Abstract
The issue of this chapter is to illustrate the aspects of planning, budgeting, and controlling green activities within an economic entity and their impact on the profitability of the entity. The objectives of this chapter are to present the strategic planning, budgeting, and control/controlling processes; the presentation of the principles underlying the budgeting; and the presentation of a case study on the elaboration of the budgetary process and the controlling of an economic entity in the manufacturing field. The chapter presents the types of integrated budgets and how to report the achievement of the objectives. By providing effective information on planning and budgeting, green controlling becomes an indispensable tool for any economic entity in monitoring and measuring performance. Thus, through the contribution made, a new theoretical and empirical framework is created by the authors, which facilitates the identification of new ideas, themes, and debates of other aspects encountered in the activity of the economic entities.
TopBackground
Regarding the issues addressed, the national and international literature offers a considerable number of theoretical and practical studies related to the concepts of strategic planning, budgetary process, budget itself, control and controlling (Albu & Albu, 2003; Anthony & Govindarajan, 2007; Burlaud & Simon, 2003; Bouquin, 2006, 2008; Briciu et al., 2010; Căpuşneanu, 2006; Dragomirescu, 2010; Kerzner, 2001; Tabără, 2009). Anthony (1965) defines strategic planning as a means of formulating the strategy. According to Kerzner (2001), strategic planning is the process of developing and implementing decisions about the future direction of the organization, being vital to the survival of any organization because it helps companies adapt to the ever-changing environment applicable to all managerial levels and all types organizations. Wagner (1883) defines the budget as “a plan comprised of figures, in a sequence determined by a systematic object, about the likely inputs and outputs (incomes and expenses) in monetary terms or monetary values that occur in the economic management of a public body for a certain period of time.” After Man and Rakos (2015), a budget is “a provision for income and expenditure over a specified period, an evolutionary and comparative picture of earnings and expenses to be incurred.”
Key Terms in this Chapter
Assessment: A periodic assessment of effectiveness, efficiency, impact, sustainability and relevance in the context of the stated objectives.
Monitoring: A continuous function that uses the systematic collection of data with reference to the specified indicators to provide management and the main stakeholders interested in an ongoing intervention, indications of the extent to which the objectives are met and the use of the allocated funds.
Effectiveness: The extent to which the objectives of an intervention have been or are expected to be achieved taking into account their importance.
Sustainability: Continuing the benefits of an intervention after it is completed. The likelihood of continued long-term benefits. The risk resistance of the net benefits over time.
Efficiency: A measure of the economic way in which resources/contributions (funds, expertise, time, etc.) are transformed into effects or outcomes.
Intermediate Goal/Milestone: An activity used to identify significant events in a program, such as completing a major milestone. An activity indicated or highlighted as regards special monitoring of progress or completion.
Interested Stakeholders: All those who are interested (directly or indirectly) by an institution, its activities, and achievements. These may include clients, partners, employees, shareholders/owners, government, or regulatory bodies.
Objective: A general statement of what will be done and of the improvements to be made. An objective describes an expected result or impact and summarizes the reasons why a number of actions have been taken.