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«Journal of Finance & Economics Volume 1, Issue 3 (2013), 39-50 ISSN 2291-4951 E-ISSN 2291-496X Published by Science and Education Centre of North ...»

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5. Discussion The discussion for this paper was based on the result obtained from test of the null hypothesis (H01) which states that budget target setting is not an effective tool for performance evaluation in the hotel industry in Kaduna State. The responses generated from question 11in the questionnaire was used for analysis and presented in table 2 below.

–  –  –

Table 3 above shows the computed expected frequencies in brackets against the observed frequencies as obtained from the responses gathered on question 11 of the questionnaire.

–  –  –

Source: Researcher’s computation, 2013 The calculated value of x2 = 15.56 while, for 6 degrees of freedom and 5% level of significance the critical value is 12.6. Based on the decision rule, the calculated value of x2 is greater than the critical value and therefore, the null hypothesis (H0.1) which states that budget target setting is not an effective tool for performance evaluation in the hotel industry in Kaduna State is hereby rejected and the alternative hypothesis (HA.1) accepted. This result is consistent with Mohammed (2009) and Fisher et al. (2002) that budget target setting is a mechanism for effective performance measurement in a firm.

The conclusion drawn from the findings of this study are as follows:

1. Budget coordination and control procedures of the hotels in Kaduna state are not very effective.

2. The budget target setting of the hotels in Kaduna State is not well articulated and therefore, lacks very clear focus. The current situation in respect of yardstick for performance appraisal is that it doesn’t exist in some hotels while what obtains in some could not be definitely described.

3. The targets or goals set for individuals and units to achieve through budgeting process could be a veritable management tool for measuring performance and efficiency in the hotel industry in Kaduna State.

Based on the conclusion of the study as presented above, the following measures are recommended:

Firstly, there is an urgent need for them to strengthen the process of budget formulation and implementation. Additional efforts are required from managements of hotels in Kaduna State to 48 © Science and Education Centre of North America Journal of Finance & Economics www.todayscience.org/jfe Vol. 1, Issue 3, 2013 ensure that diligence, due process, commitment and discipline are brought to bear on the entire processes of budgeting and budget control in order to achieve the maximum benefits inherent in successful budgeting and control exercise.

Secondly, budget guidelines and goals should be properly articulated, coordinated and communicated to all individuals and units Thirdly, management of the hotels situated in Kaduna State should adopt the level of budget target achievement as basis for performance and efficiency measurement. This is in line with the conclusion of the study that budget target setting is an effective management tool for performance evaluation on individuals and units. The adoption of this recommendation could lead to increase in subordinates efforts and task performance.

References [1] Abernethy, M. A., & Brownell, P. (1999). The Role of Budgets in Organisations Facing Strategic Change: An Exploratory Study. Accounting Organisations and Society, 24(3), 189 – 204.

[2] Adeniyi, A. A. (2001). An Insight into Management Accounting. Lagos Inc Analysis Consult.

[3] Baggott, J. (1979). Cost and Management Accounting. London, W.H Allen and Co. Ltd.

[4] Burchell, S., Clubb, C., Hopwood, A., Hughes, J., & Nahapiet, J. (1980). The roles of accounting in organizations and society. Accounting, Organizations and Society, 5(1), 5-27.

[5] Callahan, C. M., & Waymire, T. R. (2007). An Examination of the Effect of Budgetary Control on Performance: Evidence from the Cities (November 2, 2007). AAA 2008 MAS Meeting Paper. Retrieved from http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1003930.

[6] Chow, C. W., Cooper, J. C., & Waller, W. S. (1988). Participative Budgeting; Effect of a Truth Inducing Pay Scheme and Information Asymmetry on Slack and Performance. The Accounting Review, 63(1), 111 – 122.

[7] Dandago, K. I., & Tijjani, B. (2005). Cost and Management Accounting. Kano, Gidan Dabino Publishers.

[8] Dearden, J. (1962). Cost and Budget Analysis. Englewood Cliffs, N.J.: Prentice-Hall Inc.

[9] Defranco, A. (1997). The Importance of Financial Forecasting and Budgeting at the departmental Level in the Hotel Industry as Perceived by hotel Controllers. Hospitality Research Journal, 20(3), 99 – 110.

[10] Drury, C. (2004). Management and Cost Accounting (6th ed.). London, Thompson Learning.

[11] Fisher, J. G., Maines, L. A., Peffer, S. A., & Sprinkle, G. B. (2002). Using Budgets for Performance Evaluation: Effects of Resource Allocation and Horizontal Information Asymmetry on Budget Proposals, Budget Slack, and Performance. The Accounting Review, 77(4), 847 – 865.

[12] Hanson, E. I. (1966). The Budgetary Control Function. The Accounting Review, 41(2), 239 – 243.

[13] Henry, L. S. (1969). Principles of Management: A system Approach to Management. U.S.A South Western Publishing Co.

[14] Hilton, R. W. (1997). Managerial Accounting (3rd ed.). New York, NY: McGraw Hill International.

© Science and Education Centre of North America 49 Okpanachi Joshua & Nma Ahmed Mohammed Submitted on April 27, 2013 [15] Hirst, M. K. (1987). The Effects of Setting Budget Goals and Task Uncertainty on Performance: A Theoretical Analysis. The Accounting Review, 62(4), 774 – 784.

[16] Hofstede, G. H. (1967). The Game of Budget Control: How to Live with Budgetary Standards and Yet be Motivated by Them. Operational Research Society, 20(3), 388–390.

[17] Holmes, D. S., & Hurley, R. E. (2003). How Statistical Process Control Enhances Budgeting and Standard Costing – Another look. Management Accounting Quarterly, 5(1), 57 – 62.

[18] Hopwood, A. G. (1972). An Empirical study of the Role of Accounting data in Performance Evaluation. Journal of Accounting Research, 10, 156 – 182.

[19] Lasky, M. (1988). An Rx for Hotel Health. Lodging Hospitality, 44(6), 75 - 77.

[20] Locke, E. A., & Latham, G. P. (2002). Building a practically useful theory of goal setting and task motivation: A 35-year odyssey. American Psychologist, 57(9), 705-717.

[21] Locke, E. A., & Schweiger. D. M. (1979). Participation in Decision Making: One More Look.

In B. M. Staw, & L. L. Cummings (Eds.), Research in Organizational Behaviour (pp.265 – 339).

[22] Nanni Jr., A. J., Dixon, J. R., & Vollmann, T. E. (1992). Integrated Performance Measurement: Management Accounting to Support the New Manufacturing Realities. Journal of Management Accounting Research, 4, 1-19.

[23] Needles, B. E., Powers, M., & Crosson, S. V. (2002). Financial and Managerial Accounting (6th ed.). Houghton Mifflin.

[24] Pandey, I. M. (1999). Financial Management (8th ed.). New Delhi: Vikas Publication House, Pvt. Ltd.

[25] Rockness, H. O. (1977). Expectancy Theory in a Budgetary Setting: An Experimental Examination. The Accounting Review, 52(4), 893 – 903.

[26] Rockness, H. O. (1979). Expectancy theory in a Budgetary Setting: A Reply. The Accounting Review, 54(3), 635 – 636.

[27] Scott, J. A. (1970). Budgetary Control and Standard Costs, London: Pitman press.

[28] Stedry, A. C. (1960). Budget Control and Cost Behaviour. Englewood Cliffs, N.J.: PrenticeHall.

[29] Weetman, P. (1999). Management Accounting: An Introduction (2nd, ed.). England: PrenticeHall, Pearson Education Ltd.

50 © Science and Education Centre of North America

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