Page
CAMEROON
This means if top management carefully considers the three points mentioned
above and formulate budgets in a way that subordinates are able to interpret them
in the correct manner, and are not forced to apply dysfunctional behavior to enforce
budget objectives, they are most likely to stimulate the achievement of
organizational and behavioral goals. According to (Tyales, 1998) budgets can have
a motivational effect on managers but only if managers think that they are also
most likely to achieve the budget objectives. Also, (al., 2012)) agree with the fact
that social and behavioral aspects are an integral part of the budgeting process and
that organizations have to carefully consider those effects as budget achievement
heavily depend on the commitment of managers and employees.
2. Budgetary Control
Budgetary control is a means to control all aspects of business operations through

budgeting. It can be defined by CIMA as “the establishment of budgets relating
the responsibilities of executives to the requirements of a policy, and the
continuous comparison of actual with budgeted results, either to secure by
individual action the objectives of that policy or to provide a basis for its
revision.”
From this definition, the steps of budgetary control are as follows;
〉 Establishment of the budget

〉 Responsibilities of executives
〉 Policy making
〉 Continuous comparison of actual with budget.
For the purpose of this study, budgetary control shall be divided into three
constructs;
24 | Page
CAMEROON
〉 Planning
〉 Coordination
〉 Control and Evaluation.
3. Budgets as Control Mechanism
Previous literature has concentrated on different kinds of measurements, which are

used to control different kind of issues. Drucker (1964) emphasized a distinction
between “controls” and “control” and mentioned that more “controls” do not
necessarily lead towards more “control”.
Controls deal with facts, that is, the events of the past. Control deals with
expectations, that is, with the future. Controls are analytical and operational,
concerned with what was and what is. Control is normative, concerned with what
ought to be, with significance rather than meaning. “(Drucker 1964; 286).
This means that “Controls” is concerned with measurement and information,

whereas “Control” refers to giving directions. However, the expression “control” is
used and described in many ways. There are authors that describe the expression in
a narrowly way that mostly consider the process of measurement and feedback.
Other authors, such as Merchant (1985), follow a rather wider definition based on a
behavioral sense that embraces everything that ensures that employees in an
organization implement strategies as previously determined. Moreover, Ouchi
(1979) and Merchant (1998) adopted an approach that identifies control mechanism
in three specific categories:
〉 Behavioral control
〉 Clan and social control
〉 Output control
25 | Page
CAMEROON
Behavioral control refers to the control of certain behavioral actions of employees.

This control approach is only effective if managers are aware of the behavior that is
beneficial and also are able to influence the outcome of the action. This means that
managers must observe individuals while they are working (Merchant 1998).
Clan and social control are the same as personal or cultural control. However,
personal control is defined as supporting the employees to execute their task in the
right way by forming the individual’s innate natural tendencies to act accordingly
and to control themselves. Cultural control is based on the shared values, beliefs,
and norms of the employees of an organization, which in turn, affect the action of
them. Means, which are used to align those values of individuals in an
organization, are for example the Code of Conduct or group incentive systems
(Merchant 1998).
Output control can be achieved by implementing performance measures in order

to decrease inappropriate behavior, set performance objectives, evaluate
performance, and to either punish or reward goal achievements. This is necessary
because there could be a conflict of interest between the individuals and the
organization; hence to align the interest of both parties, control mechanism is
necessary (Quattrone, 2010).
Management accounting control systems are the most often applied control forms
in organizations. However, there are a variety of explanations why management
accounting control systems recognize such a high rate of implementation
throughout businesses.
First, as most organizations are involved in a variety of different activities, they

must find a common measure to express the result of all their different operations.
Second, the accounting measures produce all relevant liquidity and profitability
26 | Page
CAMEROON
measures, which are requested by stakeholders of the firm in order to judge the
overall financial performance of the organization. Third, financial output control is
even recommended in uncertain conditions when other activities are unclear, for
example by considering market developments (Macintosh & Quattrone 2010).
management accounting control systems are divided into two main components.
The first one reflects the formal planning process, which in turn includes long-term
planning and budgeting in order to set objectives. The second one involves the
establishment of the so-called responsibility center, which include centers for
revenue, cost, profit, and investments. The above mentioned two components can
be used as control mechanism by considering derivations from the pre-set
performance objectives, based on which managers’ performance can be evaluated.
4. Tight budgetary Control (TBC)
The data suggest that Tight Budgetary Control (TBC) involves, in order of
importance, low tolerance for interim budget deviations, detailed budget line-item
follow ups, intense discussions of budget results, and strong emphasis on meeting
short tun budget targets.
However, the previous research about TBC and the effect on the variables of
interest; motivation, organizational commitment, stress, and satisfaction is either
really limited or not existing. Some of the existing research of TBC is related to the
performance of the organization.
Dahlan et al (2007) investigated the relationship between TBC on firms’

performance and included the effect of two contingent variables, which were
business strategy and the external environment. Utilizing regression analysis,
Dahlan et al. (2007) experienced a positive relationship between budgetary control
and firm performance by using a prospector strategy. Moreover, the external
27 | Page
CAMEROON
environment and a defender strategy did not indicate a moderation effect on the
relationship between firms’ performance and budgetary control.
Existing literature have stated many different definitions of budget control systems
and researchers have invested considerable time into investigating this topic.
However, budgetary control has been rather less interesting until few years ago.
(Anthony and Govindarajan, 1998) described budgetary control based on

managers’ performance evaluation of attaining budgetary objectives during an
accounting period. This means that budgetary control emphasizes budget
attainment. Merchant (1998), in turn, rather relates tight budget control to the
impact of decision making, which highlights that tight control has a severe impact
on decision making than lose control. Furthermore, he emphasized that budgetary
control is positively related to a high degree of certainty that individuals act in the
interest of the organization.
2.1.3 INDEPENDENT AND DEPENDENT VARIABLES
Budgeting and budgetary control systems are systematic processes used by

government institutions to allocate scarce resources to various ministries and
departments in order to achieve financial goals. Based on the financial literature, a
budget is a financial plan that is used to help coordinate business activities, whereas
cash is budgeted most often (Harrison & Horngren 2008).
From the topic “Tight Budgetary Control And Non-Financial Performance;

Case Of Small And Medium Size Enterprises in Yaoundé V”, the independent
variable; tight budgetary control was divided into 3 constructs which are; planning,
coordination, and control. And the dependent variable; non-financial performance
28 | Page
CAMEROON
will mostly dwell on managerial behavior, which is greatly affected by motivation,

satisfaction and organizational commitment.
29 | Page
CAMEROON
Independent Dependent
Variable Variable
Tight budgetary Non-financial

control Performance
Planning
. Motivation
. Satisfaction
. Organizational
Managerial commitment
Coordination
Performance . Stress
Control & Customer satisfaction

Evaluation
Customer experience
Brand preference
Market Share
Figure 2: Independent and dependent variable
30 | Page
CAMEROON
2.1.3.1 PLANNING
Planning is the process by which managers establish goals and define the methods
by which these goals are to be attained. Planning involves selecting missions and
objectives and the actions to achieve them; it requires decision making, which is
choosing from among alternative future courses of action.
Planning is deciding in advance what is to be done; that is a plan is a projected

course of action.”
Main Nature and Features of Planning in Business

The following facts come to light about its nature and features:
1. Planning Focuses on Achieving Objectives
Management begins with planning and planning begins with the determining of
objectives. In the absence of objectives, no organization can ever be thought about.
With the determining of objective, the way to achieve the objective is decided in
the planning.
In case, it is necessary to change the previously decided course of action for the
attainment of objectives, there is no hesitation to do so. It is thus clear that planning
is helpful in the attainment of objectives.
For example, a company decides to achieve annual sales of 12 crores. After

deciding upon this objective, planning to achieve this objective shall immediately
come into force. It was thought to achieve this objective by giving advertisement in
the newspapers.
31 | Page
CAMEROON
After some time, it comes to be known that the medium of advertisement appeared
to be incapable of achieving the target. In such a situation the medium of
advertisement can be changed and it can be shifted from newspapers to television
in this way, every possible change is made through the planned action for the
purpose of achieving the objective.
2. Planning is Primary Function of Management
Planning is the first important function of management. The other functions, e.g.,
organizing, staffing, directing and controlling come later. In the absence of
planning no other function of management can be performed. This is the base of
other functions of management. For example, a company plans to achieve a sales
target of 12 scores a year. In order to achieve this target, the second function of
management, i.e., organizing comes into operation. Under it the purchase, sales,
production and financial activities are decided upon. In order to complete these
activities, different departments and positions are decided upon.
The authority and responsibility of every position are decided upon. After the work
of organizing, information about the number of different people at different levels
required to achieve the objective shall have to be provided. This job will be
performed under staffing. Similarly, planning is the base of other functions like
directing and controlling.
3. Planning is Pervasive
Since the job of planning is performed by the managers at different levels working
in the enterprise, it is appropriate to call it all-pervasive. Planning is an important
function of every manager; he may be a managing director of the organization or a
foreman in a factory. The time spent by the higher-level managers in the process of
32 | Page
CAMEROON
planning is comparatively more than the time spent by the middle-level and lower-
level managers. It is, therefore, clear that all the managers working in an enterprise
have to plan their activities. For example, the decision to expand business is taken
by the higher-level managers. The decision to sell products is taken by the middle-
level and lower-level managers.
4. Planning is Continuous
Planning is a continuous process for the following reasons:
〉 Plans are prepared for a particular period. Hence, there is need for a new plan
after the expiry of that period.
〉 In case of any discrepancy plans are to be revised.
〉 In case of rapid changes in the business environment plans are to be revised.
5. Planning is Futuristic
Planning decides the plan of action what is to be done, how is it to be done, when it
to be done, by whom is it to be done all these questions are related to future. Under
planning, answers to these questions are found out.
While an effort is made to find out these answers, the possibility of social,
economic, technical and changes in legal framework are kept in mind. Since
planning is concerned with future activities, it is called futuristic. For example, a
company is planning to market a new product. While doing so it shall have to keep
in mind the customs and the interests/tastes of the people and also the possibility of
any change in them.
6. Planning Involves Decision Making
33 | Page
CAMEROON
Planning becomes a necessity when there are many alternatives to do a job. A

planner chooses the most appropriate alternative. Therefore, it can be asserted that
planning is a process of selecting the best and rejecting the inappropriate. It is,
therefore, observed that planning involves decision making.
Characteristics of Planning
1. Planning is goal-oriented.
〉 Planning is made to achieve desired objective of business.
〉 The goals established should general acceptance otherwise individual efforts
& energies will go misguided and misdirected.
〉 Planning identifies the action that would lead to desired goals quickly &
economically. It provides sense of direction to various activities.
2. Planning is looking ahead
〉 Planning is done for future.

〉 It requires peeping in future, analyzing it and predicting it.
〉 Thus, planning is based on forecasting.
〉 A plan is a synthesis of forecast.
〉 It is a mental predisposition for things to happen in future.
3. Planning is an intellectual process
〉 Planning is a mental exercise involving creative thinking, sound judgement

and imagination.
〉 It is not a mere guesswork but a rotational thinking.
34 | Page
CAMEROON
〉 A manager can prepare sound plans only if he has sound judgement,

foresight and imagination.
〉 Planning is always based on goals, facts and considered estimates.
4. Planning involves choice & decision making
〉 Planning essentially involves choice among various alternatives.

〉 Therefore, if there is only one possible course of action, there is no need
planning because there is no choice.
〉 Thus, decision making is an integral part of planning.
〉 A manager is surrounded by no. of alternatives. He has to pick the best
depending upon requirements & resources of the enterprises.
5. Planning is the primary function of management / Primacy of Planning.
〉 Planning lays foundation for other functions of management.

〉 It serves as a guide for organizing, staffing, directing and controlling.
〉 All the functions of management are performed within the framework of
plans laid out.
〉 Therefore, planning is the basic or fundamental function of management.
6. Planning is a Continuous Process.
〉 Planning is a never-ending function due to the dynamic business

environment.
〉 Plans are also prepared for specific period of time and at the end of that
period, plans are subjected to revaluation and review in the light of new
requirements and changing conditions.
35 | Page
CAMEROON
〉 Planning never comes into end till the enterprise exists issues, problems may
keep cropping up and they have to be tackled by planning effectively.
7. Planning is all Pervasive.
〉 It is required at all levels of management and in all departments of enterprise.

〉 Of course, the scope of planning may differ from one level to another.
〉 The top level may be more concerned about planning the organization as a
whole whereas the middle level may be more specific in departmental plans
and the lower-level plans implementation of the same.
8. Planning is designed for efficiency
〉 Planning leads to accomplishment of objectives at the minimum possible

cost.
〉 It avoids wastage of resources and ensures adequate and optimum utilization
of resources.
〉 A plan is worthless or useless if it does not value the cost incurred on it.
〉 Therefore, planning must lead to saving of time, effort and money. e.
Planning leads to proper utilization of men, money, materials, methods and
machines.
9. Planning is Flexible
〉 Planning is done for the future.

〉 Since future is unpredictable, planning must provide enough room to cope
with the changes in customer’s demand, competition, govt. policies etc.
〉 Under changed circumstances, the original plan of action must be revised
and updated to make it more practical.
36 | Page
CAMEROON
Importance/Significance of Planning
1. Planning provides Direction
Planning is concerned with predetermined course of action. It provides the

directions to the efforts of employees. Planning makes clear what employees have
to do, how to do, etc. By stating in advance how work has to be done, planning
provides direction for action. Employees know in advance in which direction they
have to work. This leads to Unity of Direction also. If there were no planning,
employees would be working in different directions and organization would not be
able to achieve its desired goal.
2. Planning Reduces the risk of uncertainties
Organizations have to face many uncertainties and unexpected situations every day.
Planning helps the manager to face the uncertainty because planners try to foresee
the future by making some assumptions regarding future keeping in mind their past
experiences and scanning of business environments. The plans are made to
overcome such uncertainties. The plans also include unexpected risks such as fire
or some other calamities in the organization. The resources are kept aside in the
plan to meet such uncertainties.
3. Planning reduces over lapping and wasteful activities
The organizational plans are made keeping in mind the requirements of all the
departments. The departmental plans are derived from main organizational plan. As
a result, there will be coordination in different departments. On the other hand, if
the managers, non-managers and all the employees are following course of action
according to plan then there will be integration in the activities. Plans ensure clarity
of thoughts and action and work can be carried out smoothly.
37 | Page
CAMEROON
4. Planning Promotes innovative ideas
Planning requires high thinking and it is an intellectual process. So, there is a great
scope of finding better ideas, better methods and procedures to perform a particular
job. Planning process forces managers to think differently and assume the future
conditions. So, it makes the managers innovative and creative.
5. Planning Facilitates Decision Making
Planning helps the managers to take various decisions. As in planning goals are set
in advance and predictions are made for future. These predictions and goals help
the manager to take fast decisions. 6. Planning establishes standard for controlling:
Controlling means comparison between planned and actual output and if there is
variation between both then find out the reasons for such deviations and taking
measures to match the actual output with the planned. But in case there is no
planned output then controlling manager will have no base to compare whether the
actual output is adequate or not.
6. Focuses attention on objectives of the company
Planning function begins with the setting up of the objectives, policies, procedures,
methods and rules, etc. which are made in planning to achieve these objectives
only. When employees follow the plan, they are leading towards the achievement
of objectives. Through planning, efforts of all the employees are directed towards
the achievement of organizational goals and objectives.
Limitations of Planning
1. Planning leads to rigidity
38 | Page
CAMEROON
Once plans are made to decide the future course of action the manager may not be
in a position to change them. Following predefined plan when circumstances are
changed may not bring positive results for organization. This kind of rigidity in
plan may create difficulty.
2. Planning may not work in dynamic environment
Business environment is very dynamic as there are continuously changes taking

place in economic, political and legal environment. It becomes very difficult to
forecast these future changes. Plans may fail if the changes are very frequent.
The environment consists of number of segments and it becomes very difficult for a
manager to assess future changes in the environment. For example, there may be
change in economic policy, change in fashion and trend or change in competitor’s
policy. A manager cannot foresee these changes accurately and plan may fail if
many such changes take place in environment.
3. It reduces creativity
With the planning the managers of the organization start working rigidly and they
become the blind followers of the plan only. The managers do not take any
initiative to make changes in the plan according to the changes prevailing in the
business environment. They stop giving suggestions and new ideas to bring
improvement in working because the guidelines for working are given in planning
only.
4. Planning involves huge Cost
Planning process involves lot of cost because it is an intellectual process and

companies need to hire the professional experts to carry on this process. Along with
39 | Page
CAMEROON
the salary of these experts the company has to spend lot of time and money to
collect accurate facts and figures. So, it is a cost-consuming process. If the benefits
of planning are not more than its cost then it should not be carried on.
5. Planning is a time-consuming process
Planning process is a time-consuming process because it takes long time to

evaluate the alternatives and select the best one. Lot of time is needed in
developing planning premises. So, because of this, the action gets delayed. And
whenever there is a need for prompt and immediate decision then we have to avoid
planning.
6. Planning does not guarantee success
Sometimes managers have false sense of security that plans have worked
successfully in past so these will be working in future also. There is a tendency in
managers to rely on pretested plans. It is not true that if a plan has worked
successfully in past, it will bring success in future also as there are so many
unknown factors which may lead to failure of plan in future. Planning only
provides a base for analyzing future. It is not a solution for future course of action.
7. Lack of accuracy
In planning we are always thinking in advance and planning is concerned with

future only and future is always uncertain. In planning many assumptions are made
to decide about future course of action. But these assumptions are not 100%
accurate and if these assumptions do not hold true in present situation or in future
condition then whole planning will fail.
40 | Page
CAMEROON
Planning Process/Steps in Planning

1. Recognizing Need for Action
An important part of the planning process is to be aware of the business

opportunities in the firm’s external environment as well as within the firm. Once
such opportunities get recognized the managers can recognize the actions that need
to be taken to realize them. A realistic look must be taken at the prospect of these
new opportunities and SWOT analysis should be done.
2. Setting Objectives
This is the second and perhaps the most important step of the planning process.
Here we establish the objectives for the whole organization and also individual
departments. Organizational objectives provide a general direction, objectives of
departments will be more planned and detailed.
Objectives can be long term and short term as well. They indicate the end result the
company wishes to achieve. So, objectives will percolate down from the managers
and will also guide and push the employees in the correct direction.
3. Developing Premises
Planning is always done keeping the future in mind, however, the future is always
uncertain. So, in the function of management certain assumptions will have to be
made. These assumptions are the premises. Such assumptions are made in the form
of forecasts, existing plans, past policies, etc. These planning premises are also of
two types – internal and external.
41 | Page
CAMEROON
External assumptions deal with factors such as political environment, social

environment, the advancement of technology, competition, government policies,
etc. Internal assumptions deal with policies, availability of resources, quality of
management, etc. These assumptions being made should be uniform across the
organization. All managers should be aware of these premises and should agree
with them.
4. Identifying Alternatives
The fourth step of the planning process is to identify the alternatives available to
the managers. There is no one way to achieve the objectives of the firm, there is a
multitude of choices. All of these alternative courses should be identified.
There must be options available to the manager. Maybe he chooses an innovative

alternative hoping for more efficient results. If he does not want to experiment he
will stick to the more routine course of action. The problem with this step is not
finding the alternatives but narrowing them down to a reasonable amount of
choices so all of them can be thoroughly evaluated.
5. Examining Alternate Course of Action
The next step of the planning process is to evaluate and closely examine each of the
alternative plans. Every option will go through an examination where all their pros
and cons will be weighed. The alternative plans need to be evaluated in light of the
organizational objectives. For example, if it is a financial plan. Then it that case its
risk-return evaluation will be done. Detailed calculation and analysis are done to
ensure that the plan is capable of achieving the objectives in the best and most
efficient manner possible.
42 | Page
CAMEROON
6. Selecting the Alternative
Here, best and most feasible plan will be chosen to be implemented. The ideal plan
is the most profitable one with the least number of negative consequences and is
also adaptable to dynamic situations. The choice is obviously based on scientific
analysis and mathematical equations. But a manager’s intuition and experience
should also play a big part in this decision. Sometimes a few different aspects of
different plans are combined to come up with the one ideal plan.
7. Formulating Supporting Plan
Once you have chosen the plan to be implemented, managers will have to come up
with one or more supporting plans. These secondary plans help with the
implementation of the main plan. For example, plans to hire more people, train
personnel, expand the office etc. are supporting plans for the main plan of
launching a new product. So, all these secondary plans are in fact part of the main
plan.
8. Implementation of the Plan
And finally, we come to the last step of the planning process, implementation of the
plan. This is when all the other functions of management come into play and the
plan is put into action to achieve the objectives of the organization. The tools
required for such implementation involve the types of plans- procedures, policies,
budgets, rules, standards etc.
43 | Page
CAMEROON
Figure 3 : The planning process
Types of Plans
Planning is a pervasive function of management; it is extensive in its scope. So, all

managers across all levels participate in planning. However, the plans made by the
top-level manager will differ from the ones that lower managers make. Plans also
differ from what they seek to achieve and what methods will be used to achieve
them. So, let us look at the types of plans that manager deal with.
1. Objectives
This is the first step in planning the action plan of the organization. Objectives are
the basics of every company and the desired objective/result that the company
plans on achieving, so they are the endpoint of every planning activity.
44 | Page
CAMEROON
For example, one of the objectives of an organization could be to increase sales by

20%. So, the manager will plan all activities of the organization with this end
objective in mind. While framing the objectives of the organization some points
should be kept in mind.
〉 Objectives should be framed for a single activity in mind.

〉 They should be result oriented. The objective must not frame any actions
〉 Objectives should not be vague; they should be quantitative and measurable.
〉 They should not be unrealistic. Objectives must be achievable.
2. Strategy
This obviously is the next type of plan, the next step that follows objectives. A
strategy is a complete and all-inclusive plan for achieving said objectives. A
strategy is a plan that has three specific dimensions
〉 Establishing long-term objectives

〉 Selecting a specific course of action
〉 Allocating the necessary resources needed for the plan Forming strategy is
generally reserved for the top level of management. It actually defines all
future decisions and the company’s long-term scope and general direction.
3. Policy
Policies are generic statements, which are basically a guide to channelize energies
towards a particular strategy. It is an organization’s general way of understanding,
interpreting and implementing strategies. For example, most companies have a
return policy or recruitment policy or pricing policy etc.
45 | Page
CAMEROON
Policies are made across all levels of management, from major policies at the top-
most level to minor policies. The managers need to form policies to help the
employees navigate a situation with predetermined decisions. They also help
employees to make decisions in unexpected situations.
4. Procedure
Procedures are the next type of plan. They are a stepwise guide for the routine to
carry out the activities. These stepwise sequences are to be followed by all the
employees so the activities can be fulfilled in an organized manner. The procedures
are described in a chronological order.
So, when the employees follow the instructions in the order and completely, the
success of the activity is pretty much guaranteed. Take for example the procedure
of admission of a student in a college. The procedure starts with filling out an
application form. It will be followed by a collection of documents and sorting the
applications accordingly.
5. Rules
Rules are very specific statements that define an action or non-action. Also, rules
allow for no flexibility at all, they are final. All employees of the organization must
compulsorily follow and implement the rules. Not following rules can have severe
consequences. Rules create an environment of discipline in the organization. They
guide the actions and the behavior of all the employees of the organization. The
rule of “no smoking” is one such example.
6. Program
46 | Page
CAMEROON
Programs are an in-depth statement that outlines a company’s policies, rules,

objectives, procedures etc. These programs are important in the implementation of
all types of plan. They create a link between the company’s objectives, procedures
and rules. Primary programs are made at the top level of management. To support
the primary program all managers will make other programs at the middle and
lower levels of management.
7. Methods
Methods prescribe the ways in which in which specific tasks of a procedure must
be performed. Also, methods are very specific and detailed instructions on how the
employees must perform every task of the planned procedure. Managers form
Methods to formalize routine jobs.
Methods are very important types of plan for an organization. They help in the
following ways;
〉 Give clear instructions to the employees, removes any confusion

〉 Ensures uniformity in the actions of the employees
〉 Standardizes the routine jobs
〉 Acts as an overall guide for the employees and the managers
8. Budgets
A budget is a statement of expected results the managers expect from the company.
Budgets are also a quantitative statement, so they are expressed in numerical terms.
A budget quantifies the forecast or future of the organization. There are many types
of budgets that managers make. There is the obvious financial budget, that
forecasts the profit of the company. Then there are operational budgets generally
47 | Page
CAMEROON
prepared by lower-level managers. Cash budgets monitor the cash inflows and
outflows of the company.
Characteristics of a Sound Plan

A sound plan should have the following characteristics:
〉 Primacy
Planning is an important managerial function that usually precedes other functions.

Obviously, without setting the goals to be reached and the lines of actions to be
followed, there is nothing to organize, to direct, or to control in the enterprise. But
this should not lead us to think that planning is isolated from other managerial
functions.
〉 Continuity
Planning is a continuous and never-ending activity of a manager to keep the

enterprise as a going concern. One plan begets another plan to be followed by a
series of other plans in quick succession. Actually, a hierarchy of plans operates in
the enterprise at any time. Planning gets used up where tomorrow becomes today
and calls for further planning day in and day out. Again, the incessant changes
make re-planning a continuous necessity.
〉 Flexibility
Planning leads to the adoption of a specific course of action and the rejection of
other possibilities. This confinement to one course takes away flexibility. But if
future and assumptions upon which planning is based prove wrong, the course of
action is to be modified for avoiding any deadlock. Accordingly, when the future
48 | Page
CAMEROON
cannot be molded to conform to the course of action, the flexibility is to be

ingrained in planning by way of adapting the course of action to the demands of
current situations.
〉 Consistency
Planning is made by different managers at different times. Maintenance of

consistency or the unity of planning is one of its essential requirements. Objectives
provide the common focus for unifying managerial action in planning. Moreover,
policies and procedures introduce a consistency of executive behavior and action in
matters of planning.
〉 Precision
Planning must be precise with respect to its meaning, scope and nature. As guides
to action, planning is to be framed in intelligible and meaningful terms by way of
pinpointing the expected results. Planning must be realistic in scope rather than
being dreams indicating pious desires. As planning errors are far more serious and
cannot be offset by effective organizing or controlling, the accuracy and precision
is of outmost importance.
〉 Pervasiveness
Planning is a pervasive activity covering the entire enterprise and every level of
management. Planning is not the exclusive responsibility of top management only.
But it extends to middle and lower managements as well. Although top managers
are mostly preoccupied with planning because of the wider scope of operational
and decision-making authority, planning is of equal importance to every manager.
49 | Page
CAMEROON
2.1.3.2 COORDINATION
The purpose of organizing; division of work, department, span of management,

centralization and decentralization, delegation of authority and organization
structure is to optimally achieve the organizational goals. This is possible if units or
departments of the organization are integrated, united and coordinated in a unified
direction. Once the activities of the organization are broken into smaller units
which are re-grouped into departments (on the basis of similarity of features), it
becomes necessary for managers to coordinate the activities of these departments
by communicating the organizational goals to each department, setting
departmental goals and linking the performance of each department with that of
others so that all the departments collectively contribute towards the organizational
goals. Coordination is, thus, "the process of linking the activities of various
departments of the organization."
Coordination is "the process of integrating the objectives and activities of the

separate units, departments or functional areas) of an organization in order to
achieve organizational goals efficiently."
Coordination is "integration of the activities of individuals and units into a

concerted effort that works towards a common aim." — Pearce and Robinson
Co-ordination maintains unity of action amongst individuals and departments.

Absence of co-ordination will result in sub-optimal attainment of goals. In
extreme situations, it may result in losses and liquidation of companies. Co-
ordination integrates, harmonizes and balances the conflicting opinions of
individuals and departments and facilitates their movement in a direction of the
organizational goal.
If, for example, the production department does not coordinate its activities with
50 | Page
CAMEROON
the sales department, production may be more or less than the required sales.
Production more than sales will result in piling of stock and blocking up funds in
inventory and production less than sales will result in loss of sales revenue and
goodwill of the firm. Coordination, thus, facilitates smooth running of a business.
Effective coordination is based on interdependence of organizational activities. It is
based on systems approach to management which acknowledges that different
departments of the organization are inter-dependent (input of one is the output of
other). It also assumes the interdependence of organization's internal and external
environment. The degree of coordination depends upon the degree of
interdependence. More the interdependence (internal or external), more is the need
for coordination and vice versa. If there is no interdependence amongst
organizational activities, there is no need for coordination. This is known as system
approach to coordination. Coordination is the most basic and fundamental principle
of organization. It is "the orderly arrangement of group effort to provide unity of
action in the pursuit of a common purpose."
Features of Coordination
Coordination has the following features:
〉 Group effort: Coordination integrates the efforts of individuals and

departments to make them work as a group. The group works for
maximizing the group goals as well as organizational goals.
〉 Unity of action: Every individual and department have his own perspective
or way of achieving the organizational goals. Coordination ensures unity of
action amongst individual and departmental activities.
〉 Common goal: Each individual and department has a goal, which it strives
to maximize. Maximization of departmental goals at the cost of
51 | Page
CAMEROON
organizational goals can be harmful for the organization. Sales department,

for example, may want to increase expenditure on advertisement to
maximize sales. Finance department, however, may not release funds for
advertisement to control financial costs. Coordination harmonizes the
conflicting departmental goals towards a common goal, that is, goal of the
organization.
〉 Continuous process: Coordination is not a onetime attempt by managers to
integrate and harmonize individual goals. It is a continuous process that
keeps going as long as the organization survives.
〉 Managerial responsibility: Co-ordination is the responsibility of every
manager at every level for every operative function (production, finance,
personnel and sales.) All managers continuously coordinate the efforts of
people working in their respective departments.
〉 Essence of management: Coordination is not a separate function of
management. It is required for every managerial function. Managers
coordinate the human and non-human resources while carrying out all the
managerial functions of planning, organizing, staffing directing and
controlling. Coordination is, thus, called the 'essence of management."
〉 Process of synthesis of efforts: Coordination integrates and synthesizes the
efforts of people of all departments at all levels towards achievement of
common organizational goals. It also synthesizes the organizational
resources (physical, human and financial) to collectively contribute to
organizational goals.
〉 Necessary obligation: Coordination is not something that managers may or
may not strive for. All managers (also non-managers) must direct their
efforts towards a common goal considering this as their obligation.
52 | Page
CAMEROON
〉 Deliberate effort: Coordination is not a spontaneous effort of managers.

Managers make deliberate efforts to coordinate their inter-departmental
activities.
Elements of Coordination
Following are the elements of coordination:
〉 Group effort: Coordination integrates individual effort of each unit so that

the unit works as a group. It ensures that individuals work as group for
promoting their individual and organizational goals.
〉 Unity of action: Coordination ensures that activities of each individual,
group and department are headed towards the common goals. They must be
carried out within the framework of policies, procedures etc.
〉 Common purpose: Coordination strives to maintain balance amongst
individual, departmental and organizational goals. It ensures that resources
and tasks are assigned to individuals and departments in a manner that
working of one department promotes the working of other departments. All
individuals, groups and departments should have a common purpose, that is,
achieve organizational goals.
Importance/Need for Coordination
The need for coordination arises because individuals and departments have
different goals. They depend on each other for resources and information. To
ensure that all individuals and departments use organizational resources and
information for successful attainment of organizational goals, managers
continuously coordinate their activities. The following benefits are offered by
53 | Page
CAMEROON
coordination.
〉 Non-routine jobs: Jobs which are non-routine in nature need constant flow
of information, both vertical and horizontal. Unless there is proper
coordination amongst these jobs, they cannot be performed efficiently.
Coordination, thus, helps in effectively carrying out non-routine jobs.
〉 Dynamic activities: Coordination helps in integrating activities which
constantly change according to changes in the environment.
〉 Standards of performance: When standards of performance against which
actual performance is to be measured are too high, managers need to
coordinate various business activities to ensure that high performance
standards are achieved.
〉 Interdependence of activities: When different units of organization are
dependent on each other for resources or information, there is greater need
for coordination amongst them. Greater the interdependence, greater is the
need for coordination. According to Thompson, there are three types of
interdependence. In pooled interdependence, organizational performance
depends upon pooled or combined performance of all the departments. This
happens when different divisions make different products not dependent on
each other. The need for coordination is, therefore, minimum. In sequential
interdependence, performance of one unit depends upon that of another
(marketing department depends upon production department to increase its
sales). This requires coordination between production and sales
departments. In reciprocal interdependence, there is give and take
relationship amongst units. With increase in degree of interdependence from
pooled to reciprocal, the need for coordination also increases.
54 | Page
CAMEROON
〉 Specialization: Specialization leads to concentration on very narrow areas

of job activity. Individuals tend to overlook overall perspective of the job.
This requires coordination to direct the activities towards a common goal.
〉 Growing organization: In growing organizations, number of people and
divisions become so large that it becomes difficult for top managers to
coordinate the activities performed by all of them. Various techniques of
coordination (rules, procedures, plans, goals, resource etc.) help managers
in unifying diverse and multiple organizational/departmental activities
towards the common goal.
〉 Promoting group effort: In the absence of coordination, each individual
and department will carry out their objectives in a manner that they perceive
as the best. People maximize their individual goals. This may, however, not
be the best for the organizational whole. Coordination helps in promoting
group effort rather than individual effort to achieve organizational goals
optimally. It harmonizes individual goals with organizational goals and
satisfies individual goals through satisfaction of organizational goals.
〉 Unity of action: Organizations have diverse work force, thoughts,
resources, goals, activity and skills. Coordination helps to unify these
diverse set of actions towards a single goal and thus, maximize their use.
〉 Synergy: Coordination facilitates the sum total of output of group to
increase by more than the sum total of their individual output. It integrates
work of different units and produces synergistic effects by increasing the
overall organizational output.
〉
55 | Page
CAMEROON
Limitations in Achieving Coordination
There are limitations also in achieving effective coordination. Some of these are
discussed below:
〉 Increased specialization: Though specialization helps to increase

organizational productivity, it also creates the problem of coordination.
People in specialized units tend to develop their own sense of the
organization's goals as how to pursue them. Higher the degree of
specialization, therefore, more difficult it is to coordinate the activities.
〉 High interdependence amongst various units: Higher the degree of
dependence of one unit on the other, greater the need for coordination and
more difficult it is to ensure coordination. Achieving coordination of
units/activities with reciprocal interdependence is more complex than for
activities with pooled interdependence.
〉 Pooled interdependence: Performance of one unit does not depend on the

other, but overall performance of each unit affects the performance of the
organization as a whole. The organizational performance depends upon
pooled or combined performance of each unit or department of the
organization. For example, an organization is structured on the basis of
products. Each product division has functional heads to look after activities
related to its product. Success of one product division does not depend upon
pooled or combined performance of each unit or department of the
organization rather it depends upon how successfully each product division
operates its activities. Reciprocal interdependence: Where there is give and
take relationship between different units, it is known as reciprocal
interdependence. If a business firm loads its trucks with finished goods and
56 | Page
CAMEROON
sends them to different locations for unloading; unless the unloaded trucks
come back to them, they cannot be reloaded for further shipment. This two-
way flow of activities between different units is a form of reciprocal
interdependence.
〉 Different approach towards the same problem: If different departments

look at the same problem in different ways, there will be problem of
coordinating their activities. If a company wants to increase its profits;
production department may want to improve the quality of goods, while
sales department may want to improve advertisement to increase the sale.
Finance department may aim at cost control as the means of increasing
company's profits. Since each department has different perception about the
way organizational profits can be increased, top managers may find it
difficult to coordinate conflicting opinions of different functional heads.
〉 Uncertainty about future: Howsoever skilled and competent may the
managers be in coordinating the activities of different units, changes in
environmental factors can make coordination difficult. Internal uncertainties
like strikes and lockouts also make coordination difficult.
〉 Informal groups: Informal groups which are strongly bonded by forces of
culture, social values and ethics can affect the ability of highly skilled
managers to coordinate organizational activities.
TYPES OF COORDINATION
Coordination can be of the following types:
Internal and External Coordination
57 | Page
CAMEROON
Vertical and Horizontal Coordination
〉 Internal and External Coordination
Coordination between the activities of departments of people working within the

organization is known as internal coordination. Coordination between activities of
the organization with units outside the organization (Government, customers,
suppliers, competitors etc.) is known as external coordination.
〉 Vertical and Horizontal Coordination
Both these types of coordination are the forms of external coordination. Vertical
coordination is achieved amongst activities of people working at different levels.
It coordinates the activities of top managers with those people of middle and
lower-level managers. It is "the linking of activities at the top of the organization
with those at the middle and lower levels in order to achieve organizational goals."
Vertical coordination can be achieved through span of management,
centralization, decentralization and delegation.
Horizontal coordination is coordination amongst the activities of people of

different departments working at the same level. It is "the linking of activities
across departments at similar levels. It links the activities of four primary
departments — production, finance, personnel and sales.
Need for horizontal coordination arises when departments depend upon

each other for information or products. When information is transmitted across
departments, departmental managers share their views on the same problem and
arrive at innovative ideas and thoughts ideal with the situation. According to Jay
R. Galbraith, "the more organizations need to process information in the course
of producing their product or service, the more methods of horizontal
58 | Page
CAMEROON
coordination they will need to use."

Different methods of achieving horizontal coordination are Stack resources,
information systems and lateral relations.
1. Stack resources means maintaining a cushion of resources like extra

time, money, material, inventory, people etc. by each department.
This provides flexibility to the organization to adapt to various
internal and external pressures without waiting for resources. It also
provides a leeway to different units to meet each other's requirements
and reduces the need for constant and continuous coordination.
2. Information systems are the systems which facilitate exchange of

information among units of the organization. Computers have eased
the work of managers in transmitting information to different
departments. Information systems facilitate effective coordination
amongst departments.
〉 Lateral relations refer to relations between peer groups of different
departments whose interaction with each other (through direct contact or
appointment of liaison officers work groups/teams) helps in arriving at
solution to the problem. Lateral relations allow the information to be
exchanged across the scalar chain rather than people placed at higher levels
in the organizational hierarchy. These relations are "coordination of efforts
through communicating and problem solving with peers in other
departments/ units, rather than referring most issues up the hierarchy for
resolution.
Lateral relations can be maintained in the following ways:
〉 Direct contact: Mostly prevalent at middle and lower levels, people of

59 | Page
CAMEROON
different departments directly communicate with each other to solve their

organizational problems without involving the top managers. Coordination
is, thus, achieved laterally without following the chain command.
〉 Liaison roles: Rather than people of different departments solving their
problems on their own, through direct contact, the problems are solved by
an individual who maintains direct contact with people of different
departments. The individual, known as the liaison officer is a common link
between the units or departments. Though he does not have formal authority
over the groups, he facilitates the flow of information and communication
between them and coordinates the efforts of diverse groups by dealing
directly with departments where problems are occurring.
〉 Task forces: Where the liaison officer cannot coordinate the activities of
departments because the inter-departmental dependence is complex or
because coordination has to be achieved amongst many departments, task
forces are created to facilitate coordination. The task force is a team where
members from different departments (where the problem has arisen) form a
group and share information with respect to the problems of their respective
departments. When solution to the problem is achieved, the task force is
dissolved and members go back to their respective positions. Coordination
amongst different departments is, thus, facilitated through task forces.
〉 Committees: "Committees are usually formally organized groups with a
designated membership and chairperson which regularly hold scheduled
meetings." Committees are general formed to look into specific
organizational problems which may be recurring in nature. It looks into the
cases of absenteeism, promotion and transfer of workers and achieve
coordination with respect to keeping the labour force satisfied in the
60 | Page
CAMEROON
organization.
〉 Managerial integrators: The role of integrating or coordinating the
activities of various departments is assigned to a specifically appointed
manager whose work is to coordinate products, projects or brands that
involve their-departmental dependence or interaction. The managers are
usually product managers, project managers or brand managers.
They ensure efficient use of scarce organizational resources over products or

projects and require integration of functional activities. They also enable the
organization to adapt to the fast-changing environment.
TECHNIQUES OF COORDINATION
The following techniques help to achieve coordination:
1) Scalar chain: Scalar chain clearly identifies every person's position in the
organization structure. It also identifies the authority and responsibility
attached to each position in the scalar chain. When one knows clearly his
position, the position of his boss and subordinates, it facilitates
coordination.
2) Rules and procedures: In organizations where simple and routine activities
are performed rules and procedures provide established standards of
performance. Organizational members perform according to rules without
going to top managers every time they face a problem. Rules and
procedures, thus, provide an effective way of achieving coordination.
3) Plans and goals: Well defined plans and goals help to achieve coordination
by ensuring that efforts of all individuals and departments are directed
61 | Page
CAMEROON
towards organizational goals.

4) Information system: People of different departments at all levels need
information for making various decisions. Effective information systems,
like computers and networking facilitate free flow of information and, thus,
facilitate coordination throughout the organization.
5) Lateral relationships: Lateral relations refer to relations between peer
groups of different departments. People of different departments constantly
interact with each other through formal and informal communication
systems. These relations refer to "coordination of efforts through
communicating and problem solving with peers in other departments or
units, rather than referring most issues up the hierarchy for resolution." An
effective system of communication, thus, facilitates coordination by
developing strong relationship amongst people of different departments.
6) Stack resources: It means keeping a backup of resources. If an

organization expects demand for its product to be 10,000 units every month,
it should produce 11,000 units to meet sudden, unexpected increase in
demand. In case it does not do so, it will have to wait to produce to meet the
increased demand. Competitors can take advantage of this and divert the
firm's customer increase their clientele. Maintaining stack resources, thus,
facilitates coordination amongst different departments and units.
7) Cooperation: Cooperation is a way of achieving coordination. Cooperation
refers to voluntary actions of members to work collectively as a group. If all
the members cooperate with each other, it will result in coordination
amongst their activities.
8) Independent units: If organization is structured in a manner that different
62 | Page
CAMEROON
units carry out all functional activities (production, finance, marketing and
personnel) with respect to their units independently, the need for
coordination gets reduced. Though this will be financially costly, it will
reduce top manager's burden to coordinate the activities of these units.
9) Committees: "Committees are usually formal organized groups with a
designated membership and chairperson which regularly conduct scheduled
meetings." Committees are formed to solve specific organizational
problems like leave committee. This looks into cases of absenteeism and
transfer of workers and achieves coordination by keeping the organizational
work force satisfied at their jobs.
10) Managerial integrators: Managerial integrators are specially
appointed managers who continuously coordinate the products, project or
brand managers who coordinate the activities of work groups carrying out
different projects or producing different products.
PRINCIPLES OF COORDINATION
Principles refer to fundamental truths on which an action is based. In order to

achieve coordination, managers follow the following principles of coordination:
〉 Unity of command
Unity of command means one boss for one subordinate. It will be difficult to
achieve coordination if one individual has to report to more than one boss. Unity
of Command, thus, helps in coordinating the activities of individuals and
departments.
63 | Page
CAMEROON
〉 Early beginning
It follows the principle of earlier the better. Managers should initiate efforts to
coordinate organizational activities right from the planning stage. If plans are
implemented without coordination in mind, it will become difficult to coordinate
the working of people at later stages.
〉 Scalar chain
It refers to chain or link between top managers and lower managers. It is a

hierarchy of levels where information and instructions flow from top to bottom
and suggestion and complaints flow from bottom to top. This chain facilitates
coordination as top managers pass only those orders and instructions down the
chain which are necessary for subordinates to work efficiently. Subordinates also
pass upwards only those suggestions and complaints which they feel should be
brought to the notice of top managers through middle
Cooperation Coordination
1. Attempt It is voluntary attempt of It is deliberate attempt of

members It is narrow in managers. It is wider in scope
scope
Relationship amongst members is
2. Scope
Relationship amongst formal
members is informal
3. Relation
It is an important technique
ship
of coordination.
It is not a technique to achieve
It is a collective effort of
64 | Page
CAMEROON
group members that arises cooperation.
4. Nature out of their need to work

together to attain
a common goal
It is an attempted effort of
managers to unify the actions of
5. Concept
all the organizational members.
Table 1
SUMMARY
When the organizational structure is created and departments are made, managers
coordinate activities of these departments to achieve organizational goals. Top
managers communicate the organizational goals to departmental managers and
help them carry out the functions of learning, organizing, staffing, directing and
controlling for their respective departments. They integrate objectives of the
organization with the objectives and activities of departments through
coordination, in order to harmonize departmental goals with organizational goals.
Coordination, thus, helps in order to coordinate the work of different departments
and within each department, it integrates the functions of management.
Coordination is, therefore, rightly called the essence of management. It helps each
managerial function and each departmental activity contributes to overall
organizational goals.
〉 Coordination while planning: When plans are made by managers, they

ensure that different types of plans (long-term and short-term, strategic and
routine), policies, rules and procedures operate in harmony and coordination
65 | Page
CAMEROON
with each other so that various departments effectively follow these plans.
〉 Coordination while organizing: Division of work into departments on the
basis of similarity of activities, appointing people to manage these
departments, defining their authority and responsibility and creating the
organizational structure are done to coordinate departmental activities with
the overall organizational goals. If the activities are divided haphazardly
without coordination, some activities may not be assigned to individuals
and some may be assigned to more than one individual.
〉 Coordination while staffing: The jobs having been created, managers
ensure that individuals are placed on different jobs according to their skills
and capabilities. This ensures placing the right person at the right job in
order to achieve coordination amongst their work activities.
〉 Coordination while directing: When a manager directs his subordinates
through motivation, leadership and communication, he coordinates the
various organizational activities. It is also an attempt to harmonize
individual goals with organizational goals. Directing maintains unity and
integrity amongst activities of members in the organization.
〉 Coordination while controlling: Controlling ensures that actual
performance is in conformity with planned performance. The purpose of
controlling through budgets or information system is to coordinate the
various organizational activities.
Every managerial activity is, thus, coordinated to contribute towards

organizational goals. Coordination is required throughout the organization.
Coordination is achieved by structuring the organization in such a way as to

ensure vertical coordination between hierarchical levels of management and
66 | Page
CAMEROON
horizontal coordination across individuals and work units at similar levels." The
principles of management like unity of command and scalar chain ease the task of
managers in effectively coordinating various managerial functions.
2.1.3.3 CONTROL AND EVALUATION

1. Budgetary Control Theory
According to Robinson and Last (2009), budgeting is used by firms as a framework

for spending and revenue allocation. Organizations should come up with effective
budgeting systems in order to ensure that their firm’s resources are not wasted.
Budgeting systems help in ensuring that the outputs produced and services
delivered achieve their set objectives. Financial viability is determined by the level
of income a firm is able to maintain in any given time (Robinson, 2009).
The firm has to put clear controls that ensure that the budget is well maintained and
allocated as required and strictly followed so that variances can be explained and
mitigated as much as possible. Robin and Last (2009) assert that, if a firm has
lesser income however, it might have to find a way to fund its estimated budget by
borrowing and tax restructuring.
According to Sawhill and Williamson (2001), budgets can be used as indicators of

measuring ruling governments’ performances. Budgets are a statement of whether
these governments are competent in administering their national goals through
good resource use. It is therefore very crucial that an organization should
understand its budgeting systems as well as giving priority to urgent matters that
require attention to firm’s control tools.
67 | Page
CAMEROON
Determinants of Budgetary Control

There are numerous determinants that influence the effective implementation of
budgets among organizations. Those determinants, according to Srinivasan (2005),
include: availability of financial resources, skilled human resource, and
participation of both staff and other stakeholders in the budgeting process, effective
planning, evaluation, staff motivation, monitoring and control of the budget
process.
〉 Adequate Availability of Financial Resources
Despite the adequate availability of financial resources, firms are expected to

allocate adequate financial resources and other structures efficiently so as to ensure
effective implementation of projects and other activities within the firm such as
adequate allocation of funds to facilitate effective budget implementation. An
organization must ensure that it has adequate access to financial resources in order
to finance its projects and to carry out its activities. According to Dunk (2001), the
management team should plan and come up with budgeted estimates before
implementing organizational projects.
〉 Competence of Human Resource
Firms are expected to be well equipped with knowledgeable and skilled employees
who are well conversant with budgetary control measures to effectively implement
the budgetary control processes and allocation as well as having the relevant
industry experience. According to Horngren (2002), in order to successfully
execute firms’ activities, firms must ensure that they have competent human
resource with technical knowhow on efficient and effective means of budgetary
control processes and procedures.
68 | Page
CAMEROON
〉 Participation of both Staff and other Stakeholders
During budgetary formulation, all staff and other stakeholders responsible for
achieving results should be consulted. Budgetary control systems prosper only
when they compact a mutual understanding of superiors and subordinates. Firms
should communicate budget decisional outcomes with all the relevant personnel.
To ensure that the process of implementing the budget is successful, management
and employees must work together to ensure that all stakeholders’ interests are
fully represented when making key decisions involving budgetary allocations in
key projects. Budgets play an important part in the communication of objectives,
targets and responsibilities throughout the organization. Full participation in budget
and budgetary control process assures full co-operation and commitment for
making budgets successful which makes budgets realistic and workable (Simiyu,
2002).
〉 Proper Planning
The budgetary period duration is usually one year. The plan should to be in line
with the long-term development strategy of the firm, although in the shorter term of
a budget year, conditions may prevail which could filter this aim. It is important
that feedback is made available to the managers responsible for budget operations
through monthly budget reports. These reports have comparisons between the
budget and the actual position and they draw differences which are known
technically as variances. The management team ought to define these patterns of
expenditure and revenue over the life of the project or the activity that the firm is
undertaking.
69 | Page
CAMEROON
A predetermined budget of possible costs that was incurred carrying out the
activities planned in a project should be made. A realistic planning of finances is
vital to the implementation of a project or program (Joshi & Abdulla, 1996). The
budget plans must be properly coordinated in order to remove all possible
bottlenecks. Individual budgets should be coordinated with one another to ensure
that the implementation process is conducted properly in order to save time and
costs (Horngren, Forster & Dater, 1997). Thus, before formulating the budgets, the
policy to be pursued during the forthcoming trading period should be established
(Dunk et al., 2001).
〉 Evaluation
Simiyu (2002) states evaluation as the process of developing a plan in cooperation

with an evaluation workgroup of stakeholders who foster common objective for
effective budgetary control. Hancock (2009) says to enhance effectiveness and
transparency the management requires to be involved in both monitoring and
evaluation.
〉 Monitoring and Control of Budget Process
Once the budgets have been implemented they need to be monitored and controlled
to ensure effectiveness in aligning budgets over a given period of time (Horngren et
al., 1997). An open and professional approach to budget planning boost investors,
development financial partners and national or international donors to make
financial resources available (Otley & Van der Stede, 2003). This is achieved
through ensuring that the estimated budget does not deviate from the actual
outcome in order to make necessary adjustment from any variance noted.
〉 Staff Motivation
70 | Page
CAMEROON
Challenging but realistic targets in budgeting can play a significant part in

motivating management. Hansen et al. (2003) In addition says that targets must be
measurable and easier to achieve, while managers should be involved in setting
own budgets. The budget acts as parameter for top management to measure
performance of their teams. It should be noted, that adherence to the budget alone
may not measure all aspects of management’s performance. Hansen et al. (2003)
asserts, for an effective budget implementation, the budget plan should be clearer
and more accurate, the financial resources readily available and sufficient, while
actively involved staff in the budget making should be motivated to facilitate
successful implementation of the budget process.
2.1.4 DEPENDENT VARIABLE: NON-FINANCIAL PEROFRMANCE OF

SMALL AND MEDIUM SIZE ENTERPRISES
2.1.4.1 NON-FINANCIAL MEASURES OF PERFORMANCE

Non-financial measures of performance are metrics that companies use to gauge
their success and performance in specific areas, without considering financial
metrics. These measurements avoid using monetary values to denote success or
failure. Instead, they focus on other business areas and typically look at the
company's future prospects. In comparison, financial measures are lagging metrics
that focus on past performance.
Although non-financial performance measures don't directly correlate with
financial performance, they're often still numerical in nature. They can either be
quantitative or qualitative and these metrics often use numbers to show an
organization’s progress. One particularly crucial area for this is employee soft
71 | Page
CAMEROON
skills, as they're one of the biggest contributors to a company's non-financial

success and are flexible enough to allow for various measurements
Examples of non-financial performance measures

Below are six examples of non-financial performance measures:
〉 Brand Preference
This measurement is a helpful indicator that assesses how a brand performs against
its competitors. Also, it gives you a good idea about the performance of a
company's services or products. It looks at how customers prefer one brand over
another and is particularly useful for conducting awareness studies regarding an
organization’s branding efforts.
 Take Rate
The take rate is another measurement that businesses often use to track customer
engagement. It assesses how many potential customers do something after
receiving a call to action, such as clicking a 'Contact now' button on a website or
signing up for a free trial. The more people act on the call to action, the better the
take rate.
For example, if a company offers a 10% discount for anyone who signs up for a
newsletter, the company can calculate the take rate to measure the discount's
success. Assuming the company sends the email to 1,000 customers, with 100
customers accepting the offer, you can establish a take rate. To do this, simply
divide the 100 uptakes by the 1,000 total recipients and multiply by 100 to convert
this into a percentage, which gives you a 10% take rate.
72 | Page
CAMEROON
〉 Customer Retention and Churn

Customer retention and churn are two related metrics that assess how many
customers stay with the company or take their business elsewhere. The customer
retention metric looks at how many customers return to a company to purchase
goods or services. In contrast, churn does the opposite and looks at how many
customers stop buying a business's goods or services after an initial purchase.
All companies look to increase retention rates while keeping churn rates down, as
this signifies more people continuing to make purchases with a company and fewer
leaving to buy from the company's competitors. One issue with these metrics is
defining when a customer stop being a customer. For instance, if you sell a
subscription service, the churn period might not occur until 28 days after the lapsed
renewal date.
〉 Customer Experience
Customer experience is another non-financial performance measure that aligns with
churn and retention rates. Businesses typically measure customer experience by
looking at all the business areas where a customer directly interacts with the
company, such as a customer support team. From here, the company decides how
to effectively measure a good customer experience against a poor one. For
example, short wait times when calling a customer support team may indicate a
good customer experience.
 Innovation
Innovation is an interesting metric that looks at a company's ability to create new

products or services and find new ways to penetrate markets. There are a few ways
73 | Page
CAMEROON
to measure this, such as looking at the number of new product lines the business
creates or how strongly its new products or services perform over a specific period.
Both of these metrics assess the company's overall performance in terms of
bringing value to customers through new product offerings.
〉 Market Share
Market share is an all-encompassing non-financial performance measure that looks
at the level of dominance the company has in a specific market. All the previous
measures, such as take rates and customer experience, impact a company's market
share. Increasing the company's market share improves the business in multiple
ways. For instance, it leads to improved financial health and stronger operating
margins.
To measure market share, businesses require knowledge of the potential number of

customers in their market, alongside the potential amount of money they can make.
From this information, a business can calculate its market share by comparing these
findings to its own sales and customer numbers.
Performance measures
Financial measures tend to focus on indicators that look into past performance,
making them relatively easy to analyze. Despite this, they often lack context, such
as why performance fell over a certain period. Non-financial performance measures
help add context to this analysis. For example, if the marketing resources fall short
in one quarter, the next quarter might experience a drop-in sale.
The other main reason why non-financial measures are crucial for businesses is that
you can align them with certain parts of a business's strategy. It's unlikely for an
74 | Page
CAMEROON
organization to include a mission or vision statement that focuses on financial

measures. Instead, they tend to align with things like best branding and this might
be challenging to equate to fiscal indicators.
Non-financial measurements, such as brand awareness figures, are much more

useful in this regard.
Benefits of tracking non-financial performance measures

Although financial measures are usually vital for a company to be aware of to
understand their performance, non-financial measures provide several benefits that
help companies measure their performance with additional context and fidelity.
Some of the main benefits associated with tracking non-financial performance
measures include:
〉 Determines strengths and weaknesses: By looking at these metrics,
companies can gain a greater
〉 awareness of their strengths and weaknesses. For example, certain aspects
of customer service, such as long hold times, are easier to identify by
using non-financial performance measures.
〉 Tracks business performance: One of the main benefits of using non-
financial performance measures is that they help track business
performance. For instance, if the HR team overspends, these metrics track
this issue and may highlight high staff turnover rates as the cause.
〉 Improves staff feedback: These measures are also a great way of
guiding staff to achieve success and align with the business's overall
strategy. By using these metrics, staff gain the opportunity to receive
feedback that tells them what targets to meet to succeed in their roles.
75 | Page
CAMEROON
〉 Adjusts for external factors: non-financial performance measures also

consider external risks, such as market volatility or unforeseen global
events. Due to this, using these metrics allow companies to gain a clear
overview of their performance, with any external factors included in this
outlook.
Drawbacks of non-financial performance measures

Although non-financial performance measures offer a lot of additional insights and
context into a company's performance, there are some drawbacks associated with
these metrics. Some of these drawbacks include:
〉 Creates implementation costs: Companies that focus on too many non-
financial performance measures may find that they tend to invest lots of time
and financial resources into implementing these metrics. These costs may
outweigh the benefits they provide, depending on the specific organization
and the industry in which they operate.
〉 Increases workload: Using many types of non-financial performance
measures may lead to an increase in the management team's workload. This
increased workload may prevent them from implementing positive changes
to an organization that might improve its performance.
〉 Provides little value: Sometimes, a company may not implement these
measures effectively, which may lead to an organization receiving little value
from these metrics. When this happens, these metrics may not enable an
organization to identify improvement areas.
〉 Creates too much flexibility: As there isn't a definitive way to carry out
these measurements, it might be challenging to compare non-financial
performance measures between companies. Often, various companies rank
76 | Page
CAMEROON
and implement these metrics differently, making these comparisons

unhelpful.
〉 Produces more inaccuracies: As these measures are typically qualitative
instead of quantitative, it may sometimes be challenging to ascertain their
accuracy. For instance, the results from questionnaires might provide little
value on some occasions due to the lack of respondents involved, leading to
inaccuracies and unreliable measurements.
An organization cannot succeed using non-financial performance measures if it
does not consider the determinants of managerial performance which are the
following for its employees;
〉 Motivation
〉 Satisfaction
〉 Organizational commitment
〉 Stress
2.1.4.2 MANAGERIAL PERFORMANCE
The question of what makes some small firms outperform others is central to the
area of small business research. The aim of this paper is to add knowledge to this
complex and elusive question. Even if available research is extensive, we will in
this paper argue that our capacity to really provide an answer to this surely
important question is constrained by a lack of knowledge of a certain kind/quality.
We will shortly pinpoint what kind of knowledge we talk about, but we will first
give a short overview of different explanatory approaches that have been common
in previous endeavors to answer the question.
77 | Page
CAMEROON
Previous research on small firms’ growth has tried to find an answer to the question
of why some firm outperform others by studying if it is something the entrepreneur
is (Miller & Toulouse, 1986; Delmar, 1996); the firm does (Covin & Slevin, 1989;
Wiklund, 1998); the firm have (Zander & Zander, 2005); or something that the
entrepreneur has (Dyke Fischer, 1992)? We will in this paper not give a thorough
review of this research as this has been done elsewhere (see Davidsson,
Achtenhagen and Naldi, 2006; Dobbs and Hamilton, 2007 for recent reviews). We
will instead only note that in spite of the vast research that have addressed the
question, some researchers argue that our understanding of what makes some firms
outperform others is under developed.
More specifically, some have proposed that we should pay interest to the behavior
of the entrepreneur (Gartner, 1988). Behind this plea lies the implicit question if it
might be that the answer to why some firm outperform others is found in a better
understanding of what the manager does? The answer to the question of how
managerial behavior relates to small firm performance has been asked for (Gartner,
1988; Gartner, et al., 1992; Sarasvathy, 2001) and addressed in different ways
(Delmar 1996; Sadler-Smith et al., 2003) during the last decade. The ambition of
this paper is to contribute knowledge that helps us better understand this
relationship.
In accordance, the overall question that seeks an answer in this paper is if it is

possible to observe a difference in how top-managers in growing and slow-growing
firms (but otherwise similar firms) behave. The search for an answer to this
question is a first step towards a better developed understanding of if the behavior
of the small firm top-manager has an effect on the performance of the firm, and if,
in what way. Consequently, it is important to note that our ambition, in this study,
78 | Page
CAMEROON
is not primarily to relate managerial behavior to firm performance in a

comprehensive manner. Or modest ambition is to explore if we can identify any
differences in the way comparable managers in two groups of similar growing and
slow-growing firms behave.
The main contribution of this study is its focus on comparing managerial behavior
in fast-growing and slow-growing small firms in a homogenous sample. It has been
found that the heterogeneity of the population of small firms make explorations
seeking answers that are possible to generalize to small firms in general difficult. In
this paper we have chosen to focus on small industrial firms with similar size
operating in similar industries, managed by managers with similar age and
management experience.
CONCEPTUALIZING MANAGERIAL PERFORMANCE
In order to find an answer to the question “Is it something that the manager does?”
that affect small firm performance we need to develop a way to understand
managerial behavior. In this paper we have chosen to theoretically relate to the area
of research on managerial work that goes back at least to Carlsson (1951) study2.
Characteristic for this research is the interest of what managers do, and the results
from the research has provided an understanding of the managers’ jobs that was
very different from how it was reputed to be (Hales, 1986, p.103). When it comes
to how “what managers do” has been operationalized, a number of different
approaches can be identified. Some pay interest to the “work” of the manager,
while others chose to study “managerial activities” or “managerial behavior”.
79 | Page
CAMEROON
A review of this literature reveals a conceptual turmoil (Stewart, 1989), but we will
in this paper not elaborate this any further. We will in this research study
managerial behavior in terms of the activities of the managers in accordance with
the terminology developed by Mintzberg (1973). This means that we seek to
describe how the managers in growing and slow-growing firms dispose their time
in a fundamental sense, and if they differ in any respect. What activities do the
managers engage in? How much time do they spend in deskwork, telephone,
unplanned and planned meetings, and in tours? With whom do they work? Where
do they work? What are the characteristics of their work?
Except for evaluate similarities and differences in the managers’ activities, we will
also Compare the roles that the managers in the two groups shoulder in their firms.
The role concept has been used in different ways, but we will in this paper adopt
the widely dispersed conceptualization of what managers do as inherent in the
concept of role as developed by Mintzberg (1973).
In line with Mintzberg’s (1973) understanding of what managers do, we subsume

to the following conceptualization. The work of managers consists of three basic
elements. First, they interact with other people. Second, they process information.
Third, they make decisions. In an extended conceptualization another basic element
of managerial work has been identified. In addition to these “managerial” activities,
all managers – to a different extent – engage in operational work.
Managerial roles
Management is a complex and challenging task so managers have to play various

roles to manage the organization. Managerial roles refer to a specific behavior
80 | Page
CAMEROON
required for managing the tasks. A management thinker Mintzberg has identified
10 different roles that manager has to perform in the organization for managing the
organization. He has classified these 10 different roles into 3 (three) categories i.e.
interpersonal role, informational role, and decisional role. Managers have to adopt
these roles to perform their works like planning, organizing, staffing, directing,
controlling, etc. smoothly.
ROLES OF MANAGER
〉 Interpersonal Role
〉 Informational Role
〉 Decisional Role
INTERPERSONAL ROLE: Managers perform an interpersonal role in order to

coordinate and interact with organizational members. through this role, the
manager provides direction and instruction to the employees. And also build
relationships inside and outside of the organization.
Interpersonal role is sub-classified into three activities;
〉 Figurehead role
A manager should perform a figurehead role. Figurehead's role means participating

in ceremonies such as greeting and receiving visitors, chairing board meetings, and
symbolically representing the organization.
〉 Leader role
81 | Page
CAMEROON
The leader role refers to directing, coordinating, motivating, staffing, and

controlling the subordinates. In other words, managers are responsible to bring
human resources into action.
〉 Liaison role
The liaison role refers that maintaining good relationships outside the organization.
It helps to build a good image in the market which also contributes to increasing the
market share. Managers have also to build a good relationship with other
organizations, groups, suppliers, etc.
INFORMATIONAL ROLE: Managers have to develop a network of contact and

the relation both within and outside the organization for the collection, procession,
and dissemination of information. Informational role is sub-classified in three
types;
〉 Monitor role
These roles state that the manager should monitor all the activities of the
organization and collect information about the work performed.
〉 Disseminator role
These roles state that manager should collect the information from the employee
and also from outsiders and transmits it to the members of the organization. They
should provide the information to the subordinates also and keep them informed of
what is going in the organization and precautions to be taken.
〉 Spokesperson role
82 | Page
CAMEROON
The spokesperson's role says that the manager should transmit the information
about the organization`s plan, policies, action, and result to the outsider and serves
as an expert on the organization`s industry.
DECISIONAL ROLE: Decision-making is the vital function of every manager.

These roles represent the manager's power or authority to take decisions. Managers
have to take the right decision at right time for the smooth performance of the
organization. Decisional role is sub-classified in four types;
〉 Entrepreneur
This role is concerned with planning and initiating change within the organization.
The manager initiates changes, new projects and also identifies new ideas for the
success of the organization.
〉 Disturbance handler role
This role is concerned with maintaining a good working environment for the
smooth performance of an organization. and also deals with threats to the
organization. The manager takes corrective action during disputes among
subordinates or environmental crises.
〉 Resources allocator role
This role is concerned with dealing with the managerial function of allocating
resources (money, people, time, equipment, etc.) to different units and also to
different levels of subordinates.
〉 Negotiator Role
83 | Page
CAMEROON
This role involves representing as well as protecting the organization`s interest in

dealing with insiders and outsiders to add value to work.
MANAGERIAL SKILLS
Management is a complex and challenging task. Managers need different types of

skills to perform their works. Robert L Katz groups these skills into three
categories. They are Conceptual Skills, Human Skills, and Technical Skills. A
manager must have these skills for their administrative performance and to be a
successful manager, but the level of requirement of these skills depends upon the
level of the manager.
Types of Managerial Skills
The skills required to the different level of a manager to be a successful and good
manager are shown below;
〉 Conceptual Skills
〉 Human Skills
〉 Technical Skills
84 | Page
CAMEROON
Figure 4: Managerial levels
〉 Conceptual Skill
Conceptual skills refer to the ability to visualize the entire picture of an

organization's environment i.e. internal and external. It is the ability to analyze and
diagnose complex situations or problems. This skill especially needs in the top
level of management because this skill helps the top-level managers to be properly
identified, analyzed, diagnose, anticipated, and managed the situation which is
helpful to make plans, policies, and strategies.
〉 Human Skill
Human skills involve the ability to understand, lead, communicate, coordinate and
control the behavior of other individuals and groups. As we know all the levels of
human resources help to bring an organization into action. So, the manager needs
knowledge and skills in the field such as communication, motivation, conflict
85 | Page
CAMEROON
management, etc. Therefore, every level of management requires the same level of
human skills.
〉 Technical Skills
Technical skills refer to the ability and knowledge in using the equipment,
techniques, and procedures involved in specific tasks. The first-line supervisors
need the technical skills the most because they have to see that goods and services
are produced and delivered.
FUNCTIONS OF MANAGEMENT
Fayol’s Functions of Management
Henri Fayol (1841 – 1925) defined the five functions of management in his 1916
book Administration Industrielle et Generale, which defined his general theory of
business administration and surprisingly, this text is still seen as a one of the basic
definitions of management. He defined five primary functions of management and
14 principles of management: The five functions are:
1. To forecast and plan.
Forecasting determines what is likely to be required form the organization;

opportunities and demands for its services or products, this information helps
define the current set of prioritized objectives. Planning is the function of
management that involves determining the best course of action for achieving the
prioritized objectives of the organization as defined and agreed by the executive
and the governing body. Planning requires managers to be aware of environmental
86 | Page
CAMEROON
conditions facing their organization (constraints, resources, competition, etc.), the

capacity and capability of the organization, and to forecast future conditions and
trends. There are many different types of plans and planning:
〉 Strategic planning involves analyzing competitive opportunities and threats,

as well as the strengths and weaknesses of the organization, and then
determining how to position the organization to best achieve its objectives6.
Strategic planning has a long-time frame and is the link between governance
and management with a shared responsibility to develop the ‘right strategy’
to ethically achieve the organization’s objectives.
〉 Tactical planning is intermediate-range planning that is designed to develop
relatively concrete and specific means to implement the strategic plan.
〉 Operational planning is short-range planning that is designed to develop
specific action steps that support the strategic and tactical plans.
〉 Project and program planning are short to medium term focused on
achieving the objectives the project or program has been created to deliver.
2. To Organize
Organizing involves developing an organizational structure (hierarchy, divisions,

departments, etc.) and allocating human and other resources to ensure the
accomplishment of the organization’s objectives and implementation of its strategic
plan. The structure of the organization is the framework within which effort is
coordinated and is shaped by the ethical and cultural requirements of the governing
body. It involves the design of individual jobs within the organization and striking
a balance between the need for worker and management specialization and the need
for people to have jobs that entail variety and autonomy. Many jobs are now
87 | Page
CAMEROON
designed based on such principles as job enrichment and teamwork. The

management framework needs to support the needs of the governance framework,
and be accountable to the governing body for the actions and achievements of the
organization.
3. To Command or Direct Subordinates
Providing direction and leadership to lower-level managers and workers so that

they are aware of their obligations and are willing to carry them out efficiently and
effectively.
〉 Leading
It involves influencing others toward the attainment of organizational objectives.

Effective leading requires the manager to motivate subordinates, communicate
effectively, and use his/her power and authority8 judiciously. If managers are
effective leaders, their subordinates will be enthusiastic about exerting effort
toward the attainment of the objectives.
4. To Coordinate
Coordination is inherent in the other aspects of management and is primarily

focused on organization of the different elements of the organization, or an activity,
so as to enable them to work together effectively:
5. To Control
A manager must receive feedback about a process in order to analyze any

deviations from the plan and make necessary adjustments to correct negative
deviations and prevent future deviations. Controlling consists of three basic steps,
88 | Page
CAMEROON
plus the requirement to provide assurance that the controlling process if functioning
effectively:
〉 Establishing the plan or required performance standards;

〉 Comparing actual performance against the required standards at appropriate
intervals, and taking corrective or preventative action when necessary.
〉 Providing assurance to the organization’s governing body that all levels of
management and staff are held accountable for their actions and are
performing and conforming to the organizations objectives and governing
principles.
Inherent in all of these functions is decision making, the primary role of

management is to make decisions and value judgements within the framework set
by the governing body, including the organization’s ethical and cultural standards,
to achieve the objectives set by the governing body. This required the delegation of
appropriate levels of responsibility and authority to decision makers and the
decision makers being prepared to accept this responsibility and be accountable for
their actions.
The primary output from management can be defined as information and

instructions that have to be communicated to others. The communication is firstly
to the workers so they understand what has to be produced, where and when;
secondly to the governing body to provide assurance that the right decisions have
been made and the right things are being produced in the right ways applying the
organization’s policy framework correctly.
89 | Page
CAMEROON
Fayol’s Principles of Management
The principles of management define some of the ways the functions of

management can be implemented. Some of these original principles need adjusting
to remain effective in some modern organizations, but the most of the concepts are
still valid: The principles of management define some of the ways the functions of
management can be implemented. Some of these original principles need adjusting
to remain effective in some modern organizations, but the most of the concepts are
still valid:
〉 Division of work: This principle is the same as Adam Smith’s ‘division of

labor’ and Taylor’s ‘scientific management’. Specialization increases output
by making employees more efficient. Division is still important, but modern
trends are towards teams and self-managed work groups.
〉 Authority: Managers must be able to give orders. Authority gives them this
right and flows from their position in the hierarchy. Responsibility arises
wherever authority is exercised and effective leadership reinforces authority.
〉 Discipline: Employees must obey and respect the rules that govern the
organization. Good discipline is the result of effective leadership, a clear
understanding between management and workers regarding the
organization’s rules, and the judicious use of penalties for infractions of the
rules.
〉 Unity of command: Every employee should receive orders from only one
superior, from top to bottom in an organization. This is not practical in
matrix organizations and allowance needs to be made for the increased
complexity of the working environment.
90 | Page
CAMEROON
〉 Unity of direction: Each group of organizational activities that have the

same objective should be directed by one manager using one plan.
〉 Subordination of individual interests to the general interest: The interests
of any one employee or group of employees should not take precedence over
the interests of the organization as a whole. One outcome of effective
leadership is the willingness of people to cooperate for the greater good.
〉 Remuneration: Workers must be paid a fair wage for their services. This
picks up one of the key tenets of Henry Gantt’s work.
〉 Centralization: Centralization refers to the degree to which subordinates
are involved in decision making. Whether decision making is centralized (to
management) or decentralized (to subordinates) is a question of proper
proportion. The task is to find the optimum degree of centralization for each
situation.
〉 Scalar chain: The line of authority from top management to the lowest ranks
represents the scalar chain. Communications should follow this chain.
However, if following the chain creates delays, cross communications can be
allowed if agreed to by all parties and superiors are kept informed. This picks
up the concepts of the bureaucratic school of management.
〉 Order: People and materials should be in the right place at the right time.
Another key tenet of Henry Gantt’s work.
〉 Equity: Managers should be kind and fair to their subordinates. This picks
up the concepts of the humanistic school of management.
〉 Stability of tenure of personnel: High employee turnover is inefficient.
Management should provide orderly personnel planning and ensure that
replacements are available to fill vacancies.
91 | Page
CAMEROON
〉 Initiative: Employees who are allowed to originate and carry out plans will
exert high levels of effort. The concept of ‘bounded initiative’ can be traced
to concept of ‘directive command.
〉 Esprit de corps: Promoting team spirit will build harmony and unity within
the organization. This picks up on Karol Adamiecki’s focus on
harmonization and team work.
DETERMINANTS OF MANAGERIAL PERFORMANCE

The factors determining managerial performance in an organization which will be
explained in this topic will be narrowed down to motivation, organizational
commitment and job satisfaction and stress.
A) MOTIVATION
High performance is achieved by well-motivated people who are prepared to

exercise discretionary effort. Even in fairly basic roles, Hunter et al (1990) found
that the difference in value added discretionary performance between ‘superior’
and ‘standard’ performers was 19 per cent. For highly complex jobs it was 48 per
cent. To motivate people, it is necessary to appreciate how motivation works. This
means understanding motivation theory and how the theory can be put into
practice, as discussed in this chapter. Motivation defined a motive is a reason for
doing something. Motivation is concerned with the strength and direction of
behavior and the factors that influence people to behave in certain ways. The term
‘motivation’ can refer variously to the goal’s individuals have, the ways in which
individuals chose their goals and the ways in which others try to change their
behavior.
92 | Page
CAMEROON
The three components of motivation, Arnold et al (1991)
〉 Direction – what a person is trying to do.

〉 Effort – how hard a person is trying.
〉 Persistence – how long a person keeps on trying.
Motivating other people is about getting them to move in the direction you want
them to go in order to achieve a result. Motivating yourself is about setting the
direction independently and then taking a course of action that will ensure that you
get there.
Motivation can be described as goal-directed behavior. People are motivated when

they expect that a course of action is likely to lead to the attainment of a goal and a
valued reward
〉 one that satisfies their needs and wants. Well-motivated people engage in
discretionary behavior
〉 in the majority of roles there is scope for individuals to decide how much
effort to exert. Such people may be self-motivated.
Types of motivation
The two types of motivation are intrinsic motivation and extrinsic motivation.
1. Intrinsic motivation
Intrinsic motivation can arise from the self-generated factors that influence
people’s behavior. It is not created by external incentives. It can take the form of
motivation by the work itself when individuals feel that their work is important,
interesting and challenging and provides them with a reasonable degree of
93 | Page
CAMEROON
autonomy (freedom to act), opportunities to achieve and advance, and scope to use
and develop their skills and abilities.
Deci and Ryan (1985) suggested that intrinsic motivation is based on the needs to
be competent and self-determining (that is, to have a choice). Intrinsic motivation
can be enhanced by job or role design. According to an early writer on the
significance of the motivational impact of job design (Katz, 1964): ‘The job itself
must provide sufficient variety, sufficient complexity, sufficient challenge and
sufficient skill to engage the abilities of the worker.’ In their job characteristics
model, Hackman and Oldham (1974) emphasized the importance of the core job
dimensions as motivators, namely skill variety, task identity, task significance,
autonomy and feedback...
2. Extrinsic motivation
Extrinsic motivation occurs when things are done to or for people to motivate them.
These include rewards, such as incentives, increased pay, praise, or promotion; and
punishments, such as disciplinary action, withholding pay, or criticism.
Extrinsic motivators can have an immediate and powerful effect, but will not
necessarily last long. The intrinsic motivators, which are concerned with the
‘quality of working life’ (a phrase and movement that emerged from this concept),
are likely to have a deeper and longer-term effect because they are inherent in
individuals and their work and not imposed from outside in such forms as incentive
pay.
Category Type Theorist(s) Summary of Implications
94 | Page
CAMEROON
theory
Instrumentality Taylorism Taylor If we do one Basis of crude

(1911) thing it leads to attempts to
another. People motivate
will be people by
motivated to incentives.
work if rewards Often used as
and punishments the implied
are directly rationale for
related to their performance-
performance related pay
although this
is seldom an
effective
motivator
Reinforcement The Hull (1951) As experience is Provides

motivation gained in feedback
process satisfying needs which
people perceive positively
that certain reinforces
actions help to effective
achieve goals behavior.
while others are
95 | Page
CAMEROON
unsuccessful.
The successful
actions are
repeated when a
similar need
arises.
Needs (content) Hierarchy Maslow A hierarchy of Focuses

theory of needs (1954) five needs exist: attention on
physiological, the various
safety, social, needs that
esteem, self- motivate
fulfillment. people and the
Needs at a notion that a
higher level only satisfied need
emerge when a is no longer a
lower need is motivator. The
satisfied. concept of a
hierarchy has
no practical
significance.
A simpler and
more
ERG
96 | Page
CAMEROON
theory convincing
approach to
Alderfer Three
Maslow’s on
(1972) fundamental
the motivation
needs: existence,
provided by
relatedness and
needs.
growth.
Draws
attention to the
Managerial
needs of
needs McClelland
Managers have managers and
theory (1973)
three the important
fundamental concept of
needs: ‘achievement
achievement, motivation’
affiliation and
power.
Process/ Expectancy Vroom Effort The key

cognitive theory (1964), (motivation) theory
theory Porter and depends on the informing
Lawler likelihood that approaches to
97 | Page
CAMEROON
(1968) rewards will rewards, ei

follow effort and that they must
that the reward be a link
is worthwhile. between effort
and reward
(line of sight),
the reward
should be
achievable and
should be
worthwhile.
Goal theory Latham and Motivation will Provides the

Locke improve if rationale for
(1979) people have performance
demanding but management,
agreed goals and goal setting
receive and feedback.
feedback.
Equity Adams People are better Need to have

theory (1965) motivated if equitable
treated equitably reward and
employment
practices
98 | Page
CAMEROON
Social Bandura Emphasizes the Influences

learning (1977) importance of performance
theory internal management
psychological and learning
factors, and
especially development
expectancies practices
about the value
of goals and the
individual’s
ability to reach
them
Two-factor Related to Herzberg et Two groups of Identifies a

model needs theory al (1957) factors affect job number of
satisfaction: (1) fundamental
those intrinsic to needs ei
the work itself; achievement,
(2) those recognition,
extrinsic to the advancement,
job (extrinsic autonomy and
motivators or the work
hygiene factors) itself.
such as pay and Influences
working approaches to
99 | Page
CAMEROON
conditions. job design (job

enrichment).
Underpins the
proposition
that reward
systems
should provide
for both
financial and
non-financial
rewards.
General McGregor Theory X is the Emphasizes

approaches (1960) traditional view the importance
Theory X and
to that people must of
theory Y
motivation be coerced into commitment,
performing; rewards and
theory Y is the integrating
view that people individual and
will exercise organizational
self-direction needs.
and self-
direction in the
service of
objectives to
100 | Page
CAMEROON
which they are

committed.
Table 2: Motivation theories
Leading motivation theories
a. Reinforcement theory.
b. Instrumentality theory.
c. Content or needs theory.
d. Process or cognitive theory.
e. Herzberg’s two-factor (motivation-hygiene) theory.
f. McGregor’s theory X and theory Y.
〉 Instrumentality theory
‘Instrumentality’ is the belief that if we do one thing it will lead to another. In its
crudest form, instrumentality theory states that people only work for money.
The theory emerged in the second half of the 19th century with its emphasis on the
need to rationalize work and on economic outcomes. It assumes that people will be
motivated to work if rewards and penalties are tied directly to their performance;
thus, the awards are contingent upon effective performance. Instrumentality theory
has its roots in the scientific management methods of Taylor (1911), who wrote: ‘It
is impossible, through any long period of time, to get workmen to work much
harder than the average men around them unless they are assured a large and
permanent increase in their pay.’
This theory provides a rationale for incentive pay, albeit a dubious one. It is based
on the principle of reinforcement. Motivation using this approach has been and still
101 | Page
CAMEROON
is widely adopted and can be successful in some circumstances. But it is based

exclusively on a system of external controls and fails to recognize a number of
other human needs. It also fails to appreciate the fact that the formal control system
can be seriously affected by the informal relationship existing between workers.
〉 Reinforcement theory
As experience is gained in acting to satisfy needs; people perceive those certain

actions help to achieve their goals while others are less successful. Some actions
bring rewards; others result in failure or even punishment. Reinforcement theory as
developed by Hull (1951) suggests that successes in achieving goals and rewards
act as positive incentives and reinforce the successful behavior, which is repeated
the next time a similar need emerges. The more powerful, obvious and frequent the
reinforcement, the more likely it is that the behavior will be repeated until,
eventually, it can become a more or less unconscious reaction to an event.
Conversely, failures or punishments provide negative reinforcement, suggesting
that it is necessary to seek alternative means of achieving goals. This process has
been called ‘the Law of effect’.
The associated concept of operant conditioning (Skinner, 1974) explains that new
behaviors or responses become established through particular stimuli, hence
conditioning – getting people to repeat behavior by positive reinforcement in the
form of feedback and knowledge of results. The concept suggests that people
behave in ways they expect will produce positive outcomes. It is linked to
expectancy theory, as described later in this chapter and also contributes to learning
theory.
102 | Page
CAMEROON
The degree to which experience shapes future behavior does, of course, depend,
first, on the extent to which individuals correctly perceive the connection between
the behavior and its outcome and, second, on the extent to which they are able to
recognize the resemblance between the previous situation and the one that now
confronts them. Perceptive ability varies between people as does the ability to
identify correlations between events. For these reasons, some people are better at
learning from experience than others, just as some people are more easily
motivated than others.
It has been suggested that behavioral theories based on the principle of

reinforcement or the law of effect are limited because they imply, in Allport’s
(1954) phrase, a ‘hedonism of the past’. They assume that the explanation of the
present choices of individuals is to be found in an examination of the consequences
of their past choices. Insufficient attention is paid in the theories to the influence of
expectations, and no indication is given of any means of distinguishing in advance
the class of outcomes that would strengthen responses and those that would weaken
them.
Figure 5: The process of motivation
establish
goal
take
need action
attain
goal
103 | Page
CAMEROON
〉 Content (needs) theory
The theory focuses on the content of motivation in the shape of needs. Its basis is
the belief that an unsatisfied need creates tension and a state of disequilibrium. To
restore the balance a goal is identified that will satisfy the need, and a behavior
pathway is selected that will lead to the achievement of the goal and the satisfaction
of the need. All behavior is therefore motivated by unsatisfied needs. This process
is modelled in the figure below:
There are three points that emerge from this model. First, people have a multiplicity
of needs depending on themselves and the situation they are in. Second, they can
select all sorts of goals and actions to satisfy those needs. Third, while we can
observe their behavior we cannot be certain of the needs and goals that motivated
it. It is unwise to assume that any one approach to motivation will appeal to all
affected by it. Motivation policies and practices must recognize that people are
different.
Needs theory has been developed by Maslow, Alderfer and McClelland, as

described below.
〉 Maslow’s hierarchy of needs
The most famous classification of needs is the one formulated by Maslow (1954).
He suggested that there are five major need categories that apply to people in
general, starting from the fundamental physiological needs and leading through a
hierarchy of safety, social and esteem needs to the need for self-fulfillment, the
highest need of all. When a lower need is satisfied the next highest becomes
104 | Page
CAMEROON
dominant and the individual’s attention is turned to satisfying this higher need. The
need for self-fulfillment, however, can never be satisfied. ‘Man is a wanting
animal’; only an unsatisfied need can motivate behavior and the dominant need is
the prime motivator of behavior. Psychological development takes place as people
move up the hierarchy of needs, but this is not necessarily a straightforward
progression. The lower needs still exist, even if temporarily dormant as motivators,
and individuals constantly return to previously satisfied needs.
Maslow’s needs hierarchy has an intuitive appeal and has been very popular. But it
has not been verified by empirical research such as that conducted by Wahba and
Bridwell (1979), and it has been criticized for its apparent rigidity (different people
may have different priorities and it is difficult to accept that needs progress steadily
up the hierarchy) and for the misleading simplicity of Maslow’s conceptual
language. In fact, Maslow himself expressed doubts about the validity of a strictly
ordered hierarchy.
〉 ERG theory (Alderfer)
Alderfer (1972) devised a theory of human needs that postulated three primary
categories:
1. Existence needs such as hunger and thirst – pay, fringe benefits and working
conditions are other types of existence needs.
2. Relatedness needs, which acknowledge that people are not self-contained
units but must engage in transactions with their human environment –
acceptance, understanding, confirmation and influence are elements of the
relatedness process.
105 | Page
CAMEROON
3. Growth needs, which involve people in finding the opportunities ‘to be what
they are most fully and to become what they can’.
〉 McClelland’s achievement–affiliation–power needs
An alternative way of classifying needs was developed by McClelland (1961), who

based it mainly on studies of managers. He identified three needs as being most
important:
1. The need for achievement, defined as the need for competitive success
measured against a personal standard of excellence.
2. The need for affiliation, defined as the need for warm, friendly,
compassionate relationships with others.
3. The need for power, defined as the need to control or influence others.
Different individuals have different levels of these needs. Some have a greater need
for achievement, others a stronger need for affiliation, and still others a stronger
need for power. While one need may be dominant, however, this does not mean
that the others are nonexistent.
The three needs may be given different priorities at different levels of management.
Achievement needs are particularly important for success in many junior and
middle management jobs where it is possible to feel direct responsibility for task
accomplishment. But in senior management positions a concern for
institutionalized as opposed to personal power becomes more important. A strong
need for affiliation is not so significant at any level.
〉 Process theory
106 | Page
CAMEROON
In process theory, the emphasis is on the psychological processes or forces that

affect motivation, as well as on basic needs. It is also known as ‘cognitive theory’
because it is concerned with people’s perceptions of their working environment and
the ways in which they interpret and understand it. According to Guest (1992),
process theory provides a much more relevant approach to motivation that replaces
the theories of Maslow and Herzberg which, he claims, have been shown by
extensive research to be wrong.
Process or cognitive theory can certainly be more useful to managers than needs
theory because it provides more realistic guidance on motivation techniques. The
main processes are expectations, goal achievement and feelings about equity.
〉 Expectancy theory
Expectancy theory states that motivation will be high when people know what they
have to do to get a reward, expect that they will be able to get the reward and
expect that the reward will be worthwhile.
The concept of expectancy was originally contained in the valency–

instrumentality–expectancy (VIE) theory formulated by Vroom (1964). Valency
stands for value, instrumentality is the belief that if we do one thing it will lead to
another, and expectancy is the probability that action or effort will lead to an
outcome.
The strength of expectations may be based on past experiences (reinforcement), but

individuals are frequently presented with new situations – a change in job, payment
system, or working conditions imposed by management – where past experience is
an inadequate guide to the implications of the change. In these circumstances,
motivation may be reduced.
107 | Page
CAMEROON
Motivation is only likely when a clearly perceived and usable relationship exists
between performance and outcome, and the outcome is seen as a means of
satisfying needs. This explains why extrinsic financial motivation – for example, an
incentive or bonus scheme – works only if the link (line of sight) between effort
and reward is clear and the value of the reward is worth the effort. It also explains
why intrinsic motivation arising from the work itself can be more powerful than
extrinsic motivation; intrinsic motivation outcomes are more under the control of
individuals, who can place greater reliance on their past experiences to indicate the
extent to which positive and advantageous results are likely to be obtained by their
behavior.
This theory was developed by Porter and Lawler (1968) into a model that follows
Vroom’s ideas by suggesting that there are two factors determining the effort
people put into their jobs: first the value of the rewards to individuals in so far as
they satisfy their needs for security, social esteem, autonomy, and self-
actualization, and second the probability that rewards depend on effort, as
perceived by individuals – in other words, their expectations about the relationships
between effort and reward. Thus, the greater the value of a set of awards and the
higher the probability that receiving each of these rewards depends upon effort, the
greater the effort that will be expended in a given situation.
But, as Porter and Lawler emphasize, mere effort is not enough. It has to be
effective effort if it is to produce the desired performance. The two variables
additional to effort that affect task achievement are
Ability – individual characteristics such as intelligence, knowledge, skills, and
Role Perceptions – what individuals want to do or think they are required to do.
108 | Page
CAMEROON
These are good from the viewpoint of the organization if they correspond with what
it thinks the individual ought to be doing. They are poor if the views of the
individual and the organization do not coincide. A model of their theory is shown
in the figure below;
109 | Page
CAMEROON
Value of rewards Abilities
Effort Performance
Probability that Role

reward depends expectations
upon effort
Figure 6: Motivation model (Porter and Lawler)
〉 Goal theory
Goal theory as developed by Latham and Locke (1979) states that motivation and
performance are higher when individuals are set specific goals, when goals are
difficult but accepted, and when there is feedback on performance. Participation in
goal setting is important as a means of getting agreement to the setting of higher
goals. Difficult goals must be agreed and their achievement reinforced by guidance
and advice. Finally, feedback is vital in maintaining motivation, particularly
towards the achievement of even higher goals.
Goal theory is in line with the 1960s concept of management by objectives (a

process of managing, motivating and appraising people by setting objectives or
goals and measuring performance against those objectives). But management by
objectives or MBO fell into disrepute because it was tackled bureaucratically
without gaining the real support of those involved and, importantly, without
ensuring that managers were aware of the significance of the processes of
110 | Page
CAMEROON
agreement, reinforcement and feedback, and were skilled in practicing them. Goal
theory, however, plays a key part in performance management.
〉 Social Learning Theory
Social learning theory as developed by Bandura (1977) combines aspects of both

behavioral and expectancy theory. It recognizes the significance of the basic
behavioral concept of reinforcement as a determinant of future behavior but also
emphasizes the importance of internal psychological factors, especially
expectancies about the value of goals and the individual’s ability to reach them.
The term ‘reciprocal determinism’ is used to denote the concept that while the
situation will affect individual behavior, individuals will simultaneously influence
the situation.
Robertson and Cooper (1983) have pointed out that ‘there are many similarities
between social learning theory and expectancy theory in their joint emphasis on
expectancies, individual goals and values and the influence of both person and
situational factors’.
〉 Equity Theory
Equity theory (Adams, 1965) is concerned with the perceptions people have about
how they are being treated as compared with others. To be dealt with equitably is to
be treated fairly in comparison with another group of people (a reference group) or
a relevant other person. Equity involves feelings and perceptions and it is always a
comparative process. It is not synonymous with equality, which means treating
everyone the same, since this would be inequitable if they deserve to be treated
differently.
111 | Page
CAMEROON
Equity theory states, in effect, that people will be better motivated if they are
treated equitably and demotivated if they are treated inequitably. It explains only
one aspect of the processes of motivation and job satisfaction, although it may be
significant in terms of morale.
There are two forms of equity: distributive equity, which is concerned with the
fairness with which people feel they are rewarded in accordance with their
contribution and in comparison, with others; and procedural equity, which is
concerned with the perception’s employees have about the fairness with which
company procedures in such areas as performance appraisal, promotion and
discipline are being operated.
〉 Herzberg’s two-factor model
The two-factor model of satisfiers and dissatisfiers was developed by Herzberg et

al (1957) following an investigation into the sources of job satisfaction and
dissatisfaction of accountants and engineers. It was assumed that people have the
capacity to report accurately the conditions that made them satisfied and
dissatisfied with their jobs. Accordingly, the subjects were asked to tell their
interviewers about the times during which they felt exceptionally good and
exceptionally bad about their jobs and how long their feelings persisted. It was
found that the accounts of ‘good’ periods most frequently concerned the content of
the job, particularly achievement, recognition, advancement, responsibility, and the
work itself. On the other hand, accounts of ‘bad’ periods most frequently concerned
the context of the job. Company policy and administration, supervision, salary and
working conditions more frequently appeared in these accounts than in those told
112 | Page
CAMEROON
about ‘good’ periods. The main implications of this research, according to

Herzberg et al, were explained as follows.
The second group forms the hygiene factors in the medical use of the term,
meaning preventive and environmental. Herzberg pointed out that while financial
incentives may motivate in the short term, the effect quickly wears off. Herzberg’s
two-factor theory has been strongly attacked by, for example, Opsahl and Dunnette
(1966).
The research method has been criticized because no attempt was made to measure
the relationship between satisfaction and performance. It has been suggested that
the two-factor nature of the theory is an inevitable result of the questioning method
used by the interviewers. It has also been suggested that wide and unwarranted
inferences have been drawn from small and specialized samples and that there is no
evidence to suggest that the satisfiers do improve productivity.
In spite of these criticisms the Herzberg two-factor theory continues to thrive;

partly because it is easy to understand and seems to be based on ‘real life’ rather
than academic abstractions, and partly because it convincingly emphasizes the
positive value of the intrinsic motivating factors. It is also in accord with a
fundamental belief in the dignity of labor and the Protestant ethic – that work is
good in itself. As a result, Herzberg had immense influence on the job enrichment
movement, which sought to design jobs in a way that would maximize the
opportunities to obtain intrinsic satisfaction from work and thus improve the quality
of working life.
113 | Page
CAMEROON
McGregor’s Theory X and Y
SO
Implications of their research as explained by Herzberg et al (1957)
UR
The wants of employees divide into two groups. One group revolves around the
CE
need to develop in one’s occupation as a source of personal growth. The second
RE group operates as an essential base to the first and is associated with fair
VI treatment in compensation, supervision, working conditions and administrative
E practices. The fulfilment of the needs of the second group does not motivate the
individual to high levels of job satisfaction and to extra performance on the job. All
W we can expect from satisfying this second group of needs is the prevention of
dissatisfaction and poor job performance.
Douglas McGregor (1960) produced his analysis of the different views about
people and how they should be motivated. Theory X is the traditional view that the
average human dislikes work and wishes to avoid responsibility and that, therefore,
‘most people must be coerced, controlled, directed, threatened with punishment to
get them to put forward adequate effort towards organizational objectives. In
contrast, theory Y emphasizes that people will exercise self-direction in the service
of objectives to which they are committed and that commitment to objectives is a
function of the rewards associated with their achievement.
Motivation and Money

Money, in the form of pay or some other sort of remuneration, is the most obvious
extrinsic reward. Money seems to provide the carrot most people want.
114 | Page
CAMEROON
Doubts were cast on the effectiveness of money by Herzberg et al (1957) because,

they claimed, while the lack of it can cause dissatisfaction, its provision does not
result in lasting satisfaction. There is something in this, especially for people on
fixed salaries or rates of pay who do not benefit directly from an incentive scheme.
They may feel good when they get an increase; apart from the extra money, it is a
highly tangible form of recognition and an effective means of helping people to feel
that they are valued. But this feeling of euphoria can rapidly die away. Other
dissatisfactions from Herzberg’s list of hygiene factors, such as working conditions
or the quality of management, can loom larger in some people’s minds when they
fail to get the satisfaction, they need from the work itself. However, it must be re-
emphasized that different people have different needs and wants. Some will be
much more motivated by money than others. What cannot be assumed is that
money motivates everyone in the same way and to the same extent. Thus, it is naïve
to think that the introduction of a performance-related pay scheme will
miraculously transform everyone overnight into well-motivated, high-performing
individuals.
Nevertheless, money is a powerful force because it is linked directly or indirectly to

the satisfaction of many needs. Money may in itself have no intrinsic meaning, but
it acquires significant motivating power because it comes to symbolize so many
intangible goals. It acts as a symbol in different ways for different people, and for
the same person at different times.
But do financial incentives motivate people?
The answer is yes, for those people who are strongly motivated by money and
whose expectations that they will receive a financial reward are high. But less
confident employees may not respond to incentives that they do not expect to
115 | Page
CAMEROON
achieve. It can also be argued that extrinsic rewards may erode intrinsic interest –
people who work just for money could find their tasks less pleasurable and may
not, therefore, do them so well. What we do know is that a multiplicity of factors is
involved in performance improvements and many of those factors are
interdependent.
Money can therefore provide positive motivation in the right circumstances not
only because people need and want money but also because it serves as a highly
tangible means of recognition. But badly designed and managed pay systems can
demotivate. Another researcher in this area was Jaquez (1961), who emphasized the
need for such systems to be perceived as being fair and equitable. In other words,
the reward should be clearly related to effort or level of responsibility and people
should not receive less money than they deserve compared with their fellow
workers. Jaquez called this the ‘felt-fair’ principle.
Motivation strategies
Motivation strategies aim to create a working environment and to develop policies
and practices that will provide for higher levels of performance from employees.
The factors affecting them and the HR contribution are summarized in Table 3.
Table 3 Factors affecting motivation strategies and the HR contribution
Factors Affecting Motivation

The HR Contribution
Strategies
• The complexity of the process of • Avoid the trap of developing or

motivation means that simplistic supporting strategies that offer
116 | Page
CAMEROON
approaches based on instrumentality prescriptions for motivation based on a

theory are unlikely to be successful. simplistic view of the process or fail to
recognize individual differences
• People are more likely to be • Encourage the development of

motivated if they work in an performance management processes
environment in which they are which provide opportunities to agree
valued for what they are and what expectations and give positive
they do. This means paying attention feedback on accomplishments.
to the basic need for recognition
• Develop reward systems which

provide opportunities for both
financial and non-financial rewards to
recognize achievements. Bear in mind,
however, that financial rewards
systems are not necessarily appropriate
and the lessons of expectancy, goal
and equity theory need to be
considered in designing and operating
them.
• The need for work which provides • Advise on processes for the design of
people with the means to achieve jobs which take account of the factors
their goals, a reasonable degree of affecting the motivation to work,
autonomy, and scope for the use of providing for job enrichment in the
117 | Page
CAMEROON
skills and competences should be shape of variety, decision-making

recognized. responsibility and as much control as
possible in carrying out the work.
• The need for the opportunity to • Provide facilities and opportunities

grow by developing abilities and for learning through such means as
careers. personal development planning
processes as well as more formal
training.
• Develop career planning processes.
• The cultural environment of the Advise on the development of a

organization in the shape of its culture which supports processes of
values and norms will influence the valuing and rewarding employees.
impact of any attempts to motivate
people by direct or indirect means.
• Motivation will be enhanced by Devise competence frameworks which

leadership which sets the direction, focus on leadership qualities and the
encourages and stimulates behaviors expected of managers and
achievement and provides support to team leaders
employees in their efforts to reach
• Ensure that leadership potential is
goals and improve their performance
identified through performance
generally.
management and assessment centers
• Provide guidance and training to

develop leadership qualities
118 | Page
CAMEROON
Table 3: Factors affecting motivation strategies and the HR contribution
B) ORGANIZATIONAL COMMITMENT
This discussion includes the following aspects: theoretical background; definition
of the concept; adopted model for this study, dimensions of organizational
commitment; development of organizational commitment; factors affecting the
employees’ commitment; the effects of commitment; and the management of
organizational commitment.
Theoretical Background Of The Concept “Organizational Commitment”

The concept organizational commitment has grown in popularity in the literature on
industrial and organizational psychology (Cohen, 2003). Early studies on
organizational commitment viewed the concept as a single dimension, based on an
attitudinal perspective, embracing identification, involvement and loyalty (Porter,
Steers, Mowday & Boulian, 1974). According to Porter et al (1974) an attitudinal
perspective refers to the psychological attachment or affective commitment formed
by an employee in relation to his identification and involvement with the respective
organization.
Porter et al (1974, p 604) further describes organizational commitment as “an

attachment to the organization, characterized by an intention to remain in it; an
identification with the values and goals of the organization; and a willingness to
exert extra effort on its behalf”. Individuals consider the extent to which their own
values and goals relate to that of the organization as part of organizational
119 | Page
CAMEROON
commitment, therefore it is considered to be the linkage between the individual

employee and the organization.
Another perspective on organizational commitment is the “exchanged-based

definition” or "side-bet" theory (Becker, 1960; Alluto, Hrebiniak & Alonso, 1973).
This theory holds that individuals are committed to the organization as far as they
hold their positions, irrespective of the stressful conditions they experience.
However, should they be given alternative benefits, they will be willing to leave the
organization.
Mowday, Porter and Steers (1982) support the “side-bet” theory by describing
organizational commitment as a behavior "relating to the process by which
individuals become locked into a certain organization and how they deal with this
problem". This behavioral aspect of organizational commitment is explained
through calculative and normative commitments.
The calculative or normative perspective refers to an employee's commitment to

continue working for the organization based on the notion of weighing cost benefits
of leaving an organization (Hrebiniak & Alutto, 1972). Wiener and Vardi (1980)
describe organizational commitment as “behavioral intention or reaction,
determined by the individual's perception of the normative pressure”.
Meyer and Allen (1984) initially viewed organizational commitment as two

dimensional namely, affective and continuance. Meyer and Allen (1984) defined
the first dimension, namely affective commitment as “positive feelings of
identification with, attachment to and involvement in the work organization”, and
they defined the second dimension, namely continuance commitment as “the extent
120 | Page
CAMEROON
which employees feel committed to their organization by virtue of the costs that
they feel are associated with leaving”.
After further research, Allen and Meyer (1990) added a third dimension, namely
normative commitment. Allen and Meyer (1990) define normative commitment as
“the employee’s feelings of obligation to remain with the organization”.
Consequently, the concept organizational commitment is described as a tri-
dimensional concept, characterized by the affective, continuance and normative
dimensions (Meyer & Allen, 1991).
Common to the three dimensions of organizational commitment is the view that

organizational commitment is a psychological state that characterizes
organizational members' relationship with the organization and has implications for
the decision to continue or discontinue membership in the organization (Meyer &
Allen, 1997).
Definition Of Organizational Commitment

Definitions of the concept organizational commitment include the description by
O’Reilly (1989), “an individual's psychological bond to the organization, including
a sense of job involvement, loyalty and belief in the values of the organization”.
Organizational commitment from this point of view is characterized by employee's
acceptance of organizational goals and their willingness to exert effort on behalf of
the organization (Miller & Lee, 2001).
Cohen (2003) states that “commitment is a force that binds an individual to a

course of action of relevance to one or more targets”. This general description of
commitment relates to the definition of organizational commitment by Arnold
121 | Page
CAMEROON
(2005) namely that it is “the relative strength of an individual’s identification with

and involvement in an organization”.
Miller (2003) also states that organizational commitment is “a state in which an

employee identifies with a particular organization and its goals, and wishes to
maintain membership in the organization”. Organizational commitment is
therefore, the degree in which an employee is willing to maintain membership due
to interest and association with the organization’s goals and values.
In addition, Morrow (1993) describes organizational commitment as characterized

by attitude and behavior. Miller (2003) describes an attitude as “evaluative
statements or judgements - either favorable or unfavorable - concerning a
phenomenon”. Organizational commitment as an attitude reflects feelings such as
attachment, identification and loyalty to the organization as an object of
commitment (Morrow, 1993). Meyer, Allen and Gellantly (1990) also suggest that
organizational commitment as an attitude is “characterized by a favorable positive
cognitive and affective component about the organization”
The second characteristic that is used to describe the concept organizational

commitment is behavior (Morrow, 1993). Best (1994) maintains that “committed
individuals enact specific behaviors due to the belief that it is morally correct rather
than personally beneficial". Reichers (1985) is of the opinion that “organizational
commitment as behavior is visible when organizational members are committed to
existing groups within the organization”. Therefore, organizational commitment is
a state of being, in which organizational members are bound by their actions and
beliefs that sustain their activities and their own involvement in the organization
(Miller & Lee, 2001).
122 | Page
CAMEROON
The adopted definition for this study corresponds with definitions by Meyer and
Allen (1991) mentioned above. According to this definition organizational
commitment “is a psychological state that characterizes the employee’s relationship
with the organization, and has implications for the decision to continue
membership in the organization”.
Organizational Commitment Model

Meyer and Allen (1997) use the tri-dimensional model to conceptualize
organizational commitment in three dimensions namely, affective, continuance and
normative commitments. These dimensions describe the different ways of
organizational commitment development and the implications for employees’
behavior.
123 | Page
CAMEROON
Figure 7: 5 presentation of the tri-dimensional organizational commitment model
ANTECENDETS PROCESSES COMMITMENT CONSEQUENCES

DISTAL PROXIMAL
ORGANIZATIONAL
CHARACTERISTICS
8. Size
9. Structure
10. Climate. Etc.
RETENTION
PERSONAL
CHARACTERISTICS Withdrawal
11. Demographics WORK AFFECT- AFFECTIVE Cognition
12. Values EXPERIENCES RELATED COMMITMENT Turnover r
13. Expectations, 23. Job scope 33. Attribution 42. Organizati Intention
24. Relationships 34. Rationalisa on Turnover
25. Participation tion 43. Union
SOCIALISATION 26. Support 44. Team
35. Met
EXPERIENCES 27. Justice PRODUCTIVE
expectations
14. Cultural BEHAVIOUR
36. Person –
15. Familial CONTINUANCE
Job Fit
16. Organizational ROLE STATES COMMITMENT 1. Attendance
37. Need
28. Ambiguity 45. Organizati 2. Performance
satisfaction
29. Conflict on 3. Citizenship
NORM RELATED
MANAGEMENT 30. Overload 46. Union 4. EMPLOYEE
38. Expectatio
PRACTICES 47. Team WELL-
ns
17. Selection BEING
39. Obligations
18. Training PSYCHOLOGICA 5. Psychologi
COST RELATED
19. Compensation L CONTRACT NORMATIVE cal Health
31. Economic COMMITMENT 6. Ph
Exchange ysi
ENVIRONMENTAL
CONDITIONS
20. Unemployment
rate
Affective commitment dimension
The first dimension of organizational commitment in the model is affective

commitment, which represents the individual’s emotional attachment to the
organization. According to Meyer and Allen (1997) affective commitment is “the
employee’s emotional attachment to, identification with, and involvement in the
124 | Page
CAMEROON
organization”. Organizational members who are committed to an organization on

an affective basis, continue working for the organization because they want to
(Meyer & Allen, 1991). Members who are committed on an affective level stay
with the organization because they view their personal employment relationship as
congruent to the goals and values of the organization (Beck & Wilson, 2000).
Affective commitment is a work-related attitude with positive feelings towards the

organization (Morrow, 1993). Sheldon (1971) also maintains that this type of
attitude is “an orientation towards the organization, which links or attaches the
identity of the person to the organization”. Affective commitment is the relative
strength of an individual's identification with and involvement in a particular
organization (Mowday et al, 1982).
The strength of affective organizational commitment is influenced by the extent to

which the individual's needs and expectations about the organization are matched
by their actual experience (Storey, 1995). Tetrick (1995) also describes affective
commitment as “value rationality-based organizational commitment, which refers
to the degree of value congruence between an organizational member and an
organization”.
The organizational commitment model of Meyer and Allen (1997) indicates that
affective commitment is influenced by factors such as job challenge, role clarity,
goal clarity, and goal difficulty, receptiveness by management, peer cohesion,
equity, personal importance, feedback, participation, and dependability.
Affective commitment development involves identification and internalization

(Beck & Wilson, 2000). Individuals’ affective attachment to their organizations is
firstly based on identification with the desire to establish a rewarding relationship
125 | Page
CAMEROON
with an organization. Secondly, through internalization, this refers to congruent

goals and values held by individuals and the organization. In general, affective
organizational commitment is concerned with the extent to which an individual
identifies with the organization (Allen & Meyer, 1990).
Continuance commitment dimension
The second dimension of the tri-dimensional model of organizational commitment

is continuance commitment. Meyer and Allen (1997) define continuance
commitment as “awareness of the costs associated with leaving the organization”.
It is calculative in nature because of the individual’s perception or weighing of
costs and risks associated with leaving the current organization (Meyer & Allen,
1997). Meyer and Allen (1991) further state that “employees whose primary link to
the organization is based on continuance commitment remain because they need to
do so”. This indicates the difference between continuance and affective
commitment. The latter entails that individuals stay in the organization because
they want to.
Continuance commitment can be regarded as an instrumental attachment to the

organization, where the individual's association with the organization is based on
an assessment of economic benefits gained (Beck & Wilson, 2000). Organizational
members develop commitment to an organization because of the positive extrinsic
rewards obtained through the effort-bargain without identifying with the
organization's goals and values.
The strength of continuance commitment, which implies the need to stay, is

determined by the perceived costs of leaving the organization (Meyer & Allen,
126 | Page
CAMEROON
1984). Best (1994) indicates that “continuance organizational commitment will

therefore be the strongest when availability of alternatives is few and the number of
investments is high”. This argument supports the view that when given better
alternatives, employees may leave the organization.
Meyer et al (1990) also maintain that "accrued investments and poor employment
alternatives tend to force individuals to maintain their line of action and are
responsible for these individuals being committed because they need to". This
implies that individuals stay in the organization, because they are lured by other
accumulated investments which they could lose, such as pension plans, seniority or
organization specific skills.
The need to stay is “profit” associated with continued participation and termination
of service is a “cost” associated with leaving. Tetrick (1995) support the profit
notion by describing the concept continuance organizational commitment as “an
exchange framework, whereby performance and loyalty are offered in return for
material benefits and rewards”. Therefore, in order to retain employees who are
continuance committed, the organization needs to give more attention and
recognition to those elements that boost the employee’s morale to be affectively
committed.
Normative commitment dimension
The last dimension of the organizational commitment model is normative

commitment. Meyer and Allen (1997) define normative commitment as “a feeling
of obligation to continue employment”. Internalized normative beliefs of duty and
obligation make individuals obliged to sustain membership in the organization
127 | Page
CAMEROON
(Allen & Meyer, 1990). According to Meyer and Allen (1991) “employees with
normative commitment feel that they ought to remain with the organization”. In
terms of the normative dimension, the employees stay because they should do so or
it is the proper thing to do.
Wiener and Vardi (1980) describe normative commitment as “the work behavior of
individuals, guided by a sense of duty, obligation and loyalty towards the
organization”. Organizational members are committed to an organization based on
moral reasons (Iverson & Buttigieg, 1999). The normative committed employee
considers it morally right to stay in the organization, regardless of how much status
enhancement or satisfaction the organization gives him or her over the years.
The strength of normative organizational commitment is influenced by accepted

rules about reciprocal obligation between the organization and its members
(Suliman & Iles, 2000). The reciprocal obligation is based on the social exchange
theory, which suggests that a person receiving a benefit is under a strong normative
obligation or rule to repay the benefit in some way (McDonald & Makin, 2000).
This implies that individuals often feel an obligation to repay the organization for
investing in them, for example through training and development.
Meyer and Allen (1991) argue that “this moral obligation arises either through the
process of socialization within the society or the organization”. In either case it is
based on a norm of reciprocity, in other words if the employee receives a benefit, it
places him or her, or the organization under the moral obligation to respond in
kindness.
128 | Page
CAMEROON
Developing Organizational Commitment
Organizational commitment is a spontaneous process, which develops through the

orientation of individuals to the organization. The development process can be
described based on stages and levels of organizational commitment.
Stages of organizational commitment
Organizational commitment develops through stages, which are outlined by

O'Reilly (1989) as compliance, identification and internalization. These stages are
described below:
〉 Compliance stage
The first stage, namely compliance centralizes around the employee accepting the
influence of others mainly to benefit from them, through remuneration or
promotion (O’Reilly, 1989). At this stage, attitudes and behaviors are adopted not
because of shared beliefs but simply to gain specific rewards. The nature of
organizational commitment in the compliance stage is associated with the
continuance dimension commitment, where the employee is calculative with the
need to stay in the organization when evaluating the rewards (Beck & Wilson,
2000). This implies that at this stage employees stay in the organization because of
what they receive (Meyer & Allen, 1997).
〉 Identification stage
The second stage, namely identification occurs when employees accept the
influence of others in order to maintain a satisfying self-defining relationship with
the organization (O’Reilly, 1989). Employees feel proud to be part of the
129 | Page
CAMEROON
organization; they may regard the roles they have in the organization as part their
self-identity (Best, 1994). Organizational commitment at this stage is based on the
normative dimension (Meyer & Allen, 1997). The individual stays because he or
she should and is guided by a sense of duty and loyalty towards the organization.
〉 Internalization stage
The last stage, namely internalization takes place when the employee finds the
values of the organization to be intrinsically rewarding and congruent with his or
her personal values (O’Reilly, 1989). Organizational commitment at this level is
based on the affective dimension (Meyer & Allen, 1997). The employee at this
stage develops not only the sense of belonging but passion to belong to the
organization hence the commitment is based on a “want to stay” basis. The values
of the individual are therefore congruent with those of the group and the
organization (Suliman & Iles, 2000).
Levels of organizational commitment
There are different levels of organizational commitment which are related to the
individual’s development of the individual’s organizational commitment (Reichers,
1985).
Figure 6 depicts the levels of commitment when it is increasing and when it is

decreasing.
Employee’s level of commitment may move from a low level to a moderate level
and continue to develop to a higher level of commitment (Reichers, 1985).
130 | Page
CAMEROON
The following is a description of the levels of organizational commitment:
Figure 8: Levels of organizational commitment
An increasing level of A decreasing level of

commitment commitment
Higher level of organizational Higher level of

commitment organizational commitment
Moderate level of
Moderate level of organizational organizational commitment
commitment
Lower level of organizational Lower level of

commitment organizational commitment
〉 Higher level of organizational commitment
A high level of organizational commitment is characterized by a strong acceptance

of the organization’s values and willingness to exert efforts to remain with the
organization (Reichers, 1985). Miller (2003) states that “high organizational
commitment means identifying with one’s employing organization”. The “will to
stay” suggests that the behavioral tendencies at this level relate closely with
affective dimension of commitment, where individuals stay because they want to.
131 | Page
CAMEROON
〉 Moderate level of organizational commitment
The moderate level of organizational commitment is characterized by a reasonable

acceptance of organizational goals and values as well as the willingness to exert
effort to remain in the organization (Reichers, 1985). This level can be viewed as a
reasonable or average commitment, which implies partial commitment. The
willingness to stay is an attribution of a moral commitment associated with the
normative dimension of commitment (Meyer & Allen, 1997). The individuals stay
in the organization because they should do so.
〉 Lower level of organizational commitment
The low level of organizational commitment is characterized by a lack of neither

acceptance of organizational goals and values nor the willingness to exert effort to
remain with the organization (Reichers, 1985). The employee who operates on this
level must be disillusioned about the organization; such an employee may stay
because he or she needs to stay as associated with the continuance dimension
(Meyer & Allen, 1997). Given an option they will leave the organization.
Factors Affecting Organizational Commitment
There are a variety of factors that shape organizational commitment. Such factors
include the following: job-related factors; employment opportunities; personal
characteristics; positive relationships; organizational structure; and management
style.
132 | Page
CAMEROON
〉 Job-related factors
Organizational commitment is an important job-related outcome at the individual

level, which may have an impact on other job-related outcomes such as turnover,
absenteeism, job effort, job role and performance or vice versa (Randall, 1990).
The job role that is ambiguous may lead to lack of commitment to the organization
and promotional opportunities can also enhance or diminish organizational
commitment (Curry, Wakefield, Price & Mueller, 1996).
Other job factors that could have an impact on commitment are the level of
responsibility and autonomy. Baron and Greenberg (1990) state that “the higher the
level of responsibility and autonomy connected with a given job, the lesser
repetitive and more interesting it is, and the higher the level of commitment
expressed by the person who fill it".
〉 Employment opportunities
The existence of employment opportunities can affect organizational commitment

(Curry et. al., 1996). Individuals who have a strong perception that they stand a
chance of finding another job may become less committed to the organization as
they ponder on such desirable alternatives. Where there is lack of other
employment opportunities, there is a tendency of high level of organizational
commitment (Vandenberg he, 1996). As a result, membership in the organization is
based on continuance commitment, where employees are continuously calculating
the risks of remaining and leaving (Meyer & Allen, 1997).
〉 Personal characteristics
133 | Page
CAMEROON
Organizational commitment can also be affected by the employee's personal

characteristics such as age, years of service and gender (Meyer & Allen, 1997).
Baron and Greenberg (1990) state that "older employees, those with tenure or
seniority, and those who are satisfied with their own levels of work performance
tend to report higher levels of organizational commitment than others". This
implies that older people are seen to be more committed to the organization than
other age groups.
Another personal characteristic that may affect organizational commitment is

associated with gender (Meyer & Allen, 1997). However, it is argued that gender
differences in commitment are due to different work characteristics and
experiences that are linked to gender (Mathieu & Zajac, 1990).
〉 Work environment
The working environment is also identified as another factor that affects

organizational commitment. One of the common working environmental conditions
that may affect organizational commitment positively is partial ownership of a
company. Ownership of any kind gives employees a sense of importance and they
feel part of the decision-making process (Klein, 1987). This concept of ownership
which includes participation in decision-making on new developments and changes
in the working practices, creates a sense of belonging (Armstrong, 1995). A study
conducted by Subramaniam and Mia (2001) also indicates that managers who
participate in budget decision making tend to have a high level of organizational
commitment.
Another factor within the work environment that may affect organizational
commitment is work practices in relation to recruitment and selection, performance
134 | Page
CAMEROON
appraisal, promotions and management style (Meyer & Allen, 1997). Metcalfe and
Dick (2001in their study conclude that “the low level of organizational
commitment of constables could be attributed to inappropriate selection and
promotion which lead to the perpetuation of managerial style and behavior that has
a negative effect on organizational commitment of subordinates”.
〉 Positive relationships
The organization as a workplace environment is built up of working relationships;

one of which is the supervisory relationship. According to Randall (1990) “the
supervisory relationship can affect organizational commitment either positively or
negatively”. A positive supervisory relationship depends on how work-related
practices such as performance management are being implemented in the
organization (Randall, 1990). When individuals find the supervisory relationship to
be fair in its practices, they tend to be more committed to the organization
(Benkhoff, 1997).
Other work relationships, such as teams or groups, which exist in the workplace,
can affect organizational commitment. Organizational members can demonstrate
commitment when they are able to find value through work relationships (Mathieu
& Zajac, 1990). Brooke, Russell and Price (1988) state that “employee
commitment and attachment to the organization can be increased through efforts
made to improve the organizations social atmosphere and sense of purpose”. In
essence, when work relationships reflect mutual respect to individuals, they are
able to commit themselves to the organization.
〉 Organizational structure
135 | Page
CAMEROON
Organizational structure plays an important role in organizational commitment.

Bureaucratic structures tend to have a negative effect on organizational
commitment. Zeffanne (1994) indicates that "the removal of bureaucratic barriers
and the creation of more flexible structure are more likely to contribute to the
enhancement of employee commitment both in terms of their loyalty and
attachment to the organization". The management can increase the level of
commitment by providing the employees with greater direction and influence
(Storey, 1995).
〉 Management style
It is stated by Zeffanne (1994) that "the answer to the question of employee

commitment, morale, loyalty and attachment may consist not only in providing
motivators, but also to remove demotivators such as styles of management not
suited to their context and to contemporary employee aspirations". A management
style that encourages employee involvement can help to satisfy employee's desire
for empowerment and demand for a commitment to organizational goals.
Gaertner (1999) argues that “more flexible and participatory management styles
can strongly and positively enhance organizational commitment”. Organizations
need to ensure that their management strategies are aimed at improving employee
commitment rather than compliance (William & Anderson, 1991).
Effects Of Organizational Commitment
Organizational commitment can have either a negative or a positive effect on the

organization.
136 | Page
CAMEROON
〉 Negative effect of low-level organizational commitment
The negative effect implies that the level of organizational commitment is low.
Employees with a low level of organizational commitment tend to be unproductive
and some become loafers at work
(Morrow, 1993). Lowman (1993) states that organizational commitment can be

regarded as a “work dysfunction when it is characterized by under-commitment and
over-commitment”. The following are the characteristics of over-commitment and
under-commitment according to Lowman (1993):
TABLE 4: Characteristics Of Over-Commitment And Under commitment

(Lowman, 1993).
Under-commitment Over- commitment
Fear of success. Fear of failure.
Chronic and persistent procrastination Negative cultural, familial and

personality factors
Chronic and persistent Overly loyal employees

underachievement
Job and occupational burnout Obsessive-compulsive patterns at

work
Neurotic compulsion to succeed Extreme high level of energy
Table 4: Characteristics of Over-Commitment and Under commitment
137 | Page
CAMEROON
In certain cases, the high rate of staff turnover and absenteeism are associated with
the low level of organizational commitment (Morrow, 1993). Cohen (2003)
motivates that “lack of organizational commitment or loyalty is cited as an
explanation of employee absenteeism, turnover, reduced effort expenditure, theft,
job dissatisfaction and unwillingness to relocate”.
Organizational commitment is regarded to be the best predictor of employees’

turnover, then the far more frequently used job satisfaction predictor (Miller, 2003).
Given the fact that employees who operate in a continuance commitment
dimension are calculative of their stay, one would deduce that such employees may
continuously stay away from work when they feel like, doing so.
Positive Effects of Organizational Commitment

Committed organizational members contribute positively to the organization which
is not the case with less committed members. Cohen (2003) states that
“organizations whose members have higher levels of commitment show higher
performance and productivity and lower levels of absenteeism and tardiness”. This
implies that employees with a high level of commitment tend to take greater efforts
to perform and invest their resources in the organization (Saal & Knight, 1987).
Organizational commitment can result in a stable and productive workforce

(Morrow, 1993). It enables employees to release their creativity and to contribute
towards organizational development initiatives (Walton, 1985). Employees who are
highly committed do not leave the organization because they are dissatisfied and
tend to take challenging work activities (Meyer & Allen, 1997). Committed
members are normally achievement and innovative orientated with the ultimate aim
of engaging in and improving performance (Morrow, 1993).
138 | Page
CAMEROON
Other positive effects of organizational commitment include feelings of affiliation,

attachment and citizenship behavior, which tend to improve organizational
efficiency and effectiveness (Williams & Anderson, 1991). Affectively and
normatively committed members are more likely to maintain organizational
membership and contribute to the success of the organization than continuance-
committed members (Meyer & Allen, 1997).
Managing Organizational Commitment

Organizations are continuously faced with the demand and supply challenges of the
changing market. In order for the organization to adapt to the intense competition
in the market place and the rapid changes in technology, it requires organizational
members have to be internally committed (Miller, 2003). The organization is then
faced with a challenge of managing its employees’ commitment throughout, to
ensure sustainability.
O' Reilly (1989) states that “to understand what commitment is and how it is
developed, is by understanding the underlying psychology of commitment so that
we can think about how to design systems to develop such an attachment among
employees”. It is therefore crucial for the organization to first understand
commitment in order to manage it.
According to Arnold (2005) “organizational commitment can be fostered by giving

individuals positive experiences”. A study by Finnegan (2000) suggests that
affective commitment correlates with an organization perceived to value humanity,
while the value of convention is correlated with continuance commitment.
139 | Page
CAMEROON
Goss (1994) is of the opinion that the structural and job design techniques can be
used to foster organizational commitment in the following ways:
〉 Firstly, structural technique involves a flat organizational structure that limits

hierarchical order of reporting and encourages one on one contact. It also
encourages the coordination of shared goals and communication in the
organization that is both horizontal and vertical, thereby reaching all levels.
〉 Secondly, job design related techniques focus mainly on allowing employees
to be involved in the decision-making processes and it emphasizes the
importance of work teams.
Another important mechanism to manage organizational commitment is through

substantial human resource policies and practices that are fair. Meyer and Allen
(1997) argue that “one way that organizational fairness is communicated is through
the development and enactment of specific policies and procedures that are and are
seen to be fair”. Figure 3.3 presents the link between human resources policies and
organizational commitment dimensions (Meyer & Allen, 1997).
This link implies that the employees’ perceptions of human resources policies and
practices lead to the development of a particular dimension of organizational
commitment. Human resources policies and practices that are perceived to enhance
employees’ self-worth tend to lead to affective commitment to the organization
(Meyer & Allen, 1997).
On the other hand, continuance commitment is due to perceived cost of loss in

human resources practices; while normative commitment is due to the perceived
need to reciprocate (Meyer & Allen, 1997).
140 | Page
CAMEROON
Perceived self Affective

worth commitment
Perceived cost of Continuance

HRM Policies and
loss commitment
Perceived need Normative

to reciprocate commitment
Figure 9: The link between organizational commitment dimensions and human resources policies and
practices (Meyer & Allen, 1997)
Meyer and Allen (1997) suggest that when implementing human resources policies
and practices as a strategy to manage organizational commitment, it is important to
consider the following:
〉 Firstly, that interests of the organization and organizational members do not

necessarily coincide.
〉 Secondly, management must not define and communicate values in such a
way that inhibit flexibility, creativity and the ability to adapt to change.
141 | Page
CAMEROON
〉 Thirdly, not too much should be expected from campaigns to increase

organizational commitment.
Leaders in the organization have an important role to play in developing the needed
organizational commitment. Tjosvold, Sasaki and Moy (1998) maintain that “the
three possible ways to enhance organizational commitment are to focus on: the
employees’ need for fulfilment; their self-esteem; and social support”. This strategy
is not an attempt by leadership to manipulate employees to accept management
values and goals. In essence, when organizations trust and treat employees like
adults, they develop a sense of belonging, as a result employee respond with total
commitment to the organization (Finnegan, 2000).
The traditional way to build organizational commitment or loyalty by offering job

security and regular promotions is becoming impractical for many organizations
(Arnold, 2005). Another way of managing organizational commitment is through
resuscitating the survivors of change due to restructuring (Meyer & Allen, 1997).
Organizational change through restructuring often involves significant downsizing
and this has a negative impact on the survivor's moral and organizational
commitment.
C) JOB SATISFACTION
The definition of job satisfaction is the enjoyable and emotional state resulting
from the evaluation of one’s job (Danish & Usman, 2010) or job experiences; the
employee feels fulfillment and pride in achieving the business’s goals. Job
satisfaction occurs when someone feels he/she has proficiency, value, and is worthy
142 | Page
CAMEROON
of recognition (Garcez, 2006). Therefore, job satisfaction is a worker’s sense of

achievement and is generally noted to be directly (Cranny, Smith & Stone, 1992)
associated to improved efficiency as well as to personal welfare. Job satisfaction is
the belief of the employee that he/she is doing a good job, enjoying the process, and
being suitably rewarded for the effort. Job satisfaction is a measure of how happy
workers are with their jobs and work environment. Keeping morale high among
workers is of fabulous benefit to any company, as content workers will be more
likely to produce more results, take fewer days off, and remain loyal to the
company. There are many factors in improving or maintaining high employee
satisfaction, which wise employers would do well to implement (Brown, 1996).
The Magnitude Of Job Satisfaction

Job satisfaction is an essential factor that affects employees’ initiative and
enthusiasm. A lack of job satisfaction can lead to increased absenteeism and
unnecessary turnover in the workplace. Job satisfaction is a major factor in personal
satisfaction (Locke, 1976), self-respect, self-esteem, and self-development. Job
satisfaction increases the degree of happiness in the workplace, which leads to a
positive work approach.
A satisfied worker is creative, flexible, innovative, and loyal (“Enotes”, 2010). Job
satisfaction in general means the work force is motivated and committed to high
quality performance. Improving the quality of working life will help employees to
increase productivity (the quantity and quality of output per hour worked).
Unhappy employees are not motivated to work hard and give 100% of their efforts
over a long period of time. Job satisfaction is also linked to a healthier workforce
and has been found to be a good indicator of longevity for a company (Argyle,
143 | Page
CAMEROON
1989). It is important for the worker to feel satisfied doing his/her job and feel great
value for his/her efforts. Job satisfaction brings a delightful emotion (Brown,
1996), which leads to an optimistic work manner.
A satisfied worker is more likely to be creative and show more durability (Engleza,
2007). Companies and organizations that considered most the job satisfaction of the
workforce with regards to the efficiency of work and the number of hours also had
higher quality performances among its employees. Research shows that more
satisfied workers tend to add more value to an organization. Unhappy employees
who are motivated by fear of job loss do not give 100% of their effort for very long
(Akerlof, Rose & Yellen, 1988).
The Dimensions Of Job Satisfaction

The perceptions of job satisfaction vary among scientists and scholars. The reason
is related to the numerous concepts, values, beliefs, and cores of interest among
scholars to identify the circumstances (Ting, 1997) of the surrounding environment
that are considered elements in measuring and defining job satisfaction. The
concept explored here began as simple definition that satisfaction is anything that
leads to fulfillment (Locke, 1976), joy, and happiness. Job satisfaction, employee
morale, and a good attitude toward a job show the importance of individual feeling.
Other scholars define job satisfaction as the sum of individual feelings toward the
job and the emotional fulfillment that individuals reach in their work. Yet for many
researchers the meaning of job satisfaction has shifted from a concentration on the
feelings that individuals have towards their job to complex concepts used to
determine the component of job satisfaction and its multiple sides (Al-Haydar&
Bin Taleb, 2005).
144 | Page
CAMEROON
Many scholars, like Maslow (1943), agree that the feeling of satisfaction in a job
positively influences the achievements of employees, while dissatisfaction can
negatively reflect on their performance. The feeling of satisfaction or
dissatisfaction develops into a condition of internal psychological emotion, which
appears as behaviors observed through the individual’s performance (Motowidlo,
1996). Job satisfaction has multiple dimensions and sides, influenced by different
factors; some are related to the work itself, while others are connected to the peer
work group and surrounding work environment. It is erroneous to believe that
increased satisfaction in one aspect of a job results in satisfaction with other
dimensions of the job. For example, we may fine some employees are satisfied with
their relations with their colleagues, but dissatisfied with the salary or work
conditions. This leads us to understand that job satisfaction is not absolute, but is a
problem related to multiple factors (Borjas, 1979).
Dunnette & Jorgenson (1972) assert that job satisfaction is the sum of relations and
interactions between workers’ desires, expectations, and the value of what their
jobs offer. Therefore, job satisfaction is the sum of social, physiological, and
environmental circumstances that make an individual pleased about their work
(Clark & Oswald, 1996). The concept of job satisfaction has multiple dimensions
that represent the overall satisfaction the individual gets from the work itself, as
well as from work groups, superiors (Clark & Oswald, 1994), and the work
environment. In achieving job satisfaction, the individual may become highly
satisfied with one (Freeman, 1978) dimension while remaining dissatisfied with
others. For example, it possible for the employee to be satisfied with the
organizational policies while indicating a low level of satisfaction towards
colleagues. In this situation, (Al-Haydar& Bin Taleb, 2005), the organization must
145 | Page
CAMEROON
seek to develop the satisfaction of its employees by determining the dimensions its
employees complain about to improve positive feelings. Determining the factors
that create job satisfaction in the work environment rely (Al-Haydar& Bin Taleb,
2005) upon seven dimensions: the work itself, supervision, the organization and its
management, promotion opportunities, pay and other financial benefits, coworkers,
and working conditions (Green, 2002).
How to Create Job Satisfaction What are the fundamentals of a job that create job
satisfaction? Organizations produce job satisfaction by putting systems
(Hamermesh, 2001) in place to make sure that workers are challenged and then
happy over their successful outcomes. Organizations need to focus on plans to
accomplish job satisfaction through multiple steps, some of which can include: −
Increased creativity − Increased accountability − Secure work atmosphere −
Accessibility to a manager who provides timely feedback and support − Updated
technology − Competitive salaries and opportunities for promotion (The Harvard
Professional Group, 1998).
How To Create Job Satisfaction

Organizations produce job satisfaction by putting systems (Hamermesh, 2001) in
place to make sure that workers are challenged and then happy over their successful
outcomes. Organizations need to focus on plans to accomplish job satisfaction
through multiple steps, some of which can include:
〉 Increased creativity
〉 Increased accountability
〉 Secure work atmosphere
146 | Page
CAMEROON
〉 Accessibility to a manager who provides timely feedback and support

〉 Updated technology
〉 Competitive salaries and opportunities for promotion (The Harvard
Professional Group, 1998).
So, the most important objective for increased job satisfaction is providing factors
that make employees happy with their work, but it varies among workers (Levy-
Garboua & Montmarquette, 2002). Job satisfaction is also influenced by the
employee’s characteristics, the manager’s personal characteristics, the management
style of the business, and the nature of the work itself. Managers who want to
maintain a high level of job satisfaction among their workforce must try to
understand the needs of each employee. For example, managers can enhance
worker satisfaction by placing people with similar backgrounds and experiences in
the same workgroups (Orisatoki1& Oguntibeju, 2010). Also, managers can
enhance job satisfaction by carefully matching workers with their preferred type of
work. Someone who does not pay attention to details would have difficulty with
finely detailed work (Arches, 1991), and a shy worker would face difficulties in
being a good salesperson.
Consequently, managers should match job tasks to employees’ personalities and

skills (“Enotes”, 1998). Managers can create a good work environment using steps.
Job enrichment is one of these steps. Job enrichment is an upgrade in responsibility.
It usually includes increased recognition and greater chances for advanced (Rentner
& Bissland ,1990) developments, learning, and achievements. There are many
companies that use job-enrichment programs to enhance worker motivation and job
satisfaction (“Enotes”, 1998), Good administration is also important for creating
147 | Page
CAMEROON
more self-confidence, higher efficiency, and greater work values as a sense of

purpose and meaning for the entire organization and its employees.
Studies show that job distinctions, such as reimbursements, promotional

opportunities, and skills training, as well as organizational uniqueness (Rentner &
Bissland ,1990), increased duties, and improved relationships with supervisors and
coworkers, all have a great effect on job satisfaction. These job characteristics can
be carefully managed to produce better job satisfaction (Poulin, 1994). A worker
who becomes committed to his job will increase good elements in the work
environment. Many of those employees ask themselves questions such as: Am I
close to expressing my full potential in my work situation? (Everett, 1995) What
features of the workplace are helpful? What aspects of the work are enjoyable?
What kind of experiences I have received?
How To Increase Employee Satisfaction

Here are six agreed-upon instructions for support employee satisfaction in business:
1. Guarantee that each employee knows the company’s aims, missions, and
goals
Happy employees care about the company’s accomplishments and achievements

(Robert, 1993). Priorities and responsibilities are divided among employees
according to each person’s work rank and job classification (“More business”,
2010).
2. Provide obvious opportunities
148 | Page
CAMEROON
Every employee must know his job duties, and identifying each worker’s duties
clearly is one of the best ways to improve employee satisfaction. This should
include a distinct job description with goals and expectations. Set an agenda to
carry out semi-annual or at least annual job performance evaluations (“More
business”, 2010). Analyzing performance over a period of time and comparing it to
the original expectations is an essential step. If all employees unmistakably know
what is expected of them, they have a much easier time accomplishing their goals
(Weiss, 2002).
1. Empower employees
Many employees hate to be micro-managed. Often people get more job satisfaction
when they are familiar with their workgroups and managers, and trust them to
provide empowerment. Sometimes this means allowing customer service people to
make their own decisions on improving customer relations. Empowerment gives
workers ownership of their jobs, and it makes them more creative within the
company (Cote & Morgan, 2002).
2. Reward Employees
When was the last time you commended an employee for a job well done? Workers
like to know that their efforts are appreciated. Rewarding workers can be as simple
as a verbal “job well done.” Other rewards for improving working conditions can
be in the form of a cash bonus (“More business”, 2010) or gift card for taking
initiative, or a promotion, even if it is just in title (Wegge, Schmidt, Parkes & Van
Dick, 2007).
3. Team-Building Activities
149 | Page
CAMEROON
Improving employee satisfaction includes building and improving your work team.
Team-building activities might include inviting your workers (“More business”,
2010) together to a day retreat where goals are discussed and ideas are introduced.
Management might consider hiring a team-building consultant to perform activities
with employees. One example of a simple team-building exercise is setting a team
goal and, if it is met, rewarding the employees (Saari & Judge, 2004) with a team
lunch or even a movie.
4. Reasonable Compensation
Salary is last on the list because it is not the top priority for employee satisfaction
according to human resources polls. Employees would much rather be recognized
for their efforts (“More business”, 2010) and be rewarded per job well done than
just receive an excellent salary. That doesn’t mean you should skimp, however. Be
sure you offer salaries that are comparable to other positions in your industry.
Include the other benefits you should offer (Mount & Johnson, 2006), such as
insurance, retirement contributions, and attractive time-off packages.
5. Organizational Commitment
Organizational commitment can refer to identification, involvement and loyalty

(Buchanan 1974). According to this, identification refers to the adoption of
organizational goals and values by a person who is working for an organization.
Involvement refers to a person’s participation in the companies’ activities and to
act as a decision maker or to be directly involved in the company’s strategy
formulation process and their objectives. Loyalty refers to the concern and
commitment toward his or her organization (Buchanan 1974).
150 | Page
CAMEROON
Several studies use organizational commitment as an intervening variable to predict

the relationship between budgetary participation and performance. Managers’ or
employees’ loyalty is one of the most significant factors that directors must have in
mind. Commitment is usually measured with the loyalty questionnaires and can
cause serious negative consequences when not in a high level because less
commitment means less performance and the non-achievement of organizational
goals. (Aziri 2011).
Meyer and Allen (2004) stated that committed employees will work harder to
achieve the organization’s goals and reduce costly labor turnover. Carol & James
(1996) studied organizational commitment in many public sector areas, and the
results show organizational commitment of public employees working in some
public sector areas are not that different from that of employees in other sectors.
6. Stress
Stress can affect anyone at work and the effect on employees’ physical and mental
health can be quite costly (Ganster & Loghan 2005). Stress is a natural reaction to
too much pressure and can make employees feel nervous, depressed, and angry or
out of control it depends on the employees’ mental, physical or behavioral
situation. Stress has been also viewed as dysfunctional for organizations and their
employees (Kahn et al. 1964). Organizations in public and private sector are
responsible for setting the atmosphere for their employees. However, more stability
at work increases employee’s productivity and reduces job related tension and
stress. Nevertheless, the financial crisis increased unemployment rates throughout
different sectors, which created increased job-related tension and stress for
managers and employees, as they always had to live with the fear that they could be
the next whose placement will be terminated.
151 | Page
CAMEROON
Behr et al. (2000) state in their findings that there is a negative relationship between
occupational stress and employees’ performance that can have a huge impact on the
individual psychology.
2.1.5 ESSENTIALS OF A BUDGET
The essentials of a budget are outlined below;
〉 Organizational structure must be clearly defined, and responsibility should

be assigned to identifiable units within the organization.
〉 Setting of clear objectives and reasonable targets. Objectives should be in
consonance with the long-term plan of the organization.
〉 Objectives and degree of responsibility should be clearly stated and
communicated to the management or person responsible for.
〉 Budgets are prepared for future periods based on expected course of actions.
〉 Budgets are updated for the events that were not kept into the mind while
establishing budgets. Hence, budgets should be flexible enough for mid-term
revision.
〉 The entire organization must be committed to budgeting.
〉 Budgets should be quantifiable and master budget should be broken down
into various functional budgets.
〉 Budgets should be monitored periodically. Variances from the set yardsticks
(standard) should be analyzed and responsibility should be fixed.
〉 Budgetary performance needs to be linked effectively to the reward system.
152 | Page
CAMEROON
2.1.6 CHARACTERISTICS OF BUDGETS
The main characteristics of budgets are as follows;
〉 A budget is concerned for a definite period

〉 A budget is a handwritten document
〉 A budget is a detailed plan of all the economic activities of a business
〉 All the departments of a business co0operate in the preparation of a business
budget.
〉 A budget is a means to achieve business objectives and it is not an end itself.
〉 Budget needs to update, corrected and corrected and controlled every time
when circumstances change. Therefore, it is a continuous process.
〉 Budgets help planning, coordination and control.
〉 Different types of budgets are prepared by industries according to business
requirement.
2.1.7 OBJECTIVES OF BUDGETING
1. Planning
The process of budgeting begins with the establishing of specific targets of

performance and is followed by executing plans to achieve such desired goals and
from time to time comparing actual results with target goals. These targets include
both the overall business targets as well as the specific targets for the individual
units within the business. Establishing specific targets for future operations is part
of the planning function of management, while executing actions to meet the goals
is the directing functions of management.
153 | Page
CAMEROON
〉 Budget plans are made in synchronization with the overall objectives of the
organization, keeping mission and corporate strategy into account. Individual
plans at unit level should be in consonance with the organizational plan.
〉 Budgets plans are quantified, and responsibility is assigned to the persons
who are responsible for execution of the plan.
〉 Using the budget to communicate these expectations throughout the
organization has helped many companies reduce expenses during a severe
business recession.
〉 Planning not only motivates employees to attain goals but also improves
overall decision making. During the planning phase of the budget process, all
viewpoints are considered, options identified, and cost reduction
opportunities assessed. This process may reveal opportunities or threats that
were not known prior to the budget planning process.
2. Directing and coordinating.
〉 Once the budget plans are in place, they can be used to direct and coordinate
operations in order to achieve stated targets.
〉 A business, however, is much more complex and requires more formal
direction and coordination.
〉 The budget is one way to direct and coordinate business activities and units
to achieve stated targets of performance.
〉 The budgetary units of an organization are called responsibility centers. Each
responsibility center is led by a manager who has the authority and
responsibility for the unit’s performance.
〉 Objectives and degree of performance expected from a responsibility centers
are communicated rapidly.
154 | Page
CAMEROON
3. Controlling
〉 As time passes, the actual performance of an operation can be compared

against the planned targets. This provides prompt feedback to employees
about their performance.
〉 Feedback received in the form of budget reports from the responsibility
center. This report is helpful to know the performance of the concerned unit.
〉 Any unexpected changes into the conditions which were prevailing at the
time of preparing budget are considered and budgets are revised to show true
performance yardstick.
〉 Comparing actual results to the plan also helps prevent unplanned
expenditures. The budget encourages employees to establish their spending
priorities.
2.1.8 TYPES OF BUDGETS
Basically, there are three major types of budgeting systems used by managements
of any organization for the purposes of planning and control. These include the
fixed budgeting, flexible budgeting and incremental budgeting or zero-based
budgeting. A fourth classification which encompasses the different types
enumerated above includes the master budget.
155 | Page
CAMEROON
Figure 10: Types of Budgets
TYPES OF BUDGETS
Long term budgets
On the basis of
Short term budgets
time
Current budgets
Functional budgets
On the basis of
coverage
Master budget
Fixed budget
On the basis of
capacity
Flexible budget
Source: Author
156 | Page
CAMEROON
1) On the basis of time

〉 Long term budgets
Long term budgets are prepared for a longer period, specifically for more than a
year. These budgets are prepared by top management team. They are useful in
business forecasting and planning. Capital expenditure budgets and research
development budgets are just examples of long-term budgets.
〉 Short term budgets
A budget which is prepared for periods not more than a year is termed a short-term
budget. Sometimes, they may be prepared for shorter periods as for quarterly or bi-
annually. The scope of budgeting activities may vary considerably among different
organizations. It is basically used by lower levels of management.
〉 Current budget
A current budget is a budget which is related to the current conditions and is
prepared for a very short period of time.
2) On the basis of coverage

〉 Functional budget
It is one which is prepared for functions of the business. For example; the sales
budget, production budget, purchase budget, just to name a few. These functional
budgets are subsidiary to the master budget, and they would vary according to the
size and nature of the business.
〉 Master budget
According to the CIMA, ‘a master budget is a summary budget incorporating its
component functional budgets, and which is finally approved, adopted and
employed”. A master budget is also known as a comprehensive budget, which
incorporates all functional budgets.
157 | Page
CAMEROON
3) On the basis of capacity

〉 Fixed budget
A fixed budget is a budget which is not bound to change irrespective of changes in
surrounding elements. A fixed budget does not give room or make provision for
changes to the environment. It does not recognize the different behavioral patterns
of cost in relation to the various levels. Pogue (1997) in his article “Budgeting as an
aid to management performance” viewed fixed budgeting as being based on one
level of activity to which the various costs are related thus materials, labor and
overhead costs are related to this one level of activity.
Control of cost is difficult with fixed budgeting because if actual activity is
different from budgeted activity, then the budgeted costs by which actual costs are
measured by management information and action becomes meaningless. Fixed
budgets are sometimes criticized by analysts as being destructive because it
establishes expense limits that cannot be exceeded and again it does not give room
for comparison between the actual performance and the budgeted result.
〉 Flexible budgets
A flexible budget is a more practical approach to budgeting. Unlike the fixed
budget, the flexible budget changes with changes to the environmental factors such
as changes in quantity produced, or changes in sales.
The flexible budget is a type of budget which allows changes in its original form
because expenditures of certain goods and services vary with output at different
levels of production and economic activities. Unlike the fixed budget, it shows
several levels of activity and recognizes different behavioral patterns of costs in
relation to the various output levels. Harper (1999) defines it as “a budget which
lays down what should have happened in respect of each budget fact, or in view of
158 | Page
CAMEROON
the actual levels achieved”. The flexible budget affects the rigidity of the fixed
budget, and it basically recognizes that forecasts can be wrong. For instance: If the
firm makes a poor sales forecast, it does not limit the usefulness of the flexible
budget, primarily because the operating costs under the flexible budget can be
related to different levels of operating activities. The flexible budget ensures
effective control by recognizing that different cost provisions are necessary to meet
different levels of activity in business. It is particularly useful for control purposes
with the actual output achieved.
The incremental zero-base budgeting provides a total approach to budgeting. It

commences from the beginning with an appraisal of each function or activity and
subsequently goes on to examine and contract any alternatives. In other words,
every item budgeted expenditure must be examined critically and justified before it
is allowed to form part of the budget. Koontz (2003) states that the idea behind this
technique is to divide each program budget from base zero, costs as calculated
afresh, thus avoiding the common tendency in budgeting to look only at change
from previous periods. Here, the budget figure of the next period is altered, bearing
in mind the actual outcomes in the current budget period and the projected changes
for the view period.
Generally, zero base budgeting is applicable to those functional budgets which do
not involve direct costs. Where direct costs are involved (such as materials and
direct wages), they will be controlled by the normal production operation because it
would be expected that each item of direct cost had been monitored carefully and
its relationship with the product established. It is more applicable to budgets which
involve overhead expenditure such as administrative, selling and distribution
159 | Page
CAMEROON
overheads. In the opinion of Pogue (1997), the zero-base approach to budget

primarily centers on:
• Why the cost or activity is necessary in its present form
• The possibilities of activity or cost alternatives
• If these alternatives affect the product quality or product services
• Whether these alternatives affect the relationship and inter-relationship with
other costs and activities.
Overall however, zero base budgeting should be a useful tool in budget preparation
because it provides the total to the problem.
2.1.9 BUDGET ADMINISTRATION, PERIODS AND BENEFITS
A pertinent issue that needs to be examined in such a discourse is to identify those

saddled with the responsibilities of budget administration in an organizational
setting. The primary responsibility of drawing up the budget in most formal
organizations rests with the controller or budget officers, who receive inputs from
the representatives of the various units or departments to which the organization is
structured. The controller or responsible officer will subsequently screen proposals,
consolidate them into a company ride proposed budget and submit the budget to top
management for final approval. In large organizations however, the budget
preparation is the responsibility of the budget committee. The committee consists
of the functional heads with the chief executive as the chairman. The responsibility
of operating the whole system is undertaken by a budget officer, who is usually a
principal officer of the organization. Pandey (2002) identified some of the
functions of the budget committee to include the following:
〉 Issuing instructions to various departments
160 | Page
CAMEROON
〉 Receiving and checking budget officers

〉 Providing historical information to departmental managers as to help them in
their forecasting
〉 Suggesting possible revision
〉 Discussing difficulties with the managers
〉 Ensuring the managers prepare budgets in time
〉 Preparing budget summaries
〉 Submitting budgets to the committee and finishing explanations on particular
work.
〉 The budget committee is in essence a management committee and it tends to
bring together all activities of management sections or departments in an
effective manner.
In the preparation of a budget, total involvement of all management levels is

important. It is more necessary to get the participation in budgeting, especially at
the lower supervisory level. In recognition to Onourah (2005) who posited that
“budgeting is no longer and should not be the sole responsibility of the chief
executive budget officer or other top executives in the company. Rather, all levels
of the company will participate in the budgetary process and make commitments
to achieving the goal set by the budget. The wave of the future will be tapping all
the human resource that is available to a company in budgeting preparation and
control. Greater involvement by more people will commit them to achieving
budget goals when they are established. This will have important results in terms
of motivational achievement.”
161 | Page
CAMEROON
Ray Garrison, (1995) seemed to support the position of Onourah, and that is why in
his own views, the advantages that results thereof in a good budget administration
cannot be over emphasized as highlighted below.
〉 Individuals at all levels of the organization are recognized as members of the
team, whose views and judgments are valued by top management.
〉 The person in direct contact with the activity is in the best position to make
budget estimates, thus budget estimates tend to be more accurate and
reliable.
〉 An individual in the workplace is much more apt to work for fulfilling a
budget, which he had set himself as against a budget imposed on him.
〉 A self-imposed budget contains its own unique system of control such that if
an individual is not able to meet budget specification, he only has himself to
blame. But if a budget is imposed on him from above, he can maintain that
the budget was unreasonable or unrealistic to start with and therefore was
impossible.
In essence, all levels of management and staff in an organization, whether strategic,
tactical or operational, need to work together to produce the budget. This will
ensure that the whole organization functions as a single entity in which all its
constituent units are intimately interlinked.
Similarly, budget periods according to Lambe (2014) are the timeframe within
which the contents and frameworks of budgetary provisions are brought into
realities, considering that a budget itself is an action plan, structure to quantitative
terms for efficient and effective implementation and support long term strategic
decision making. Budgetary periods can span over wide-ranging periods of time,
ranging from few hours to several years, depending on the nature of the budget.
162 | Page
CAMEROON
Owler & Brown, (1999) identified budget periods as “the duration for which a
budget is to be implemented, which could be short term, medium term or long
term”. Consequently, a number of advantages or benefits are derived by an
organization from the preparation of a budget.
According to Dogara, some of the benefits, amongst several others include:
〉 Estimating the cost of distribution and general administration for the budget
period.
〉 Helps in determining the financial resources available, such that any
additional funds needed must be anticipated and planned for.
〉 The budget emphasizes that all division of a company work toward a
common goal. It demonstrates clearly that only when the efforts of all people
in the division of the company are directed properly, can goals be achieved.
〉 Budgeting performs control functions, since it is a plan of operation for a
definite period in the future. Operational activities throughout this period in
question are controlled by working with the framework of the budget. As
such, it becomes easy to track deviations and corrective measures are taken
appropriately, thus budgeting promotes efficiency and prevents waste.
〉 Budgeting has the benefit of forcing management to investigate important
factors before a balanced progress can be mapped out.
〉 It assists in estimating the cost of production for the budget and this involves
studying and forecasting material cost, labor cost and overhead costs.
〉 Budgeting results make more rational use of the firm’s resources and
facilities. Management can make more accurate estimates of future labor and
capital requirements. This contributes to the welfare of workers as well as the
employee since it tends to stabilize the demand of their services.
163 | Page
CAMEROON
The budgeting and budgeting control process overview

Figure 11:: Budgeting and budgeting control process overview
Review Approve Monitor and

Create
and annual control actual
annual
confirm budget results to budget
budget
corporate
strategy
2.1.10TECHNIQUES OF BUDGETARY CONTROL
Budgetary control is the way of controlling organizations in which different

budgets are made with these budgets, an organization identify its weaknesses and
then improves on them.
Budgetary control involves analyzing the results of the budget once you implement
it.
In budgetary control, we use the following techniques:
1) Variance Analysis
164 | Page
CAMEROON
First of all, budgets of different departments are made with estimated figures. After
this, it is compared with actual accounting figures. With this technique, we find
variances. These variances may be favorable and unfavorable. For example: We
have recorded actual quantity and cost of our raw material, after which, it is
compared with budgeted value of raw material, quantity and cost.
Consequently, we will realize the variance of labor cost and overhead cost. This
technique of budgetary control is important in reducing the cost of business.
2) Responsibility Accounting
Responsibility accounting is also a good budgetary control technique. In this

technique, we create cost center, profit center and investment center. All these
centers are just like departments of any organization. Now, we classify all our
employees work based on their centers. Every employee’s responsibility is fixed on
the basis of his target or performance. We proceed to record their performance
manually. Then we assess their accountability. For example, a company fixing the
target of sales in the sales department of 500 FCFA per month. For this, we have
appointed an expert salesman. But the sales department’s total per month sales is
300fcfa which is 200fcfa less than the sales target. Through this budgetary control,
we can take the decision of promotion and demotion of our employees to find other
reasons if we do not obtain our targets.
3) Adjustment of Funds
In this technique of budgetary control, top management takes the decision to adjust
funds from one project to another project.
4) Zero Base Budgeting (ZBB)
These days, zero base budgeting is a popular technique of budgetary control. In this
technique, every next year budget is made on nil bases. It can only be possible if
165 | Page
CAMEROON
your estimated income will be equal to estimate expenses. At that time, the
difference between estimated income and estimated expenses will be zero. If there
is any excess, it will be adjusted. For example: if your estimated revenue is more
than estimated expensed, you need to increase the amount or allocate in new
estimated expensed. With this, nothing will go to the next year. With zero base
budgeting technique, you can control every money which the company spends.
As earlier said, budgetary control is a system for monitoring an organization’s
processes in monetary terms. Types of budgetary controlling techniques are;
〉 Financial Budgets
〉 Operating budgets
〉 Non-monetary budgets
Budgeting is the formulation of plans for a given future period in numerical terms.
Organizations may establish budgets for units, departments, divisions or the whole
organization. The usual period for a budget is one year and is generally expressed
in financial terms. Budgets are the foundation of most control systems. They
provide yardsticks for measuring performance and facilitate comparisons across
divisions, between levels in the organization and from one period to another.
2.1.11 PURPOSE OF BUDGETS
Budgets usually serve four control purposes;

〉 They help the managers co-ordinate resources;
〉 They help define the standards needed in all control systems
〉 They provide clear and unambiguous guidelines about the organization’s
resources and expectations, and
〉 They facilitate performance evaluations of managers and units.
166 | Page
CAMEROON
A) FINANCIAL BUDGETS
Such budgets detail where the organization expects to get its cash for the coming
period and how it plans to spend it. Usual sources of cash include sales revenue, the
sales of assets, the issuance of stock, and loans.
On the other hand, the common uses of cash are to purchase new assets, pay
expenses, repay debts or pay dividends to shareholders.
Financial budgets may be of the following types:
〉 Cash budget
This is simply a forecast of cash receipts and disbursements against which actual
cash “experience” is measured.
It provides an important control system in an enterprise since it breaks down
incoming and outgoing cash into monthly, weekly or even daily periods so that the
organization can make sure it can meet its current obligations.
The cash budget also shows the availability of excess cash, thereby making it
possible to plan for profit making investments or surpluses.
〉 Capital expenditure budget
This type of financial budget concentrates on major assets such as a new plant, land
or machinery. Organizations often acquire such assets by borrowing significant
amounts through, say, long term bonds or securities.
167 | Page
CAMEROON
All organizations, large or small, business or non-business, pay close attention to

such a budget because of the large investment usually associated with capital
expenditure.
〉 The balance sheet budget

It forecasts what the organization’s balance sheet will look like if all objectives are
met. Hence, it serves the purpose of overall control to ensure that other budgets
mesh properly and yield results that are in the best interests of the organization.
B) OPERATING BUDGETS
This type of budget is an expression of the organization’s planned operations for a

particular period. They are usually of the following types:
〉 The sales or revenue budget

It focuses on the income the organization expects to receive from normal
operations. It is important since it helps the manager understand what the future
financial position of the organization will be.
〉 The Expense budgets
It outlines the anticipated expenses of the organization in a specified period. It also
points out upcoming expenses so that the manger can better prepare for them.
〉 The project budgets
It focuses on anticipated differences between sales or revenues and expenses. That
is, profit. If the anticipated profit figure is too small, steps may be needed to
increase the sales budget or cut the expense budget.
C) NON- MONETARY BUDGETS
168 | Page
CAMEROON
Budgets of this type are expressed in non-financial sales or revenues and expenses,
that is, profit. If the anticipated profit figure is too small, steps may be needed to
increase the sales budget or cut the expense budget.
D) FIXED AND VARIABLE BUDGETS
Regardless of their purpose, most budgets must account for the following three
kinds of cost;
〉 Fixed Costs
They are the expenses that the organization incurs whether it is in operation or not.
Salaries of managers may be an example of such a cost.
〉 Variable Cost
Such costs vary according to the scope of operations. The bets example may be the
raw materials used in production.
〉 Semi – Variable Costs
They also vary, but in a less direct fashion. Costs for advertising, repairs and
maintenance, just to name a few.
All these categories of cost must be accurately accounted for in developing a
budget. Fixed costs are usually the easiest to deal with. Variable costs can also be
forecasted although with less precision from projected operations.
Semi-variable costs are the most difficult to predict because they are likely to vary,
but not in direct relation to operations. For these costs, the manager must often rely
on experience and judgment.
169 | Page
CAMEROON
2.1.12 ADVANTAGES AND DISADVANTAGES OF BUDGETING
Budgets offer some advantages. They have potential drawbacks as well. Both are
summarized below;
Table 5: Advantages and disadvantages of budgeting
Strengths Weaknesses
1 Budgets facilitate effective control Budgets may be used too rigidly
2 Budgets facilitate coordination and Budgets may be time consuming

communication
3 Budgets facilitate record keeping Budgets may limit innovation and

change
4 Budgets are a natural complement to However, budgets hamper

planning development, change, and the
flexibility of the plan.
Source: Author
As shown on the table above, budgets facilitate effective control. By placing
financial values on operations, managers can monitor operations effectively and
pinpoint problem areas. Also, budgets facilitate communication and coordination
between departments. Budgets also help maintain records of organizational
performance. Finally, budgets are a natural complement to planning. Managers first
plan, and then develop control systems, budgets are often a natural next step.
170 | Page
CAMEROON
On the minus side, some managers apply budgets too rigidly. They fail to
understand those budget adjustments are necessary to meet the challenges of
changing circumstances.
Also, the art of developing budgets can most often be time-consuming. Moreover,
budgets may limit innovation and change. When all available funds are allocated to
specific operating budgets, it may be impossible to get additional funds to take
advantage of an unexpected opportunity.
Budgets are an important element of an organization’s control system. It is difficult
to imagine an organization functioning without proper budgetary provisions.
Despite some drawbacks, budgets generally provide managers with an effective
tool for executing the control function.
2.1.13 IMPORTANCE OF BUDGETS AND BUDGETARY CONTROL
Budgeting is a significant part of both the planning and controlling processes and is
widely used by managers to plan, monitor and control various activities at every
level of the organization. Thus, budgets can be highly useful and functional.
〉 Budgets identify current available capital; they provide an estimate of

expenditure and anticipate incoming revenue. By referring to the budget, the
enterprise can measure performance against expenditure and ensure that
resources are available for initiatives that support the enterprise’s growth and
development. Budgets enable the management of the enterprise concentrate
in cash flow, reducing cost, improving profits and increasing return on
investment.
〉 Budgeting is the basis for all business success. It helps with both planning
and control of the finances of the business. If there is no control on
171 | Page
CAMEROON
overspending, planning is futile and if there is no planning, there are no

business objectives to achieve.
〉 A budget is a plan to;
〉 Control the finances of the business
〉 Ensure that the business can fund its current commitments
〉 Enable the business to meet its objectives and make confident financial
decisions, and
〉 Make sure that the business has money for future projects.
〉 Budgeting estimates revenue, plans expenditures and restricts any spending
that is not part of the plan.
〉 Budgeting ensures that money is allocated to those things that support the
strategic objectives of the enterprise
〉 A well communicated budget plan helps the employees understand the
priorities of the enterprise
〉 The process of creating budgets provides opportunities to involve employees,
resulting in them sharing the organization’s vision and
〉 Engaging the team in reviewing and comparing the budget with actuals can
provide information that highlights strengths and weaknesses of the business.
〉 Budgets help managers in integrating personnel efforts within the
organization towards a common goal. By properly appropriating adequate
budgets to different activities within the organization, all activities can be
synchronized, and all efforts can be coordinated to achieve the organizational
objectives.
〉 Budgets act as controlling devices to correct deviations. If the expenditures
for a given activity exceed the allotted budget at any point in time, this will
172 | Page
CAMEROON
signal deviation from the prescribed course, requiring attention and action by
management.
〉 Budgets help in the just management of performance. Due to quantification
of budgets, the measurement of performance becomes more objective in
nature, thus eliminating biases that might be introduced due to subjective
evaluations.
〉 The budgeting process helps management to learn from past experience. The
management can critically look at the success or failure of the past budgets
and isolate errors and analyze their causes and establish steps to be taken to
avoid repetition of such errors.
〉 The budgeting process induces the management to shift attention to the
future operations. Since budgets are a part of the planning process, they force
managers to anticipate and forecast the trends and changes in the external
environment.
〉 Budgets facilitate communication throughout the organization. Budgets are
the blueprints for the company’s plans of operations and can only be
coordinated through proper communication at all levels, and these budgets
are especially helpful to lower level managers who are responsible for
implementing the budgets and the plans. They let these managers know how
their operations relate to other units or departments within the organization.
This improved communication reduces the risk of failure due to any
misunderstanding.
〉 Budgets help new people and lower level managers see where the
organization is going and where they fit in the organization. Such budgets
assist the junior managers to be acquainted with the organizational goals and
173 | Page
CAMEROON
priorities and their own responsibilities and how their operations relate to the
units or departments within the organization.
2.1.14 MAKING BUDGETARY CONTROL EFFECTIVE
Budgetary control can be made effective if an organization can ensure the

following:
〉 Setting Appropriate Standards
This is the key to successful budgeting. Many budgets fail for lack of such
standards, and some upper level managers hesitate to allow subordinates to submit
budget plans for fear that they may have no logical basis for reviewing budget
requests.
〉 Ensuring Top-Management Support
Budget making and administration must receive the whole-hearted support of top
management. If top management supports budget making, requires departments and
divisions to make and defend their budgets, and participate in this review, then
budgets encourage alert management throughout the organization.
〉 Participation by users in budget preparation

〉 Besides the support of top management, the concerned managers at lower
levels should also participate in its preparation is necessary to ensure
success.
〉 It may also prove worthwhile to give department managers a reasonable
degree of latitude in changing their budgets and in shifting funds, as long as
they meet their total budgets.
〉 Providing information to managers about performance under budget
174 | Page
CAMEROON
〉 If budgetary control is to work well, managers need ready information about

actual and forecasted performance under budgets in their departments. Such
information must be so designed as to show them how well they are doing.
2.1.15 STEPS IN PREPARING A BUDGET
These common steps can be listed below:
〉 Obtaining Estimates
Obtaining estimates of sales, production levels, expected costs and availability of
resources from each sub-unit/ division/department; the departmental heads or
managers are required to provide estimates of future conditions and activities that
will have an impact on the company. The discussion and participation may be in
the form of informal discussions and/or detailed written reports of plans which will
be submitted to the budget committee for approval.
〉 Coordinating Estimates
In many organizations, the budget committee evaluates the different plans
submitted by various organizational units to determine the potentiality of plans in
the overall interest of the company and to estimate what resources are available and
can be fairly allocated among the various units of the organization.
〉 Communicating Budget
Communicating the budget to responsible managers and the concerned departments
after individual budget plans have been approved in the light of organizational
goals and availability of resources, the budgets should be communicated to
departments and responsible managers. Changes and modifications incorporated in
the final budget should be made known to managers to obtain their cooperation and
175 | Page
CAMEROON
support for the budgets. Budgeting requires effective communication to convince

the departmental manager about changed in the budget.
〉 Implementing the budget plan
The final budget is presented to the managers concerned and adopted as the plan of
operation for the coming budget period. The various service units in a business
enterprise are required to provide necessary materials, labor, facilities and other
resources to carry out the budget.
〉 Reporting Interim Progress Towards Budgeted Objectives

As feedback in the budgeting process, performance reports are prepared to inform
departmental managers and to management about the performances achieved in
terms of budgeted figures. Such an investigation may call for a need to revise the
budget during the year. For example: it is advisable to reduce production when
sales are low than to continue with high production levels. This feedback of
information can be used as a basis for preparing the next year’s budget.
2.2 THEORETICAL FRAMEWORK
Theoretical framework involves the review of theories underlying the study topic.
Theories covered in this study include: -The Theory of Budgeting, The
Accounting Theory, Budgetary Control Theory, Allocation Of Resource Theory,
and others.
1) The Theory of Budgeting
Hirst (1987) explains that an effective budgetary control solves an organization’s

need to plan and consider how to confront future potential risks and opportunities
by establishing an efficient system of control. Shields and Young (1993) define the
176 | Page
CAMEROON
theory of budgeting as a detector of variances between organizational objectives

and performance. Budgets are considered to be the core element of an efficient
control process and consequently vital part to the umbrella concept of an effective
budgetary control.
2) Contingency Theory
Donaldson and Mark (1977) based on the assumption that the effectiveness of tight
budgetary control on non-financial performance depends on the nature and
complexity of the organization and its environment. It assumes that during
uncertain or unstable environments, tight budgetary control is more effective in
maximizing non-financial performance.
The limitation to this theory is that, it may be challenging to determine the right
budgetary control measures that will work for every organizational context.
3) Accounting Theory
Kaplan and Norton (1996) assert that the accounting theory is aimed towards
provision of a coherent set of logical principles that form the general frame of
reference for the evaluation and development of sound accounting practices and
policy development. Otley and Pollanen (2000) exemplifies that the purpose in
developing a theory of accounting is to establish Standard for judging the
acceptability of accounting methods. Procedures that meet the Standard should be
employed in practice of accounting. Theory has assisted in making predictions of
the likely outcome of budget action in a given set of circumstance and effect of any
change in circumstances. Accounting theory has developed models in which
Standard can be set. Management accounting theory also provides several
yardsticks to be used for control. That is variance analysis. Since budget is an
instrument of plan. It provides a framework of given feed back to the management
177 | Page
CAMEROON
on the implementation of budget. When implementing the accounting theory

historical data is instrumental since this data serve as an input for making forecast.
The cost accounting theory developed by Wedgwood in the early 20th century
which stresses on cost identification, allocation and revenue maximization has
provide a basic insight and blue print in budget and control in organization.
According to Hopwood (1976), the matching concept in accounting also plays a
role as reference issue in budget analysis.
4) Budgetary Control Theory
According to this theory, a good budgetary control system must be able to address
the efficiency and effectiveness of the organization’s expenditure. A good budget is
determined by the level of income of the organization (Robinson, 2009). Sawhill
and Williamson (2001) argue that budgets can be used an indicator of the
performance of the ruling government. It is a statement of whether they are
competent in administering the organization and the national resources. It is
therefore essential for the organization to understand its budgeting system and give
priority to urgent matters that require attention to its control tools. In order to find
out the relationship between the budgeting system and the organizational
performance, it is important for the firm to determine the patterns of the
expenditure of the organization and its performance (Phyrr, 1970).
5) Goal Setting Theory (Locke and Latham: 1990 - 2002)
Locke and Latham (1990-2002) developed a goal setting theory within industrial
organization psychology over a 25-year period based on some 400 laboratory and
field studies. According to Locke, goal setting is effective on any task where the
person has control over his or her performance. The question was: How do you get
178 | Page
CAMEROON
goal commitment? The initial belief was: through participation. Participation in

decision making was a popular topic of study following World War II.
Locke (1968) predicted that participation would enhance goal commitment. After
reviewing all the reviews and controversies regarding participation in decision
making Locke and Latham (1990) concluded that participation in decision making
is more fruitfully conceived as a method of information exchange or information
sharing rather than as a method of gaining goal commitment. Hollenbeck,
Williams, and Klein (1989) developed a useful measure of goal commitment,
which they have subsequently refined. They and others found that goal
commitment was most important when goals are difficult. This suggests that
commitment acts in two different ways: as a moderator when there is a range of
goal difficulty and as a main effect when goal level is held constant at a high level.
In discovering goal mechanism, Locke and Latham documented the directive

effect of goals by showing that when feedback is given for multiple performance
dimensions, performance only improves on those dimensions for which goals are
set (LockeandBryan,1969). The effort dimension was validated implicitly by
showing that people with hard goals work harder, and later others did study
involving direct ratings of effort. La Porte and Nath (1976) and Latham and Locke
(1975) showed that goals affect persistence. Direction, intensity and persistence, of
course, are the three aspects of motivated action. Each of these mechanisms easily
verifiable by introspection.
Knowledge is another goal mechanism, Locke and Latham (1990) rest on the
premise that goal-directed necessitate essential attribute of human action and that
conscious self- regulation of action, though volitional is the norm. Locke,
etal,1989 differentiated the effects of goal difficulty from those of goal specificity
179 | Page
CAMEROON
by showing that specificity alone affected performance variance whereas difficulty

affected performance level.
They concluded that all goal effect a remediated by task knowledge. Motivation
without cognition is useless. Conversely, cognition without motivation is also
useless because the individual will have no desire to act on what is known. A
budget is a way of setting organization goals for a specific period of time. The
prime axiom of goals leads to higher performance than when people strive to
simply “do their best” (Locke and Latham 1990) the performance benefits of
challenging specific goals have been demonstrated in hundreds of laboratory and
field studies (Locke and Latham 1990, 2002). Budgets should therefore be set to a
standard that is quite challenging for employees to achieve, obtaining a high
standard set goal creates a sense of efficiency and this will bring about yearn to
achieve more. This theory was used to guide this study.
6) Self-Efficacy Theory
Bandura (1986) in his theory assumes that tight budgetary control on non-financial
performance can enhance the self-efficacy of organizational members. It assumes
that when employees have control over their environment, they tend to achieve
better non-financial performance results. It may be difficult to implement this
theory in practice, particularly in organizations that are highly centralized.
7) Resource Dependency Theory
Pfeffer and Salancik (1978) assume that tight budgetary control on non-financial
performance helps organizations to manage resource dependencies, such as
regulations and government funding. It assumes that organizations that have lower
control over their resources tend to rely more on tight budgetary control. However,
180 | Page
CAMEROON
there may be a tradeoff between achieving tight budgetary control and maintaining
collaborative relationships with external stakeholders.
8) Social Exchange Theory

Emerson (1976) in this theory assumes that tight budgetary control on non-financial
performance can improve social exchange relationships between organizational
members. It assumes that organizational members who receive rewards for
achieving budgetary goals will be more likely to perform at high levels. A
limitation to this theory is that, there may be a lack of motivation to achieve non-
financial performance objectives that are not tied to budgetary rewards.
9) Transaction Cost Theory

Williamson (1981) in this theory assumes that tight budgetary control on non-
financial performance reduces transaction costs related to monitoring
organizational performance. It assumes that organizations that are less hierarchical
tend to have lower transaction costs related to performance monitoring.
Nonetheless, there may be an overemphasis on monitoring performance at the cost
of implementing successful organizational strategies.
10) Resource-Based View Theory

Barney (1986) assumed that tight budgetary control on non-financial performance
helps organizations achieve competitive advantage by leveraging internal
resources. It assumes that organizations with valuable, rare, and difficult-to-imitate
resources tend to succeed in competitive markets. However, there may be resource
181 | Page
CAMEROON
constraints that limit the ability of organizations to invest in non-financial

performance objectives.
2.3 EMPERICAL REVIEW
1. Responsibility Accounting
Sawabe (2015) studied Value-driven responsibility accounting - dynamic tensions

generated by competing values embedded in the management control system in the
context a Japanese manufacturing company and a consulting arm offshoot of the
company’s planning office. Using Simons’ levers of control (LOC) framework, the
researcher adopted a case study method to investigate the way in which core values
affect the design and use of a responsibility accounting system, which in turn shape
the challenges which operational managers face, and how such managers fulfill
their responsibilities by delivering financial results while at the same time being
faithful to the organization’s core values.
The findings of the study suggested avenues for further research regarding the
sources and nature of dynamic tensions generated and managed by the MCS.
Fowzia (2008) examined the use of responsibility accounting to measure the
satisfaction levels of Service organizations in Bangladesh. The objectives of the
study were to conceptualize the types of responsibility accounting system and
responsibility accounting model, to assess the application level of different types of
responsibility accounting system in various types of service organizations in
Bangladesh, to examine whether the satisfaction level of the elements of
responsibility accounting model regarding different types of service organizations
in Bangladesh were same or not and to find out the influential elements on the
182 | Page
CAMEROON
overall satisfaction of responsibility accounting system in service organizations in

Bangladesh.
The findings indicate that satisfaction of overall responsibility accounting system is

influenced by satisfaction of assignment of responsibility, performance
measurement techniques and reward system. Nawaiseh et al. (2014) carried out an
empirical assessment of measuring the extent of implementing responsibility
accounting rudiments in Jordanian Industrial Companies listed at Amman Stock
Exchange. The objectives of the study were to identify the extent the Jordanian
Industrial Companies fully implement responsibility accounting, to disclose the
obstacles that may abstain of full implementation of responsibility accounting
rudiments. The study recommended the necessity for public shareholding
companies to give generally more interest to managerial accounting, specifically
for responsibility accounting by recruiting professionals in accounting departments,
particularly, CMAs. Nyakuwanika et al. (2012) analyzed the effective
responsibility accounting system strategies in the Zimbabwean Health Sector 2003-
2011.
The study set out to come up with strategies to ensure effective responsibility
accounting system in the Ministry of Health and Child Welfare MOHCW in
Mashonal and West Province of Zimbabwe. It was observed that departments were
operating with mandated budgets and that planning and control were not integrated.
In addition, it was also observed that performance reports were being used to fix
blame on management and that performance reports were not being distributed to
sectional managers on a regular basis.
2. Zero based Budgeting
183 | Page
CAMEROON
Rehman et al. (2011) studied the impact of zero-based budgeting (ZBB) on

employee commitment. The study based upon data collected from two big cities of
Pakistan. The objective of the research was to find out if there was any relation
between zero-based budgeting and employee commitment. In this research, data
was collected from public and private sector employees from Islamabad and Lahore
region. The findings of the research were that zero based budgeting has moderate
effect on employee commitment in an organization. Meliano (2011) surveyed
management perception on the usefulness of zero-based budgeting: evidence from
non-governmental organizations in Kenya.
The objective was to establish the managerial perception on the usefulness of Zero-
Based Budgeting among nongovernmental organizations in Kenya. From the
findings, the study concluded that zero based budgeting is very useful in Non-
Governmental Organizations in Kenya given that it has flexibility, communicate
corporate goals, cost minimization and knowledge sharing. Ekanem (2014)
surveyed Zero-based budgeting as a management tool for effective university
budget implementation in university of Calabar, Nigeria the purpose of this study
was to investigate the application of zero-based budgeting (ZBB) as a management
tool for effective university budget implementation in University of Calabar,
Nigeria, Results revealed that the application of ZBB for university budget
implementation was effective; some factors inhibited the application of ZBB while
the application of ZBB was dependent on university senior staff for university
budget implementation. The researcher concluded that zero-based budgeting was
credible and rewarding to the university budget implementation in University of
Calabar. The application of ZBB for university budget implementation was
effective and also significant dependent on the university senior staff. The study
184 | Page
CAMEROON
recommended among others that university management should ensure timely

release of funds an efficient management accounting system for improved budget
implementation in the university (Ekanem, 2014).
3. Variance Analysis
Kabiru, Dandago and Adah (2013) conducted a study to determine the relevance of
variance analysis in managerial cost control within the context of Nigeria. The
study intended to review and analyze literature to find out what constitutes efficient
standard in a manufacturing organization with a view to disclosing realistic
variance for management cost control and based on the review and analysis to
assess the extent to which costs variance analysis can adequately be useful in
controlling costs to provide for improved profit. The study found out that the
efficient or realistic standards are those standards that are set by the effort of
operator/technical managers and top management of an organization so that they
can lead to greater commitment towards meeting the targets set therein, the
standard to be adopted should be the one that will assist management to attain its
strategic goals with less cost through control of costs, reviewing of the variances
should focus on the most concerned areas so that management can become aware
of any changes in the organization, that management must create time to investigate
cost variances that require investigation for control purposes in order to improve
the efficiency of an organization and that variances should be disposed away as
soon as possible to achieve the opportunities for corrections. Aruomoaghe and
Agbo (2013) investigated the application of a variance analysis as a tool for
performance evaluation with a particular focus on the cost and benefit associated
with its utilization as a performance evaluation tool. The objectives of the study
were to ensure that the departmental managers don’t deviate from the budgeted
185 | Page
CAMEROON
standards put in place in the organization as whole, to ensure that the objectives of
the organization are achieved through the budgetary techniques.
The researchers found out that it is reasonable for managers to exercise caution in
the use of variance analysis so that the correct decisions will be made. Also,
managers should exercise considerable care in their use of a standard cost system
and it is particularly important that managers go out of their way to focus on the
positive, rather than just on the negative, and to be aware of possible unintended
consequences of the choices they make on their organizational objectives. Salman
(2008) carried out a study on variance analysis as a tool for management control.
The study sought to examine variance and show how it is both as accounting
information as well as a tool for management control system based on output using
five brands of 7 feet mattresses for the years (2001-2005). Based on the findings
the researcher concluded that variance analysis is a useful tool for management
control system, with the use of F-distribution and T-test. The F-distribution showed
that there was no significant difference between the variances of all the brands of
mattresses studied.
Awen (2008) studied management control through variance analysis. The paper
included the purpose of variance analysis which is mainly to provide pointers to the
causes of off-standard performance so that management can improve operations,
increase efficiency, utilize resources more effectively and reduce costs as well as
report exceptional variances to management for action. The researcher concluded
that variance analysis brings out the significance of variances in terms of their
sources, causes and responsibility which helps management in evaluating
individual performance by highlighting the difference and desired performance.
The researcher findings were in line with those of Hansen et al. (2000) who
186 | Page
CAMEROON
concluded that it is difficult to assess the costs and benefits of variance analysis on
a case-by-case basis, many firms adopt the general guideline of investigating
variances only if they fall outside of an acceptable range.
As enumerated earlier, an implied meaning of budgets and the setting of budget

targets in fact is an instrument for the purpose of control. Much planning does not
necessarily bring into effect a proposed course of action, so also is budgetary
control which must be effective for budgets to remain relevant.
Budgetary control is principally geared towards achieving in a functional and

effective manner, the proposed course of actions quantified in the budgetary
framework.
According to Brown & Howard, (2002), budgetary control can be viewed as a

system controlling cost which includes the preparation of budgets and coordinating
the departments and establishing responsibilities, comparing actual performance
with the budgeted and acting upon results to achieve maximum profitability.
In another light, the Institute of Cost and Management Accountants, (1998) defined
it as “the establishment of budgets relating the responsibility of executives to the
requirement of a policy and having the continuous comparison of actual with
budgeted results either to secure by individual action, the objective of that policy
or to provide a basis for revision.”
From the above propositions, it simply means that to achieve budgetary control,
actual performance must be measured against the budgeted target, at regular
intervals so that performance can be properly assessed and evaluated. Management
must first of all establish goals and standards that will guide it and draw up its
target, against which actual performance can then be compared with established
187 | Page
CAMEROON
standard and if any deviation occurs corrective measures be taken for future
panning.
Hand, (1986) in his position identified three basic stages in budgetary control
processes and they include the following:
〉 Setting up pre-determined standards

〉 Measurement of actual performance against the predetermined standards,
〉 Corrective action if necessary, to bring the actual performance in line with
the predetermined standards.
The concept of budgetary control cannot be divorced from that of an executive

responsibility. Furthermore, the objective of budgetary control is to enable
management to conduct business in the most efficient manner. Scott, (2000) also
lends credence to this fact when he posited that budgetary control is more than an
administrative technique which aims to ensure that management functions are
carried out in a well-organized fashion. According to him, budgetary control rather
aims at strengthening communication within an organization in order to ensure that
budgetary provisions remain goal oriented. Budgetary control equally provides the
basis for certain fundamental actions (such as administration control, direction of
sales effort, production planning, control of stocks, price fixing, financial
requirement, expenses control and production). Given the following, the basic
objective of budgetary control includes the following:
〉 To bring together the ideas at all levels of management in the preparation of

the financial plan.
〉 To co-ordinate all the activities of the business.
〉 To centralize organizational control.
〉 To control each function so that the best possible results may be obtained.
188 | Page
CAMEROON
〉 To act as a guide for management’s decision when unforeseeable conditions

arise.
〉 To plan and control income and expenditure so that maximum profitability is
achieved.
〉 To direct all expenditure in the most profitable direction.
〉 To ensure that sufficient working capital is available for the efficient operation
of the business.
〉 To provide a yardstick against which actual performance can be measured.
〉 To show management what actually is needed to remedy a situation.
〉 To implement budgetary provisions in the most efficient manner.
Overall budgetary control as a management technique must be given the adequate

attention it deserves in any organization, given the fact that good planning without
an effective control for the purpose of measuring performance will result in
inefficiency.
189 | Page
CAMEROON
CHAPTER THREE: RESEAECH METHODOLOGY AND INTERNSHIP

ACTIVITIES
3.1 INTRODUCTION
Methodology is any research endeavor and simply describes the approach adopted
to conduct such research. Research is a “creative and systematic work undertaken
to increase the stock of knowledge”. it can also be defined as the systematic
investigation into and study of materials and sources in order to establish facts and
reach new conclusions. Methodology is a system of methods used in an area of
study or activity.
According to Leedy and Ormoed (2001) research methodology refers to “the

general approach the researcher takes in carrying out a research project”. On the
other side, Kothari, (2006) defines research methodology as a scientific and
objective understanding of how research is conducted. Through it; various steps are
employed in studying a research problem along with the logic behind them. This
chapter is organized into subsections as follows; chapter overview, research design,
study area, target population, sample and sampling procedures, data collection
methods, validity and reliability, data analysis and research ethics.
Research methodology is the specific procedures or techniques used to identify,

select, process, and analyze information about a topic. In a research paper, the
methodology section allows the reader to critically evaluate a study’s overall
validity and reliability.
190 | Page
CAMEROON
3.2 RESEARCH DESIGN

Quantitative research approaches rely on sophisticated and systematic procedures
of testing, verifying, and proving research hypotheses. The main aim of a
quantitative research approach is to test whether a common prediction or
generalization of a theory is true or not. However, in the data collection process a
quantitative approach relies on predetermined response classifications, such as in
survey questionnaires or structured interviews with which statistical methods can
be used in the data interpretation process (Bryman & Bell 2011).
The research approach for the data collection for this thesis is based on a
quantitative approach. As the before mentioned research questions are reformulated
into research hypotheses, this presents the first step towards a quantitative
approach. Furthermore, primary data was collected using a questionnaire presented
to 35 small and medium size enterprises, which is also intended to be the base for
the statistical analysis and interpretation process.
〉 Population
Every social science research usually has a target population which information can
be taken from. The target population is the chosen group of people residing in a
defined geographical area or specialized in a domain / field of study.
〉 Target population
The target population of a study is the broad group of people that researchers are
examining. The population of interest of the study consisted top management
(general managers and branch managers), middle level (line managers and
departmental heads) and first line level (technical staff etc.) of 35 small and
medium sized enterprises in Yaoundé, Cameroon.
191 | Page
CAMEROON
Table 6: Sample population
MANAGERIAL POSITION QUANTITY
TOP LEVEL MANAGEMENT 17
MIDDLE LEVEL
17
MANAGEMENT
FIRST LINE MANAGEMENT 16
TOTAL 50
Source: Author 2023.
3.3 METHOD OF COLLECTING DATA

Krishnaswami and Ranganatham (2005) define data as the “facts, and other
relevant materials, past and present, serving as base for study and analyses”. Also,
according to Polit and Hungler (1999) data means the information obtained in a
course of a study.
In simpler terms, data collection is the process of gathering and measuring
information on variables of interest, in an established systematic fashion that
enables one to answer stated research questions, test hypotheses, and evaluate
outcomes.
Therefore, data is raw, unorganized facts that need to be processed. In order to
accomplish the objectives in this research and come up with the correct results the
researcher used primary data collection methods. The researcher used mostly
192 | Page
CAMEROON
questionnaires in collecting data from staff of 35 small and medium size enterprises
for this work. Observations were equally made as a means of getting data because it
is a convenient method since respondents gave their responses independently and
discreetly.
3.4 RESEARCH HYPOTHESES

All hypotheses were stated in the alternative form.

The investigated research model contains two main variables: one independent
variable which is tight budgetary control and a dependent variable, which is non-
financial performance. Non-financial performance focuses on motivation,
organizational commitment, and satisfaction of employees. The study has one
independent variable, which is Tight Budgetary control, subdivided into 3
constructs: planning, coordination and, control and evaluation.
In order to answer the problem statement, whether budgetary control is either

positively or negatively related to organizational performance, the suggested sub-
research questions are reformulated into quantitative research hypotheses. As it can
be seen in the developed model above, the formulated statistical hypotheses will
test the relationship between the dependent variable tight budgetary control and the
variables of financial and non-financial performance.
193 | Page
CAMEROON
Furthermore, to formulate the hypotheses and to make an educated guess in which

direction the analysis of the collected data will result, previous research and the
academic literature has been considered.
As the fundamental research question of this thesis investigates the effect of tight
budgetary control on managerial behavior, the sub-research questions will be
reformulated into three hypotheses that will consider the predicted outcome of the
dependent variables, motivation, organizational commitment, satisfaction, and
stress.
3.5 QUESTIONNAIRE
The main instrument for data collection was a questionnaire containing a series of
close-coded questions designed to facilitate responses from respondents. The
questionnaire, which can be found in the appendix, contains in total 40 questions. It
was divided into 5 specific sections. The first part of the questionnaire asks
questions about the respondent’s organizational position. The second part asks
questions regarding budget planning and the budgetary control system that is
applied by the organization and to which the managers are exposed to. The third
section includes questions about the relationship between coordination and
organizational non-financial performance. Followed by the fourth section on the
relationship between control and evaluation on organizational performance. The
fifth section includes questions seeking to find the relationship between the
independent and dependent variables.
194 | Page
CAMEROON
3.6 TYPES OF DATA
Wikipedia, (2016) defines data as a set of values of quantitative or qualitative

variables. Data are facts or figures from which conclusions can be drawn.
3.6.1 Primary Data
The primary data were obtained by questionnaires submitted to respondents. The

questionnaire was formulated by the researcher and it involved questions on the
effects of tight budgetary control on organizational performance in terms of
financial and non-financial performance. It also involved questions on the problems
they face in the implementation of their budgets, and how top-level management,
alongside middle level management control the approved budgets of the
microfinance within the course of the year.
3.6.2 Secondary Data
The secondary data was obtained from publications, the internet, text books,
articles and other approved documented pieces of writing.
3.7 TYPES OF RESEARCH
Types of research methods can be broadly divided into two. That is;
〉 Quantitative
〉 Qualitative categories
Quantitative Research
195 | Page
CAMEROON
Quantitative research was used as emphasis was placed on the collection of

numerical data, the summary of those data and the drawing of inferences from the
data.
Qualitative Research
Qualitative research was used as well, as the researcher made used of interviews,
observations and other qualitative data collection techniques.
3.8 SAMPLING TECHNIQUES
The sampling techniques adopted for the population of the study is the non-
probability type. That is, the non-probability-based style of judgmental sampling.
3.9 DATA ANALYSIS
Data was analyzed using the Pearson coefficient of correlation, frequency

distribution tables, histograms and graphs expressed using percentages. The raw
scores and their equivalent percentages were used in answering research questions
earlier developed for the study.
196 | Page
CAMEROON
CHAPTER FOUR: DATA PRESENTATION, ANALYSIS AND

INTERPRETATION OF RESULTS.
4.1 DATA ANALYSIS AND PRESENTATION OF RESULTS

Since the survey questionnaire was divided into different sections; questions that
measured tight budgetary control and non-financial performance, the data included
some variables, which measured the same thing. In order to get an appropriate
single measurement for each section, it was necessary to conduct a reliability
analysis to determine the correlation between the sub constructs of budgetary
control and the sub variables of non-financial organizational performance.
Furthermore, as some of the survey questionnaire questions were based on a
reverse scale, these questions were recoded to be in line with the other questions. In
analyzing the research, it was important to understand what the response rate of the
research was.
MANAGERIAL POSITION QUANTITY
Top Level Management 17
Middle Level Management 17
First Line Management 16
Total 50
Table 7:Managerial position
197 | Page
CAMEROON
Source: Author (2023)
198 | Page
CAMEROON
The table above shows the response rates of the various respondents, categorized
under various levels in the organization. The respondents were all given the same
questionnaire to answer. 62 questionnaires were distributed amongst the sample
population. 50 questionnaires were answered and submitted to the researcher.
TABLE 4.1: SECTOR OF WORK
In which sector do you work in?

Valid Cumulativ
Frequency Percent
Percent e Percent
Vali MARKETING AND
10 20.0 20.0 20.0
d SALES
FINANCE 16 32.0 32.0 52.0
HEALTH AND 12 24.0 24.0 76.0
SOCIAL CARE
EDUCATION AND 7 14.0 14.0 90.0
LABOUR MARKET
GORWTH AND 4 8.0 8.0 98.0
COMMUNITY
DEVELOPMENT
OTHERS 1 2.0 2.0 100.0
Total 50 100.0 100.0
Table 8: Sector of work
199 | Page
CAMEROON
From the above table, 20% of the sample population work in marketing and sales,
32% work in Finance, 24% work in health and social care14% work in Education
and Labor market, 8% work in Growth and Community development, and 2%
work in other sectors not mentioned in the questionnaire.
TABLE 4.2: Organizational Budgetary control System
Do you experience the budgetary control system at your organization as a tight control
system?
Cumulative
Frequency Percent Valid Percent
Percent
Valid YES 37 74.0 74.0 74.0
200 | Page
CAMEROON
NO 13 26.0 26.0 100.0

Total 50 100.0 100.0
Ta
ble
9:
Organizational budgetary control system
From the above table, 74% of the sample population agree that they experience
the budgetary control system at their organization as a tight control system, and
26% of this population disagree about experiencing the budgetary control system
at their organization as a tight control system.
TABLE 4.3: Organizational Position
Position occupied in the organization

Valid Cumulative
Frequency Percent
Percent Percent
201 | Page
CAMEROON
TOP LEVEL 17 34.0 34.0 34.0

MIDDLE LEVEL 17 34.0 34.0 68.0
Valid FIRST LINE
16 32.0 32.0 100.0
LEVEL
Total 50 100.0 100.0
Table 10: Organizational position
The above table shows the organizational position of the members of the sample
population. It can be seen that, 34% of the sample population comprised of top-
level managers, another 34% comprised of middle level managers and 3%
comprised of first line managers.
202 | Page
CAMEROON
TABLE 4.4: Do you experience the budget control system at your organization as a
result of the policies put in place?
Cumulative
Frequency Percent Valid Percent
Percent
YES 41 82.0 82.0 82.0
Valid NO 9 18.0 18.0 100.0
Total 50 100.0 100.0
Table 11: Budget control system as a result of the policies put in place
203 | Page
CAMEROON
The table above shows the percentage of the sample population that agrees or
disagrees to experiencing the budget control system at their organization as a
result of the policies put in place. 82% of this population confirmed to
experiencing the budget control system at their organization as a result of the
policies put in place, while 18% disagreed.
TABLE 4.5: Are you aware of the budgets prepared by your organization?
Valid Cumulative
Frequency Percent
Percent Percent
YES 35 70.0 70.0 70.0
NO 10 20.0 20.0 90.0
Valid NOT
5 10.0 10.0 100.0
APPLICABLE
Total 50 100.0 100.0
Table 12: Are you aware of the budgets prepared by your organization?
204 | Page
CAMEROON
The table above gives the responses of the sample population to the question
asking them if they are aware of the budgets prepared by their organizations. 70%
of the population agreed to being aware of the budgets prepared by their
organizations, 20% disagreed, and 10% mentioned that budget preparation was
not applicable in their organizations.
TABLE 4.6: Are you aware of the budgeting process taking place in your organization?
Valid Cumulative
Frequency Percent
Percent Percent
Valid YES 35 70.0 70.0 70.0
205 | Page
CAMEROON
NO 10 20.0 20.0 90.0

NOT
5 10.0 10.0 100.0
APPLICABLE
Total 50 100.0 100.0
Table 13: Are you aware of the budgeting process taking place in your organization?
From the table, the respondents were asked if they were aware of the budgeting
process taking place in their organization. 70% confirmed their awareness in this
process, 20% had opposing opinions and 10% stated that the budgeting process in
their organization was not applicable.
206 | Page
CAMEROON
TABLE 4.7: How often are budget meetings conducted by the board?
Valid Cumulative
Frequency Percent
Percent Percent
FREQUENTLY 24 48.0 48.0 48.0
RARELY 18 36.0 36.0 84.0
Valid NOT
8 16.0 16.0 100.0
APPLICABLE
Total 50 100.0 100.0
Table 14: How often are budget meetings conducted by the board?
Table 4.7 seeks to analyze numerically; how often budget meetings are conducted
by the boards of the various respondents. 48% of the respondents stated that
207 | Page
CAMEROON
budget meetings are frequently conducted by the board, 36% stated that budget
meetings are rarely conducted by the board and 16% stated that budget meetings
were not applicable.
TABLE 4.8: Are financial targets set up in the meetings?
Frequen Valid Cumulative

Percent
cy Percent Percent
YES 33 66.0 66.0 66.0
NO 9 18.0 18.0 84.0
Vali
NOT
d 8 16.0 16.0 100.0
APPLICABLE
Total 50 100.0 100.0
Table 15: Are financial targets set up in the meetings?
208 | Page
CAMEROON
Table 4.8 aimed at numerically getting the respondents to say if financial targets
are set up in budget meetings. The majority of the population 66% confirmed that
financial targets are set up in these meetings, 18% denied and 16% stated that
financial targets in budget meetings were not applicable at their organizations.
TABLE 4.9: Are budgetary responsibilities established for different sections during the
meetings?
Valid Cumulative
Frequency Percent
Percent Percent
209 | Page
CAMEROON
YES 31 62.0 62.0 62.0

NO 9 18.0 18.0 80.0
Valid NOT
10 20.0 20.0 100.0
APPLICABLE
Total 50 100.0 100.0
Table 16: Are budgetary responsibilities established for different sections during the meetings ?
From the above table, 62% of the sample population agreed to the establishment
of budgetary responsibilities for different sections during budget meetings, 18%
contrasted and 20% stated that budgetary responsibilities for different sections
during budget meetings was not applicable in their organizations.
210 | Page
CAMEROON
TABLE 4.10: Are staff aware of their responsibilities in these meetings?
Valid Cumulative
Frequency Percent
Percent Percent
YES 28 56.0 56.0 56.0
NO 12 24.0 24.0 80.0
Valid NOT
10 20.0 20.0 100.0
APPLICABLE
Total 50 100.0 100.0
Table 17: Are staff aware of their responsibilities in these meetings?
211 | Page
CAMEROON
Table 4.10 sought to understand if the respondents were aware of their

responsibilities in budget meetings. From the table, 56% of the respondents
concurred to being aware, 24% contrasted and 20% stated that responsibilities in
these meetings were not applicable.
TABLE 4.11: Each department takes part in the planning process by participating in
the determination of appropriate goals and objectives concerning their activities.
212 | Page
CAMEROON
Valid Cumulativ
Frequency Percent
Percent e Percent
STRONGLY AGREE 6 12.0 12.0 12.0
AGREE 20 40.0 40.0 52.0
NEUTRAL 12 24.0 24.0 76.0
Vali
DISAGREE 7 14.0 14.0 90.0
d
STRONGLY
5 10.0 10.0 100.0
DISAGREE
Total 50 100.0 100.0
Table 18: Each department takes part of the planning process by participating in the determination of
appropriate goals and objectives concerning their activities.
213 | Page
CAMEROON
Table 4.11 aimed at understanding whether each department takes part in the
planning process by participating in the determination of appropriate goals and
objectives concerning their activities. 12% had strong positive opinions with
regards to this question, 40% agreed, 24% of the sample population was neutral,
14% disagreed and 10% had strong opposing opinions regarding the question.
TABLE 4.12: In the planning process, budget administrators are solely responsible for
making policies to ensure that the budget is respected.
Valid Cumulativ
Frequency Percent
Percent e Percent
AGREE 13 26.0 26.0 54.0
NEUTRAL 13 26.0 26.0 80.0
Vali
DISAGREE 8 16.0 16.0 96.0
d
STRONGLY
2 4.0 4.0 100.0
DISAGREE
Total 50 100.0 100.0
Table 19: In the planning process, budget administrators are solely responsible for making policies to
ensure that the budget is respected
214 | Page
CAMEROON
From table 4.12, the respondents were asked if in the planning process, budget
administrators are solely responsible for making policies to ensure that the budget
is respected. 28% of the respondents strongly agreed, 26% agreed, another 26%
was neutral, 16% disagreed and 4% had strong contrasting opinions with regard to
the assertion.
TABLE 4.13: A budget is essentially a forecast rather than a true commitment.
Valid Cumulative
Frequency Percent
Percent Percent
Valid STRONGLY
9 18.0 18.0 18.0
AGREE
AGREE 23 46.0 46.0 64.0
215 | Page
CAMEROON
NEUTRAL 12 24.0 24.0 88.0

DISAGREE 6 12.0 12.0 100.0
Total 50 100.0 100.0
Table 20: A budget is essentially a forecast rather than a true commitme
Table 4.13 aims at understanding the respondents’ responses to the assertion that
a budget is essentially a forecast, rather than a true commitment. From their
responses, 18% strongly agreed, 46% agreed, 24% were neutral and 12%
disagreed.
TABLE 4.14: Proper planning in the budget preparation process affects organizational
performance positively.
216 | Page
CAMEROON
Valid Cumulativ
Frequency Percent
Percent e Percent
AGREE 24 48.0 48.0 86.0
NEUTRAL 4 8.0 8.0 94.0
Vali
DISAGREE 2 4.0 4.0 98.0
d
STRONGLY
1 2.0 2.0 100.0
DISAGREE
Total 50 100.0 100.0
Table 21: Proper planning in the budget preparation process affects organizational performance
positively
Table 4.14 sought at analyzing the various responses of the population to the
assertion that proper planning in the budget preparation process affects
organizational performance positively. From the responses of the respondents,
217 | Page
CAMEROON
38% strongly agreed to this assertion, 48% agreed, 8% were neutral, 4%

disagreed and 2% strongly disagreed.
TABLE 4.15: Budget policy makers take into consideration the opinions of line
managers in the formulation of budgets
Valid Cumulativ
Frequency Percent
Percent e Percent
AGREE 15 30.0 30.0 52.0
NEUTRAL 14 28.0 28.0 80.0
Vali
DISAGREE 5 10.0 10.0 90.0
d
STRONGLY
5 10.0 10.0 100.0
DISAGREE
Total 50 100.0 100.0
Table 22: Budget policy makers take into consideration the opinions of line managers in the
formulation of budgets
218 | Page
CAMEROON
From the above table, respondents were asked to give their opinions on the
assertion that budget policy makers take into consideration the opinions of line
managers in the formulation of budgets. 22% of the population strongly agreed,
30% agreed, 28% was neutral, 10% disagreed and another 10% strongly opposed
the assertion.
TABLE 4.16: Budgets that were properly planned for tend to experience less price and
quantity variances, hence making it possible for the organization to achieve its forecasted
financial goals on its activities.
219 | Page
CAMEROON
Valid Cumulativ
Frequency Percent
Percent e Percent
AGREE 17 34.0 34.0 56.0
NEUTRAL 9 18.0 18.0 74.0
Vali
DISAGREE 11 22.0 22.0 96.0
d
STRONGLY
2 4.0 4.0 100.0
DISAGREE
Total 50 100.0 100.0
Table 23: Budgets that were properly planned for tend to experience less price and quantity
variances, hence making it possible for the organization to achieve its forecasted financial goals on
its activities
220 | Page
CAMEROON
Table 4.16 analyzes the opinions of the respondents on the assertion that budgets
that were properly planned for tend to experience less price and quantity
variances, hence making it possible for the organization to achieve its forecasted
financial goals on its activities. 22% of the population had strong affirming
opinions to this assertion, 34% agreed, 18% was neutral, 22% disagreed and 4%
strongly opposed.
TABLE 4.17: I am highly motivated to draw up budgets for my department.
Valid Cumulativ
Frequency Percent
Percent e Percent
AGREE 19 38.0 38.0 50.0
NEUTRAL 12 24.0 24.0 74.0
Vali
DISAGREE 11 22.0 22.0 96.0
d
STRONGLY
2 4.0 4.0 100.0
DISAGREE
Total 50 100.0 100.0
Table 24: I am highly motivated to draw up budgets for my department
221 | Page
CAMEROON
From the above table, 12% of the respondents strongly agreed that they were
highly motivated to draw up budgets for their departments, 38% agreed, 24%
were neutral, 22% disagreed and 4% strongly disagreed to being highly motivated
about drawing up budgets for their departments.
TABLE 4.18: The non-involvement of middle- and first-line managers in the

formulation of budgets.
Directors and top-level management do not involve middle- and first-line managers in
the formulation of budgets relating to their activities in the organization.
Valid Cumulative
Frequency Percent
Percent Percent
Valid STRONGLY AGREE 8 16.0 16.0 16.0
222 | Page
CAMEROON
AGREE 18 36.0 36.0 52.0

NEUTRAL 16 32.0 32.0 84.0
DISAGREE 6 12.0 12.0 96.0
STRONGLY
2 4.0 4.0 100.0
DISAGREE
Total 50 100.0 100.0
Table 25: The non-involvement of the middle- and first-line managers in the formulation of budgets.
Table 4.18 sought to get the respondents opinions on the assertion that directors
that top-level management do not involve middle- and first-line managers in the
formulation of budgets relating to their activities in the organization. 16% of the
population strongly affirmed, 26% agreed, 32% were neutral, 12% disagreed and
4% disagreed.
223 | Page
CAMEROON
TABLE 4.19: Integration in the budgetary preparation process gives managers a sense
of motivation and organizational commitment in the organization.
Valid Cumulative
Frequency Percent
Percent Percent
STRONGLY
11 22.0 22.0 22.0
AGREE
AGREE 24 48.0 48.0 70.0
Valid
NEUTRAL 11 22.0 22.0 92.0
DISAGREE 4 8.0 8.0 100.0
Total 50 100.0 100.0
Table 26: Integration in the budgetary preparation process gives managers a sense of motivation and
organizational commitment in the organization
224 | Page
CAMEROON
From table 4.19, respondents were questioned on whether integration in the

budgetary preparation process gives managers a sense of motivation and
organizational commitment in the organization. 22% strongly agreed to this
assertion, 48% agreed, 22% were neutral and 8% disagreed.
TABLE 4.20: Budget review
Who reviews each budget?

Valid Cumulative
Frequency Percent
Percent Percent
Vali SENIOR LEVEL 33 66.0 66.0 66.0
d JUNIOR LEVEL 7 14.0 14.0 80.0
225 | Page
CAMEROON
NON-STAFF
6 12.0 12.0 92.0
MEMBER
NOT APPLICABLE 4 8.0 8.0 100.0
Total 50 100.0 100.0
Table 27: Budget review
Table 4.20 sought to understand the respondents answers to the question of who
reviews each budget in their organizations. 66% of the respondents stated that
senior level reviews budgets, 14% stated that junior level does, 12% stated that
226 | Page
CAMEROON
non-staff members review budgets and 8% stated that budget reviews are not
applicable at their organizations.
TABLE 4.21: How often is information sent to budget holders?
Valid Cumulative
Frequency Percent
Percent Percent
MONTHLY 17 34.0 34.0 34.0
QUATERLY 17 34.0 34.0 68.0
ANNUALLY 10 20.0 20.0 88.0
Valid
NOT
6 12.0 12.0 100.0
APPLICABLE
Total 50 100.0 100.0
Table 28: How often is information sent to budget holders?
227 | Page
CAMEROON
From table 4.21, the population was asked how often is information sent to budget
holders. 34% of the population said information is sent on a monthly basis.
Another 34% stated that information is sent on a quarterly basis. 20% were of the
opinion that information is sent on an annual basis and 12% noted that
information being sent to budget holders in their organizations was not applicable.
TABLE 4.22: Integration in the budgetary preparation process increases non-financial

performance in the organization.
228 | Page
CAMEROON
Valid Cumulative
Frequency Percent
Percent Percent
STRONGLY
11 22.0 22.0 22.0
AGREE
AGREE 24 48.0 48.0 70.0
Valid
NEUTRAL 11 22.0 22.0 92.0
DISAGREE 4 8.0 8.0 100.0
Total 50 100.0 100.0
Table 29: Integration in the budgetary preparation process increases non-financial performance in
the organization
229 | Page
CAMEROON
Table 4.22 aimed at analyzing the respondent’s responses to the assertion that
integration in the budgetary preparation process increases non-financial
performance in the organization. 22% of the population strongly agreed, 48%
agreed, 22% were neutral and 8% disagreed.
TABLE 4.23: I am required to submit control reports that explain in detail budget
variances on a line-by-line basis.
Valid Cumulativ
Frequency Percent
Percent e Percent
AGREE 23 46.0 46.0 72.0
NEUTRAL 10 20.0 20.0 92.0
Vali
DISAGREE 3 6.0 6.0 98.0
d
STRONGLY
1 2.0 2.0 100.0
DISAGREE
Total 50 100.0 100.0
Table 30: I am required to submit control reports that explain in detail budget variances on a line-by-
line basis
230 | Page
CAMEROON
In table 4.23, respondents were tasked with the obligation of saying whether they
are required to submit control reports that explain in detail budget variances on a
line-by-line basis. 26% of the population were of the strong opinion that they
were under such requirements. 46% agreed, 20% was neutral, 6% disagreed and
2% strongly opposed.
TABLE 4.24: From the comments made by my supervisors, I know that they investigate
my budget in every detail.
231 | Page
CAMEROON
Valid Cumulative
Frequency Percent
Percent Percent
STRONGLY
6 12.0 12.0 12.0
AGREE
AGREE 28 56.0 56.0 68.0
Valid
NEUTRAL 11 22.0 22.0 90.0
DISAGREE 5 10.0 10.0 100.0
Total 50 100.0 100.0
Table 31: From the comments made by my supervisors, I know that they investigate my budget in
every detail
232 | Page
CAMEROON
In table 4.24, respondents were asked to give an opinion as to whether they know
that every detail of their budget is investigated, from the comments made by their
supervisors. 12% had strong affirmative opinions, 56% confirmed, 22% were
neutral and 10% of the population disagreed.
TABLE 4.25: My superiors do not care very much about interim budget deviations.
Valid Cumulativ
Frequency Percent
Percent e Percent
AGREE 23 46.0 46.0 72.0
NEUTRAL 10 20.0 20.0 92.0
Vali
DISAGREE 3 6.0 6.0 98.0
d
STRONGLY
1 2.0 2.0 100.0
DISAGREE
Total 50 100.0 100.0
Table 32: My superiors do not care very much about interim budget deviations
233 | Page
CAMEROON
From the above table, it can be seen that 26% of the population strongly agreed
that their superiors do not care very much about interim budget deviations. 46%
agreed 20% were neutral, 6% disagreed and 2% strongly disagreed.
TABLE 4.26: Budget matters are discussed regularly with my superior even if there are
no negative budget deviations to report.
Valid Cumulativ
Frequency Percent
Percent e Percent
Vali STRONGLY AGREE 14 28.0 28.0 28.0
234 | Page
CAMEROON
AGREE 22 44.0 44.0 72.0

NEUTRAL 9 18.0 18.0 90.0
DISAGREE 4 8.0 8.0 98.0
d
STRONGLY
1 2.0 2.0 100.0
DISAGREE
Total 50 100.0 100.0
Table 33: Budget matters are discussed regularly with my superior even if there are no negative
budget deviations to report
From table 4.26, which stated that budget matters are discussed regularly with
superiors even if there are no negative budget deviations to report, 28% of the
respondents strongly confirmed this statement, 44% agreed to it, 18% were
neutral, 8% disagreed and 2% strongly disagreed.
235 | Page
CAMEROON
TABLE 4.27:
When problems occur, I discuss budget matters with my superior without being asked
to.
Valid Cumulativ
Frequency Percent
Percent e Percent
AGREE 15 30.0 30.0 46.0
NEUTRAL 10 20.0 20.0 66.0
Vali
DISAGREE 10 20.0 20.0 86.0
d
STRONGLY
7 14.0 14.0 100.0
DISAGREE
Total 50 100.0 100.0
Table 34: When problems occur, I discuss budget matters with my superior without being asked to
236 | Page
CAMEROON
The above table sought to analyze the opinions of the respondents in relation to
the statement that when problems occur, they discuss budget matters with their
superiors without being asked to. 16% of the population strongly agreed, 30%
agreed, 20% were neutral, another 20% was neutral and 14% strongly disagreed.
TABLE 4.28: Tight budgetary control negatively affects managerial behavior.
Valid Cumulativ
Frequency Percent
Percent e Percent
237 | Page
CAMEROON
AGREE 19 38.0 38.0 48.0

NEUTRAL 17 34.0 34.0 82.0
DISAGREE 7 14.0 14.0 96.0
d
STRONGLY
2 4.0 4.0 100.0
DISAGREE
Total 50 100.0 100.0
Table 35: Tight budgetary control negatively affects managerial behavior
The above table aimed that understanding the effect of tight budgetary control on
managerial behavior. 10% of the population strongly agreed that tight budgetary
control negatively affects managerial behavior, 38% agreed, 34% was neutral,
14% disagreed and 4% had strong opposing opinions.
238 | Page
CAMEROON
TABLE 4.29: Imposing methods(policies) of reaching budget performance influence

managerial behavior positively.
Valid Cumulativ
Frequency Percent
Percent e Percent
AGREE 5 10.0 10.0 14.0
NEUTRAL 13 26.0 26.0 40.0
Vali
DISAGREE 21 42.0 42.0 82.0
d
STRONGLY
9 18.0 18.0 100.0
DISAGREE
Total 50 100.0 100.0
Table 36: Imposing methods of reaching budget performance influence managerial behavior
positvity
239 | Page
CAMEROON
F
rom table 4.29, respondents were asked to give their opinions on the assertion that
imposing methods(policies) of reaching budget performance influences
managerial behavior positively. 4% of the population strongly agreed, 10%
agreed, 26% was neutral, 42% disagreed and 18% strongly disagreed.
TABLE 4.30: I often feel worried to meet deadlines and manage the workload from my
supervisors because of the budgetary control system put in place.
Valid Cumulativ
Frequency Percent
Percent e Percent
240 | Page
CAMEROON

AGREE 19 38.0 38.0 48.0
NEUTRAL 13 26.0 26.0 74.0
Vali
DISAGREE 9 18.0 18.0 92.0
d
STRONGLY
4 8.0 8.0 100.0
DISAGREE
Total 50 100.0 100.0
Table 37: I often feel worried to meet deadlines and manage the workload from my supervisors
because of the budgetary control system put in place
From the above table, respondents were asked to say how often they feel worried
about meeting deadlines, and manage the workload from their supervisors
because of the budgetary control system put in place. 10% of the population
241 | Page
CAMEROON
strongly agreed, 38% agreed, 26% was neutral, 18% disagreed and 8% strongly
disagreed.
TABLE 4.31: When it comes to budgeting, I am willing to put in a great deal of effort
than normally expected in order to help the organization be successful.
Valid Cumulativ
Frequency Percent
Percent e Percent
AGREE 24 48.0 48.0 64.0
NEUTRAL 11 22.0 22.0 86.0
Vali
DISAGREE 5 10.0 10.0 96.0
d
STRONGLY
2 4.0 4.0 100.0
DISAGREE
Total 50 100.0 100.0
Table 38: When it comes to budgeting, I am willing to put in a great deal of effort than normally
expected in order to help the organization be successful
242 | Page
CAMEROON
In table 4.31, the researcher is seeking to understand the opinions of the

respondents in relation to the assertion that when it comes to budgeting, they are
willing to put in a great deal of effort than normally expected in order to help the
organization be successful. 16% of the respondents strongly agreed, 48% agreed,
22% were neutral, 10% disagreed and 4% strongly disagreed.
TABLE 4.32: I am required to prepare interim reports (e.g. monthly, quarterly) which
compare the results to date with the budgets.
Valid Cumulativ
Frequency Percent
Percent e Percent
243 | Page
CAMEROON

AGREE 25 50.0 50.0 56.0
NEUTRAL 13 26.0 26.0 82.0
Vali
DISAGREE 5 10.0 10.0 92.0
d
STRONGLY
4 8.0 8.0 100.0
DISAGREE
Total 50 100.0 100.0
Table 39: I am required to prepare interim reports (e.g. monthly, quarterly) which compare the
results to date with the budgets
From table 4.32, respondents were asked to give an opinion as to whether they are
required to prepare interim reports which compare the results to date with the
244 | Page
CAMEROON
budgets. 6% of the respondents strongly confirmed this, 50% agreed to it, 26%
were neutral,10% disagreed and 8% strongly disagreed.
TABLE 4.33: Changes in the budget are difficult to get approved by the superior.
Valid Cumulativ
Frequency Percent
Percent e Percent
AGREE 24 48.0 48.0 72.0
NEUTRAL 9 18.0 18.0 90.0
Vali
DISAGREE 3 6.0 6.0 96.0
d
STRONGLY
2 4.0 4.0 100.0
DISAGREE
Total 50 100.0 100.0
Table 40: Changes in the budget are difficult to get approved by the superior
245 | Page
CAMEROON
In table 4.33, respondents were asked to give a review on whether changes in the
budget are difficult to get approved by their superiors. 24% of the respondents
strongly confirmed this, 48% confirmed, 18% was neutral, 6% disagreed and 4%
strongly disagreed.
TABLE 4.34: Not achieving my budget has a strong impact on how my performance is
rated to my supervisor.
Valid Cumulativ
Frequency Percent
Percent e Percent
246 | Page
CAMEROON

AGREE 19 38.0 38.0 44.0
NEUTRAL 9 18.0 18.0 62.0
Vali
DISAGREE 16 32.0 32.0 94.0
d
STRONGLY
3 6.0 6.0 100.0
DISAGREE
Total 50 100.0 100.0
Table 41: Not achieving my budget has a strong impact on how my performance is rated to my
supervisor
Table 4.34 aimed at understand whether the respondents not achieving their
budget has a strong impact on how their performance is rated by their supervisors.
6% of the respondents strongly agreed, 38% agreed, 18% was neutral, 32%
247 | Page
CAMEROON
TABLE 4.35: Directors conduct regular checks to ensure that budget objectives are
being met.
Valid Cumulativ
Frequency Percent
Percent e Percent
AGREE 12 24.0 24.0 36.0
NEUTRAL 15 30.0 30.0 66.0
Vali
DISAGREE 12 24.0 24.0 90.0
d
STRONGLY
5 10.0 10.0 100.0
DISAGREE
Total 50 100.0 100.0
Table 42: Directors conduct regular checks to ensure that budget objectives are being met
248 | Page
CAMEROON
In table 4.35, respondents were prompted to give an opinion as to whether

directors conduct regular checks to ensure that budget objectives are being met.
12% of the respondents strongly agreed, 24% agreed, 30% were neutral, 24%
TABLE 4.36: Planning during the budgeting process significantly affects the non-
financial performance of an organization.
249 | Page
CAMEROON
Perce Valid Cumulative

Frequency
nt Percent Percent
AGREE 19 38.0 38.0 76.0
NEUTRAL 7 14.0 14.0 90.0
Vali
DISAGREE 4 8.0 8.0 98.0
d
STRONGLY
1 2.0 2.0 100.0
DISAGREE
Total 50 100.0 100.0
Table 43: Planning during the budgeting process significantly affects the non-financial performance
of an organization

planning during the budgeting process significantly affects the non-financial
250 | Page
CAMEROON
performance of an organization.38% of the respondents strongly agreed, 38%

agreed, 14% were neutral, 8% disagreed and 2% strongly disagreed.
TABLE 4.37: Coordination of budgets have a positive relationship with the non-
Frequenc Valid Cumulative

Percent
y Percent Percent
AGREE 22 44.0 44.0 60.0
NEUTRAL 8 16.0 16.0 76.0
Vali
DISAGREE 10 20.0 20.0 96.0
d
STRONGLY
2 4.0 4.0 100.0
DISAGREE
Total 50 100.0 100.0
Table 44: Coordination of budgets have a positive relationship with the non-financial performance of
an organization
251 | Page
CAMEROON

coordination of budgets have a positive relationship with the non-financial
performance of an organization. 16% of the respondents strongly agreed, 44%
agreed, 16% were neutral,20% disagreed and 4% strongly disagreed.
TABLE 4.38: Control and Evaluation significantly affect the non-financial performance
of an organization.

Percent
y Percent Percent
252 | Page
CAMEROON

AGREE 18 36.0 36.0 76.0
NEUTRAL 4 8.0 8.0 84.0
Vali
DISAGREE 7 14.0 14.0 98.0
d
STRONGLY
1 2.0 2.0 100.0
DISAGREE
Total 50 100.0 100.0
Table 45: Control and Evaluation significantly affect the non-financial performance of an
organization.
In table 4.38, respondents were prompted to give an opinion as to whether control

and evaluation have a positive relationship with the non-financial performance of
253 | Page
CAMEROON
an organization. 40% of the respondents strongly agreed, 36% agreed, 8% were

TABLE 4.39: Tight budgetary control has a positive relationship with the non-financial

Percent
y Percent Percent
AGREE 22 44.0 44.0 66.0
NEUTRAL 3 6.0 6.0 72.0
Vali
DISAGREE 3 6.0 6.0 78.0
d
STRONGLY
11 22.0 22.0 100.0
DISAGREE
Total 50 100.0 100.0
Table 46: Tight budgetary control has a positive relationship with the non-financial performance of
an organization
254 | Page
CAMEROON
In table 4.39, respondents were prompted to give an opinion as to whether tight

budgetary control has a positive relationship with the non-financial performance
of an organization. 22% of the respondents strongly agreed, 44% agreed, 6% were
neutral,6% disagreed and 22% strongly disagreed.
TABLE 4.40: Tight budgetary control has a negative relationship on the non-financial
performance of an enterprise.

Percent
y Percent Percent
255 | Page
CAMEROON
AGREE 9 18.0 18.0 26.0

NEUTRAL 5 10.0 10.0 36.0
DISAGREE 21 42.0 42.0 78.0
d
STRONGLY
11 22.0 22.0 100.0
DISAGREE
Total 50 100.0 100.0
Table 47: Tight budgetary control has a negative relationship on the non-financial performance of
an enterprise
In table 4.40, respondents were prompted to give an opinion as to whether tight

budgetary control has a negative relationship with the non-financial performance
256 | Page
CAMEROON
of an organization. 8% of the respondents strongly agreed, 18% agreed, 10% were

4.2 VERIFICATION OF HYPOTHESES.

All HYPOTHESES ARE STATED IN THE ALTERNATIVE FORM

Descriptive statistics of Tight Budgetary Control (Planning, Coordination,

Control and Evaluation) on non-financial performance.
Hypothesis 1
Table 48: Planning is expected to correlate positively with non-financial performance
Correlations
Non-financial
Planning
performance
Pearson
1 .982**
Correlation
Planning
Sig. (2-tailed) .000
N 50 50
257 | Page
CAMEROON
Pearson
.982** 1
Non-financial Correlation
performance Sig. (2-tailed) .000
N 50 50
**. Correlation is significant at the 0.01 level (2-tailed).
Interpreting using the Pearson Product –Moment Correlation Index (rxy)
In putting the researcher’s hypothesis about the relationship between planning
non-financial performance to the test,
- rxy (non-financial performance) = 0.982

- A correlation coefficient of 0.982 demonstrates that there is a very
substantial positive relationship between planning, and non-financial
performance. N = number of cases
N =50
Calculated level of significance = 0.01

Pre-determined level of significance = .05 or (research level of significance)
A calculated significance .000 is less than (<) the research level of
significance .05. This means that there is a significant correlation between
planning and non-financial performance. Therefore, planning has a significant
relationship with the non- financial performance of an organization. Planning
affects organizational performance in that, planning establishes objectives, and
decisions about courses of action to be taken to ensure that the organisational
goals and objectives are met with effectiveness and efficiency. This will in turn
affect the non-financial performance of an organization in terms of motivation,
job satisfaction, stress and organisational commitment and others.
258 | Page
CAMEROON
Hypothesis 2

Table 49: Coordination is expected to have a statistically significant effect on non-financial

performance
Correlations
Non-financial
Coordiantion
performance
Pearson
1 .827**
Correlation
Coordiantion
N 50 50
Pearson
.827** 1
Non-financial Correlation
performance Sig. (2-tailed) .000
N 50 50

In verifying the researcher’s hypothesis, the correlation found between
coordination and non-financial performance was;
259 | Page
CAMEROON
The correlation coefficient of 0.827 illustrates that there exists a strong positive
correlation between coordination and financial performance.
N = number of cases
N = 50
Calculated level of significance = 0.001

Pre-determined level of significance = .05 or (research level of
significance)
The calculated significance .000 is less than (<) the research level of
significance .05. This means that there is a significant correlation between
coordination and non-financial performance. Coordination is the function of
management which ensures that different departments and groups work in sync.
Therefore, there is unity of action among the employees, groups and departments.
Proper coordination of work processes, staff and activities will definitely have a
positive effect on the performance of organizations.
Hypothesis 3
Table 50: Control and evaluation are expected to have a statistically significant effect on non-
financial performance
Correlations
260 | Page
CAMEROON
Control and Non-financial

Evaluation performance
Pearson
1 .957**
Control and Correlation
Evaluation Sig. (2-tailed) .000
N 50 50
Non-financial Pearson
.957** 1
performance Correlation
N 50 50

In putting the researcher’s hypothesis about the relationship between control
and evaluation, and financial and non-financial performance to the test,

-
A Correlation coefficient of 0.957 shows that there exists a strong positive
correlation between control and evaluation, and financial performance.
N = number of cases
261 | Page
CAMEROON
N = 50
Calculated level of significance = .000

Pre-determined level of significance = .05 or (research level of
significance)
Therefore, the calculated significance .000 is less than (<) the research level of
significance .05
There is a significant correlation between Control and evaluation and non-

financial organizational performance. Control and evaluation are crucial
because they aid in the detection of faults and the implementation of corrective
action, hence reducing deviation from norms. Strategic control and evaluation
involve setting standards, measuring performance, comparing performance to
standards, determining the reasons for deviation and taking corrective action if
needed. The proper implementation of control and evaluation mechanisms will
positively affect organizational performance.
Correlations
Tight budgetary Non-financial
control. performance
Tight budgetary Pearson
control has a Correlatio 1 .922**
positive n
relationship with Sig. (2- .000
the non-financial tailed)
262 | Page
CAMEROON
N 50 50
performance of an
organization. Pearson .922** 1
Correlatio
Non-financial n
performance Sig. (2-
.000
tailed)
N 50 50
From the above analysis, it can be concluded that tight budgetary control has a
significant relationship with non-financial organizational performance.
CHAPTER FIVE
SUMMARY OF FINDINGS, PROBLEMS, RECOMMENDATIONS AND

CONCLUSIONS
5.1 INTODUCTION
This chapter focuses on the summary of the major conclusion based on the figures
and findings from chapter four, recommendations and conclusions of the study
based on the objectives previously stated in chapter 1. This study has as main
263 | Page
CAMEROON
objective to evaluate the effect of tight budgetary control on organizational

performance.
5.2 SUMMARY OF THE FINDINGS
The overall objective was to evaluate the effects of budgetary control on

organizational performance. Based on the research titled TIGHT BUDGETARY
CONTROL AND ORGANIZATIONAL PERFORMANCE, the findings showed
that planning, coordination and control affect organizational performance, and can
either have a positive or negative effect on organizational performance depending
on how they are implemented.
For the analysis, data from 50 staff (top level and middle level and first line
managers) from several organizations were collected. The respondents were asked
questions about the applied budgetary control system applied in their organization
and the effects of planning, coordination, and control on their financial and non-
The result of the analysis indicated that the majority of the respondents when they
were asked whether they experience the applied organizational budgetary control
system as tight or not, 80% of the participants indicated that they experience a
TBC system at their organization. This result was mainly reflected as the study
measured whether they indeed experience a favorable budgetary control system in
accordance with budgetary control measures, which were identified by van der
Stede (2001). Just 20% of the population disagreed to experiencing the budgetary
control system as a result of the policies put in place.
264 | Page
CAMEROON
〉 Considering the result of planning, on financial performance, the outcome

indicates that the alternative hypothesis should be accepted. Hence, it can
be concluded that tight budgetary control significantly affects
organizational performance.
〉 Considering the outcome of the effect of budgetary control on
organizational commitment it can be concluded that there is a negative
relationship between tight budgetary control and employee stress as well as
organizational commitment of managers. This means that managers that
experience tight budgetary control are less committed to their organization
than managers that do not experience tight budgetary control.
5.3 PROBLEMS ENCOUNTERED AND PROPOSED SOLUTIONS.
The following are some of the major problems encountered in the course my
internship at Ntarinkon Cooperative Credit Union, Ekounou Yaoundé;
〉 The inaccessibility to some major documents like the institution’s financial

statements, and past budgets, which would have been of great help to the
researcher in carrying out this study.
〉 Poor communication between some employees and interns.
Communication was not cordial between some employees and interns.
Some workers were too busy and had no time to answer questions posed by
the interns. This was a problem as less knowledge was acquired. As a
solution to this problem, departments that are assigned interns should make
it their duty to answer questions that may be posed by these interns.
265 | Page
CAMEROON
5.4 CONCLUSION
Tight budgetary control plays a pivotal role in the success of any organization,
providing a solid foundation for planning, management, monitoring and control of
financial operations. Organizations that implement budgetary control have a
definite advantage in terms of achieving their strategic objectives and financial
targets. Effective budgetary control requires careful planning, implementation,
monitoring, and control, along with accountability and responsibility at all levels
of the organization. Overall, it is an essential tool that should be incorporated into
the management framework of any organization that wants to succeed in the long
run.
5.5 RECOMMENDATIONS
In order that actual performance matches standards, the management of Ntarinkon

Cooperative Credit union, Ekounou- Yaoundé, should take the following
recommendations into consideration;
〉 Firstly, top level management should ensure that the budgets set are
specific, measurable, attainable, realistic, and time bound (SMART).
This will go a long way to ensure the efficiency and effectiveness of the
budgets.
〉 Also, the environment (both natural and business) is complex and
constantly changing. Therefore, managers should carry out proper
research and forecast so that, they can meet up with the current
complexities and changes that may occur in the course of the period.
266 | Page
CAMEROON
〉 Top level managers should involve lower-level managers and

departmental heads in the budget preparation process. This goes a long
way to motivate them, and also let them make certain decisions
especially since they have expertise knowledge in their specific fields.
〉 Managers should constantly control the budgets set, so that they may
correct any deviations that may occur, and take corrective measures in
time, so that objectives of the organization are achieved with efficiency
and effectiveness.
〉 Managers should effectively control the budgets of the organization to
look for ways to improve them and isolate errors.
〉 Managers should use effective budget preparation techniques so that
proper budgets are made.
267 | Page
CAMEROON
APPENDICES
QUESTIONNAIRE
TIGHT BUDGETARY CONTROL AND NON-FINANCIAL

PERFORMANCE: CASE OF SMALL AND MEDIUM SIZE
ENTERPRISES IN YAOUNDE V, CAMEROON.
Dear Participant,
The researcher would highly appreciate if you participate in a short survey that
will assist her in completing her Master Thesis.
The purpose of this study is to examine the relationship between tight budgetary
control and the non-financial performance of an organization. In this case, the
researcher is especially interested on which effect tight budgetary control has on
non-financial performance, in terms of managerial performance, satisfaction,
organisational commitment, motivation and how it influences perceived stress
levels of staff in charge of budget formulations and disbursement of cash for
budget implementation.
All answers will be treated anonymously and confidentially and are only used for
the purpose of this mater’s theses.
Thank you very much for you collaboration.
PART 1: ORGANISATIONAL POSITION
1) In which sector do you work in?

o Marketing And Sales
o Finance
i | Page
CAMEROON
o Health And Social Care

o Education And Labor Market
o Growth And Community Development
o Others
2) Do you experience the budget control system at your organization as a tight
control system?
o Yes
o No
3) Position occupied in the organization
o Top level
o Middle level
o First line level
PART 2: PLANNING AND NON-FINANCIAL PERFORMANCE
This part of the questionnaire seeks to identify the effects of planning on

financial and non-financial performance in your institution.
4) Do you experience the budget control system at your organization as a

result of policies put in place?
o Yes
o No
5) Are you aware of the budgets prepared by your organization?
o Yes
o No
o Not applicable
6) Are you aware of the budgeting process taking place in your organization?
ii | Page
CAMEROON
o Yes
o No
o Not applicable
7) How often are budget meetings conducted by the board?
o Frequently
o Rarely
o Not applicable
8) Are financial targets set up in the meetings?
o Yes
o No
o Not applicable
9) Are budgetary responsibilities established for different sections during the
meetings?
o Yes
o No
o Not applicable
10) Are staff aware of their responsibilities in each section?
o Yes
o No
o Not applicable
Please rank the following questions on a scale of 1-5
11) Each department takes part in the planning process by participating in the
determination of appropriate goals and objectives concerning their
activities.
iii | Page
CAMEROON
o Strongly Agree
o Agree
o Neutral
o Disagree
o Strongly disagree
12) In the planning process, budget administrators are solely responsible for
making policies to ensure that the budget is respected.
o Strongly Agree
o Agree
o Neutral
o Disagree
o Strongly disagree
13) A budget is essentially a forecast rather than a true commitment.
o Strongly Agree
o Agree
o Neutral
o Disagree
o Strongly disagree
14) Proper planning in the budget preparation process affects organisational
performance positively.
o Strongly agree
o Agree
o Neutral
o Disagree
iv | Page
CAMEROON
o Strongly disagree
15) Budget policy makers take into consideration the opinions of line
managers in the formulation of budgets
o Strongly agree
o Agree
o Neutral
o Disagree
o Strongly disagree
16) Budgets that were properly planned for tend to experience less price and
quantity variances, hence making it possible for the organization to
achieve its forecasted financial goals on its activities.
o Strongly agree
o Agree
o Neutral
o Disagree
o Strongly disagree
PART 3: COORDINATION AND NON-FINANCIAL PERFORMANCE
17) I am highly motivated to draw up budgets for my department.

o Strongly agree
o Agree
o Neutral
o Disagree
o Strongly disagree
v | Page
CAMEROON
18) Directors and top-level management do not involve middle- and first-line
managers in the formulation of budgets relating to their activities in the
organization.
o Strongly agree
o Agree
o Neutral
o Disagree
o Strongly disagree
19) Integration in the budgetary preparation process gives managers a sense
of motivation and organsiational commitment in the organization.
o Strongly agree
o Agree
o Neutral
o Disagree
o Strongly disagree
20) Who reviews each budget?
o A member of staff at the senior level
o A member of staff at the junior level
o A non-staff member
o Not applicable
21) How often is information sent to budget holders?
o Monthly
o Quarterly
o Annually
vi | Page
CAMEROON
o Not applicable
22) Integration in the budgetary preparation process increases non-financial

o Strongly agree
o Agree
o Neutral
o Disagree
o Strongly disagree
PART 4: CONTROL AND EVALUATION AND NON-FINANCIAL

PERFORMANCE.
23) I am required to submit control reports that explain in detail budget

variances on a line-by-line basis.
o Strongly agree
o Agree
o Neutral
o Disagree
o Strongly disagree
24) From the comments made by my supervisors, I know that they
investigate my budget in very detail.
o Strongly agree
o Agree
o Neutral
o Disagree
vii | Page
CAMEROON
o Strongly disagree
25) My superiors do not care very much about interim budget deviations.
o Strongly agree
o Agree
o Neutral
o Disagree
o Strongly disagree
26) Budget matters are discussed regularly with my superior even if there are
no negative budget deviations to report.
o Strongly agree
o Agree
o Neutral
o Disagree
o Strongly disagree
27) When problems occur, I discuss budget matters with my superior without
being asked to.
o Strongly agree
o Agree
o Neutral
o Disagree
o Strongly disagree
28) Tight budgetary control negatively affects managerial behavior.
o Strongly agree
o Agree
viii | Page
CAMEROON
o Neutral
o Disagree
o Strongly disagree
29) Imposing methods(policies) of reaching budget performance influences
managerial behavior positively.
o Strongly agree
o Agree
o Neutral
o Disagree
o Strongly disagree
30) I often feel worried to meet deadlines and manage the workload from my
supervisors because of the budgetary control system put in place.
o Strongly agree
o Agree
o Neutral
o Disagree
o Strongly disagree
31) When it comes to budgeting, I am willing to put in a great deal of effort
than normally expected in order to help the organization be successful.
o Strongly agree
o Agree
o Neutral
o Disagree
o Strongly disagree
ix | Page
CAMEROON
32) I am required to prepare interim reports (e.g., monthly, quarterly) which

compare the results to date with the budgets.
o Strongly agree
o Agree
o Neutral
o Disagree
o Strongly disagree
33) Changes in the budget are difficult to get approved by the superior.
o Strongly agree
o Agree
o Neutral
o Disagree
o Strongly disagree
34) Not achieving my budget has a strong impact on how my performance is
rated to my supervisor.
o Strongly agree
o Agree
o Neutral
o Disagree
o Strongly disagree
35) Directors conduct regular checks to ensure that budget objectives are being
met.
o Strongly agree
x | Page
CAMEROON
o Agree
o Neutral
o Disagree
o Strongly disagree
PART 5: INDEPENDENT AND DEPENDENT VARIABLES
36) Planning during the budgeting process significantly affects the non-
o Strongly Agree
o Agree
o Neutral
o Disagree
o Strongly Disagree
37) Coordination of budgets have a positive relationship with the non-financial
o Strongly Agree
o Agree
o Neutral
o Disagree
o Strongly Disagree
38) Control and Evaluation significantly affect the non-financial performance
of an organization.
o Strongly Agree
o Agree
o Neutral
xi | Page
CAMEROON
o Disagree
o Strongly Disagree
39) Tight budgetary control has a positive relationship with the non-financial
o Strongly Agree
o Agree
o Neutral
o Disagree
o Strongly Disagree
40) Tight budgetary control has a negative relationship on the non-financial
performance of an enterprise.
o Strongly Agree
o Agree
o Neutral
o Disagree
o Strongly Disagree
xii | Page
CAMEROON
REFERENCES
(1979), O. (n.d.).
(2007), D. e. (n.d.).
1964, (., & 286). (n.d.).
Accountants, I. o. (1998). Financial Operations in a Developing Economy. I CAN News .
al., R. e. (2012).
Alsheiketh, A. (2011). Public Availability of Published Research Data. High Impact Journal.
Anthony and Govindarajan . (1998).
Argyris. (1953).
Brown, J. L., & Howard, L. R. (2002). Principles and Practice of Managerial Accountancy. London:
Macdonald and Evans Ltd.
Fabozzi, D. a. (n.d.). 2010.
Giliberti, B. &. (2008).
Hand, L. F. (1986). Budgeting in Business. Journal of Chattered Accountants, London 5.
Harper, W. M. (1999). Cost and Management Accounting (Volume 1 ed.). MacDonald and Evans lts
London.
Hildreth, W. B., & Zorn, C. (2005). The Evolution of the stateand local government municipal debt
market over the past quater century. Public Budgeting and Finance.
Koontz, O. D. (2003). MAnagement Theory . Mcgraw Hill International Book Company Ltd UK.
Luthan. (1998).
Onorah, N. B. (2005). Budgetin as a Management Tool. student accountant Journal, Vol 5 , Port
Harcourt Nigeria.
Owler, I. W., & Brown, J. L. (1999). Wheldon's Cost Accounting. London: Macdonald and Evans Ltd.
Pandey, I. M. (2002). Fundamentals of financial management. Villas publising house new dehli.
Peteraf , M., & Barney, J. (2003). Unravelling the resource based angle managerial and decision
economiics. International business journal.
xiii | Page
CAMEROON
Pogue, G. H. (1997). Budgeting as anAid to Management Performance. Chattered Association of

Certified Accountants.
Quattrone, M. &. (2010).
Ray, H. G. (1995). Managerial Accounting Concept of planning, control and decision making in
business.
Scott, J. A. (2000). Budgetary Control and Standard Cost. Fiman Publishing Corporations. USA.
Stede, V. D. (2001).
Tyales. (1998).
Ulrich , B. (2008). World at risch: The news task of critical theory development and society.
Walker, J. (2009). Budgetary Planning and Control Accounting in a Nutshell.
Wikipedia. (2016).
Campbell, P.J., Dunnette, M.D., Lawler, E.L., and Weick, K.F., (1970).
Managerial Behaviour, Performance and Effectiveness. McGraw Hill Book
Campany, New York.
Carol S. Steinhaus; James L. Perry (1996). Organizational Commitment: Does
Sector Matter? Public Productivity & Management Review, Vol. 19, No. 3., pp.
278-288.
Dahlan, M. et al. (2007). Thight Budgetary Control, Business Strategy, External
Environment and Firm Performance. Vol 6 (NO. 2), p.81-97.
http://myais.fsktm.um.edu.my/10640/1/
Pages_from_Vol._6_No._2_page_81_to_97.pdf [Accessed: 3rd April 2013].
Das, G. (1982). Defining Managerial Behaviour: Some Indicators. Indian Journal
of Industrial Relations, Vol. 17 ( No. 4).
Drake Peterson Pamela, and Fabozzi J. Frank (2010), The Basics of Finance: An
Introduction to Financial Markets, Business Finance, and Portfolio Management,
John Wiley and Sons Inc., Hoboken, New Jersey.
Einar & Torvald (2012). Working onboard – Job perception, organizational
commitment and job satisfaction in the cruise sector- Tourism Management
Volume 33, Issue 3, Pages 592–597.
xiv | Page
CAMEROON
Eker, M. (2006). The Impact of Budget Participation on Managerial Performance

via Organizational Commitment: A Study on the Top 500 Firms in Turkey.
Ankara Üniversitesi SBF Dergisi .
http://dergiler.ankara.edu.tr/dergiler/42/1345/15581.pdf
Emmanuel, C., Otley, D. and Merchant, A. (2004). Accounting for Management
Control. 2nd ed. London: Thompson Learning.
Ganster & Loghan (2005). An experimental evaluation of a control intervention to
alleviate job-related stress. Journal of Management. 31:90.
Garson, G. D. (2012). General Linear Models: Multivariate GLM &
MANOVA/MANCOVA. Asheboro, NC: Statistical Associates Publishers.
Gortner, H.,Mahler, J, &Nicholson, J. (1987). Organization theory:
Apublicperspective. Chicago: Dorsey. Harrison, W. & Horngren, C (2008).
Financial Accounting. 7th Edition. New Jersey: Pearson Prentice Hall.
Heavey, Halliday, Gilbert and Murphy (2011). Enhancing performance Bringing
trust, commitment and motivation together in organisations. The Braybrooke
Press Ltd. Journal of General Management. Vol. 36 No. 3 p 1-18.
Health and Safety Executive (2001). Help on Work-related Stress: A Short Guide.
INDG281 Rev1 2001.Sudbury: HSE Books.
Herzberg, F., Mausner, B., Peterson, R. O., & Capwell, D. F. (1957). Job
attitudes: Review of research and opinion. Pittsburgh, PA: Psychological Service
of Pittsburgh.
Hoppock, R. (1935). Job satisfaction. New York: Harper and Brothers. p 47.
Hoy, W. K., & Sousa, D. A. (1984). Delegation: The neglected aspect of
participation in decision making. Alberta Journal of Educational Research, 30,
p320-331.
Kanjia, Gopal K. and Parvesh, Choprab K. (2009). Psychosocial system for work
well-being: On measuring work stress by causal pathway. Total Quality
Management Vol. 20, No. 5, May 2009, 563–580.
Judge, T. A., Boudreau, J. W., & Bretz, R. D. (1994). Job and life attitudes of
male executives. Journal of Applied Psychology, 79, 767-782.
xv | Page
CAMEROON
Kahn, R. L., Wolfe, D. M., Quinn, R. P., Snoek, J. D., & Rosenthal, R. A. (1984).
Organizational stress: Studies in role conflict and ambiguity. New York: Wiley.
Larson, E. W., & Fukami, C. V. ( 1984). Relationships between worker behavior
and commitment to the organization and union. Paper presented at the annual
meeting of the Academy of Management, Boston.
Luthans, F. (1998). Organisational Behaviour. 8th ed. Boston: Irwin McGraw-
Hill.
Macintosh, N. & Quattrone, P. (2010). Management Accounting and Control
Systems: An Organizational and Sociological Approach. West Sussex: John
Wiley & Sons. p34-112.
Merchant, K. A., (1998). Modern Management Control Systems. Upper Saddle
River, Prentice Hall.
Merchant, K. (1985). Accounting, Organizations & Society. Management Journal
Review. Jan1985, Vol. 10 Issue 1, p67-85. 19p.
Meyer, John P. and Allen, Natalie J. (2004). TCM Employee Commitment Survey
Academic Users Guide. Department of Psychology The University of Western
Ontario P 116
xvi | Page

Mater's Dissertation, Nsonkwa Nehlie-Lois Asaba 2

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Mater's Dissertation, Nsonkwa Nehlie-Lois Asaba 2

Uploaded by

Copyright:

Available Formats

TOPIC:

TIGHT BUDGETARY CONTROL AND

I, NSONKWA NEHLIE-LOIS ASABA, hereby declare that the dissertation

NSONKWA NEHLIE-LOIS ASABA

SUPERVISED BY: Dr. Marinus Arrey Arrey

Special thanks to my dissertation supervisor, Dr. Marinus ARREY ARREY for

Special thanks to the Director of Studies of the program, Dr Mulema Veronica,

My immense gratitude to my lovely father Mr. MELI BLAISE NSONKWA for

CHAPTER ONE: INTRODUCTION AND PRESENTATION OF THE ENTERPRISE..............1

1.1 BACKGROUND OF THE STUDY.................................................................................1

1.2 PROBLEM STATEMENT...............................................................................................6

1.3 RESEARCH OBJECTIVES.............................................................................................8

1.4 RESEARCH QUESTION.................................................................................................8

1.5 RESEARCH HYPOTHESES...........................................................................................9

1.6 SIGNIFICANCE OF THE STUDY..................................................................................9

1.7 BACKGROUND OF THE ENTERPRISE.....................................................................10

CHAPTER TWO: LITERATURE REVIEW................................................................................18

2.1.1 DEFINITON OF BASIC TERMS...............................................................................18

2.1.2 MAIN CONCEPTS......................................................................................................22

2.1.3 INDEPENDENT AND DEPENDENT VARIABLES................................................28

2.1.4 DEPENDENT VARIABLE: NON-FINANCIAL PEROFRMANCE OF SMALL

2.1.5 ESSENTIALS OF A BUDGET.................................................................................148

2.1.6 CHARACTERISTICS OF BUDGETS..............................................................149

2.1.7 OBJECTIVES OF BUDGETING..............................................................................150

2.1.8 TYPES OF BUDGETS..............................................................................................152

2.1.9 BUDGET ADMINISTRATION, PERIODS AND BENEFITS................................157

2.1.10TECHNIQUES OF BUDGETARY CONTROL......................................................161

2.1.11 PURPOSE OF BUDGETS.......................................................................................163

2.1.12 ADVANTAGES AND DISADVANTAGES OF BUDGETING............................166

2.1.13 IMPORTANCE OF BUDGETS AND BUDGETARY CONTROL.......................168

2.1.14 MAKING BUDGETARY CONTROL EFFECTIVE..............................................170

2.1.15 STEPS IN PREPARING A BUDGET.....................................................................171

2.2 THEORETICAL FRAMEWORK.....................................................................................173

2.3 EMPERICAL REVIEW....................................................................................................178

CHAPTER THREE: RESEAECH METHODOLOGY AND INTERNSHIP ACTIVITIES......186

3.2 RESEARCH DESIGN.......................................................................................................187

3.3 METHOD OF COLLECTING DATA..............................................................................188

3.4 RESEARCH HYPOTHESES............................................................................................189

3.6 TYPES OF DATA.............................................................................................................191

3.7 TYPES OF RESEARCH...................................................................................................191

3.8 SAMPLING TECHNIQUES.............................................................................................192

3.9 DATA ANALYSIS............................................................................................................192

CHAPTER FOUR: DATA PRESENTATION, ANALYSIS AND INTERPRETATION OF

4.1 DATA ANALYSIS AND PRESENTATION OF RESULTS...........................................193

4.2 VERIFICATION OF HYPOTHESES...............................................................................252

5.2 SUMMARY OF THE FINDINGS................................................................................259

5.3 PROBLEMS ENCOUNTERED AND PROPOSED SOLUTIONS.............................260

Table 36: Imposing methods of reaching budget performance influence managerial

Table 49: Coordination is expected to have a statistically significant effect on non-

Figure 1: Organizational chart.................................................................................12

CHAPTER ONE: INTRODUCTION AND PRESENTATION OF THE

This chapter is made up of the background of the study, problem statement,

1.1 BACKGROUND OF THE STUDY

Budgeting is fundamental to every project. It is imperative because it is a means to

Budgeting is an integral part of planning and coordinating and is becoming

use of budgets in their day-to-day activities. The practice of budgetary control is

All of this is necessitated by the economic concept of “scarcity”. Though scarcity

Following the uncertainties prevailing in the economic environment today,

Budgetary control as a proven management tool helps the management of the

Organizations cannot achieve their strategic goals without proper budgetary

Budgetary control provides the organization with a mechanism to monitor and

Budgetary control is an effective tool for the evaluation of performance. It requires

Implementation of budgetary control requires careful planning and consideration.