Long-term (or Strategic) planning is usually for periods of five years or longer and is based on the objectives of the organization. Some plans may extend up to 20 years. Strategic planning is directional, rather than operational. This means it focuses on where we want to go instead of specifically how we are going to get there.
When a budget is easily achieved, it is said to have budgetary slack in it. When budgetary slack exists, either revenues are understated or expenses are overstated and this slack makes it difficult to properly evaluate performance.
A continuous budget, also called a rolling budget, is one that is prepared for a certain period of time ahead of the present. For example, a 1-year continuous budget will be prepared at the end of every month for the next 12 months.
Management by objectives is a management approach that increases the amount of self-direction that employees have. In MBO, a manager and his or her workers are responsible for agreeing upon their objectives and the methods to be used to obtain them.
|
