A Case Study of Z Corporation on Optimizing the Comprehensive Budget Management System
|School||Dongbei University of Finance|
|Keywords||Z Corporation Comprehensive budget management Group strategy The second level responsibility unit|
In the early1990s, Chinese enterprises were officially introduced comprehensive budget management system. In recent years, by means of the promotion of the government, Chinese enterprises have also been generally adopted budget management system and gained valuable experience. However, due to changes in the business environment and difficulties of budget implementation, especially in the face of trend in increasing degree of enterprise groups and enhancement of strategic uncertainty, not all implementation cases of comprehensive budget management system in enterprises are satisfactory. Most of applied research in the field still remains in the technical and theoretical level, such as budget preparation procedures, methods, etc., lacking in specific operating instructions for the business practices. Therefore, it’s quite necessary for us to study how to make theories and actual operating environment combined better in conglomerates, and to propose a more realistic comprehensive budget management program.We have grasped the overall situation and needs of budget management of Z Corporation, and summarily put forward improvements to solve the existing problems, which are the general requirements for design of optimization and implementation of the program. In the program, the Group’s strategic objective is the main line, quantitative indicators are the external manifestation, the comprehensive budget management is the core. Relying on Hyperion information platform, enterprise competitive environment analysis system, investment value analysis system, performance appraisal and other business management systems are integrated, which make strategy and business joined, and create a new model timely updated with the external environment changes(oil prices, exchange rates, etc.).Through the integrated use of standard research methods (historical and logical methods) and empirical research methods (case studies, on-site investigation), this study achieves the following innovations: Firstly, for application value, considered the detachment of budget and strategic objectives in most conglomerates, incompatible between budget and the group management and other issues, this paper puts forward a program, in which the Group’s strategic objective is the main line, quantitative indicators are the external manifestation, the comprehensive budget management is the core. Relying on Hyperion information platform, enterprise competitive environment analysis system, investment value analysis system, performance appraisal and other business management systems are integrated in the program, which makes strategy and business joined, and creates a new model timely updated with the external environment changes(oil prices, exchange rates, etc.).Secondly, through remodeling the internal environment, including the budgeting system, budget organization system, as well as organization and process reengineering, employment and salary system reforms before the implementation of budget management, the Z Company has laid a solid foundation of construction of comprehensive budget management system and further improvement.Thirdly, in order to remedy the past defects of the mechanism that the inaccurate predictions about external market environment changes resulted in the deviation of strategic goals and budget targets, which were difficult to update, this system achieves a innovation that it realizes the precise description and the sensitivity to the dynamic scene. Data of oil prices, the global market share of each plate in the industry in recent years and exchange rates are the basic scenario parameters in the competition environment analysis module, which will achieve its corresponding with different strategic planning, that is, system presets various possible values of scenario parameters, as well as its corresponding strategic planning results. This provides basis for strategic planning and decision of the enterprise, greatly weakens management risk brought by the strategic uncertainty enhancement, and improves the company’s environmental adaptability and responsiveness.