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A budget is a quantitative expression of a plan for a defined period of time. It may include planned sales volumes and revenues, resource quantities, costs and expenses, assets, liabilities and cash flows. It expresses strategic plans of business units, organizations, activities or events in measurable terms.
- Quotes are arranged alphabetically by author
A - F
- [For] the first time in the history of humanity... you have just had a single empire [the United States of America], so dominant, whose military budget is higher than the military budgets of the next 15 countries put together, and whose military-industrial complex itself is the eleventh largest economic entity in the world. This is the reality we live in, and this is the reality which confronts us in different ways.
G - L
- POSDCORB is, of course, a made-up word designed to call attention to the various functional elements of the work of a chief executive because "administration" and "management" have lost all specific content. POSDCORB is made up of the initials and stands for the following activities:
- Planning, that is working out in broad outline the things that need to be done and the methods for doing them to accomplish the purpose set for the enterprise;
- Organizing, that is the establishment of the formal structure of authority through which work subdivisions are arranged, defined and co-ordinated for the defined objective;
- Staffing, that is the whole personnel function of bringing in and training the staff and maintaining favorable conditions of work;
- Directing, that is the continuous task of making decisions and embodying them in specific and general orders and instructions and serving as the leader of the enterprise;
- Co-ordinating, that is the all important duty of interrelating the various parts of the work;
- Reporting, that is keeping those to whom the executive is responsible informed as to what is going on, which thus includes keeping himself and his subordinates informed through records, research and inspection;
- Budgeting, with all that goes with budgeting in the form of fiscal planning, accounting and control.
- This statement of the work of a chief executive is adapted from the functional analysis elaborated by Henri Fayol in his "Industrial and General Administration." It is believed that those who know administration intimately will find in this analysis a valid and helpful pattern, into which can be fitted each of the major activities and duties of any chief executive.
- Luther H. Gulick (1937), "Notes on the Theory of Organization," in: L. Gulick & L. Urwick (eds.), Papers on the science of administration. New York,: Institute of Public Administration, Columbia University, 1937. p. 13
- Budgeting is a math exercise, number crunching. Planning is a logical, linear process. Strategizing requires a great deal of information about customers and competitors, along with conceptual skills. Visioning uses a very different part of the brain than budgeting. As the name implies, it involves trying to see possible futures. It inevitably has both a creative and emotional component (e.g., “How do we feel about the options?”). When you use “orthodox planning” to create a vision, frustration and failure are inevitable.
- John Kotter, The Heart of Change: Real-Life Stories of How People Change Their Organizations (2002), p. 68
M - R
S - Z
- Henri Fayol (1949) is generally considered as the father of planning. As early as 1917, he led a nationally owned French mining concern from the brink of bankruptcy to international dominance. This was clearly the result of his development of a specific system. This system involved forecasts from various levels and persons within the organization. Managers from each level submitted their best estimates of the coming years activity and, based on this information, the Chief Executive Officer would make up a one to five year plan. Financial evaluations and control of departments were then based upon these projections.
Based on the business practices and policies of 1917, this was a radical and unsettling approach. Prior to Fayol’s innovation, the charisma and entrepreneurial abilities of the firm’s leadership was believed to be the major factor leading to its success. As more firms became corporations and the size of business entities continued to grow, Fayol’s planning approach became widely accepted. General Motors adopted this approach (during the 1930s and 1940s and provided an excellent example of this (Sloane, 1963) in the United States.
Since World War II, the evolution of planning approaches can be viewed as three distinct phases (Camillus, 1986). The first of these phases lasted through the 1950s and was, in actuality, an evolution of Fayol’s approach. Its base of operation was in the accounting department of a business. Budgeting and financial projections were used by management to develop future projections and to control operational decisions. From this writer’s experience, this appears to he the primary planning process used in the field of child and youth care today. How many of our present day agencies are operated (in reality) by a business office...- Frank Sullivan (1989) "The total agency planning model". In: The Child and Youth Care Administrator. Vol.2 No.2 pp 44-46: cited in: Quote of the Day, Nr 346, 1 Sept 2003
- A sovereign government's budget is not like the budget of a household or firm. Governments issue the currency, whereas households and firms use the currency. As the chartalist, or modern money approach, explains, modern governments actually spend by crediting bank accounts. It really just amounts to a keystroke, pushing a key on a computer that generates an entry on someone’s balance sheet. Government can never run out of these keystrokes.
- L. Randall Wray (2015), Why Minsky Matters: An Introduction to the Work of a Maverick Economist. p. 66
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