Budgeting- JULY 16, 2008-07-17 Management •
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Plan that expresses the activities of an agency in terms of pesos covering a specific period of time Plan for allocation of resources resources and a control for ensuring that results comply with the plans
Economic goods o
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These are goods or services purchased by consumers from supplies to provide a benefit to the consumers
Income o
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A plan or schedule adjusting expenses during a certain period to the estimate or fix income for the period
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Nursing budget- a plan for allocation of resources based preconceived needs for a proposed series of programs to deliver patient care during one fiscal year
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Hospital budget- is a financial plan to meet future service expectations •
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Nonmonetary statistical statistical data- such as number admission, average length of stay, percentage of occupancy and number of patient days- are used for planning and control of the budgetary process Chart of accounts are designed to be consistent with the organization plan Management support is essential for a budgetary program Formal budgeting policies and procedures should be available in the budget manual
Cost is a money expended for all resources used
Expenses o
Applied Economics
It is the degree to which the demand for a good or service decreases in response to a price increase and increases in response to price decrease
Cost Factor o
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It is the amount of goods or services the consumers are willing to buy at that price
Elasticity of Demand o
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It is the amount of goods or services the suppliers are willing to provide at a given price
Demand o
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It is the additional utility gained by consuming one more unit
Supply o
Sound organizational structure with clear lines of authority and responsibility is needed
It is the benefit consumers get from the purchase of goods and services
Marginal Utility o
Pre Requisites for budgeting •
Utility o
An operational management plan stated in terms of income and expenses
Preparing the budget •
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Additional resources gained over time
Cost of providing services to patients also called OVERHEAD
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Expense Budgeting o
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Anticipate capital expenses
Budget Stages o
Types of Expense or cost fixed o
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The process of forecasting recording and monitoring the manpower, materials, and supplies and monetary needs of an organization
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Formulation stage
They remain constant as volume increases and decreases decreases over a period of time
Usually a set number of months before the start of fiscal year for the budget •
Variable Cost •
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Relate to volume and census
Sunk Cost •
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Fixed expenses that cannot be recovered even if a program is cancelled
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Direct Cost o
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The cost of providing and service
Cost Accounting o
Gather all financial, historical, and statistical data and distribute to costcenter manager Analyze data
Review and Enactment
Prepare unit budget
Present unit budget for approval
System assigns all cost to cost centers
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Develop objective and management plans
Revise and combine into organizational budget Revise and distribute to cost-center
Procedures of Budgeting o
Execution Stage
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product contributes a relatively stable percentage to the total sales volume
Change theory Reddin’s theory •
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Standard cost- it is develop to predict what labor and supplies should cost •
Budget Approaches •
Zero based budgeting o
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It is a method of budgeting used to control cost Type of budget no program is take for granted and each program must be justified each time funds are requested
Developed a planned change model that can be used by nurses Suggested seven techniques by which change can be accomplished
1. Diagnosi Diagnosiss- a scientifi scientific c problem problem solving solving 2. Mutual objectivesobjectives- ensures ensures that that the goals of both both groups, groups, those instituting the change and those affected by are brought into like 3. Group emphasis- team emphasis, emphasis, change change is more successful successful when supported by team 4. Maximum information- important to the success of change change
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Program budgeting o
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It is a part of budget planning planning Items such as continuing education program, employees benefits fares, health promotion program
Flexible budgeting o
It determines a range of volume instead an actual
5. Discussi Discussion on of impleme implementat ntation ion 6. Use of ceremony ceremony and ritual consider consider the the culture culture of organization, particularly the use of rewards to reinforce the change
7. Interpretation to any resistance to change- the process and systems which may require revising of the group work and objectives objectives set for implementation
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3 possible mechanism provides input to initial change •
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Individual expectations are not being met (lack of confirmation) confirmation) Individuals feels uncomfortable about some action or lack of action Former obstacles to change no longer exists (psychological safety)
2. Diagn Diagnosi osing ng the the probl problem em 3. Acquiri Acquiring ng the relev relevant ant resou resource rces s 4. Choos Choosing ing the solut solution ion 5. Gaini Gaining ng accept acceptanc ance e 6. Stabilizat Stabilization ion and self renewal renewal Lappit’s theory •
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Moving stage- working toward change by identifying problem or need for change, exploring the alternatives alternatives defining goals and objectives, planning how to accomplish and implementing the plan for change Defreezing- the integration of the change into one’s personality and the consequent consequent stabilization for change
Roger’s Theory •
Modified Lewin’s Change theory
5 phases 1. Awar warenes eness s
Added seventh phase to Lewin’s original theory
1. Diagn Diagnosi osing ng the the probl problem em 2. Assessin Assessing g the motiva motivation tion and and capacit capacity y 3. Assessing the change agent’s motivation and resource resources s 4. Selecti Selecting ng progres progressive sive change change objectiv objectives es 5. Choosing Choosing the the appropri appropriate ate role role of the change change agent agent 6. Mainta Maintaini ining ng the the chang change e 7. Terminat erminating ing the the helping helping relat relationsh ionship ip Types of change 1. Coerc Coercive ive chang changes es
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Resistance to change Resistance- often based on a threat to the security of the individual
means of statements of what is expected from everyone involved and measurement of what is actually achieved
Change- upsets an established pattern of behaviour
Procedure and process educating- the process to be used and the methods for evaluating the programs effectiveness
Causes of Resistance to change
First meeting
1. Threate Threatened ned self interes interestt
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2. Emba Embarr rras assm smen entt 3. Inse Insecu curi rity ty •
4. Habits 5. Comp Compla lace cenc ncy y 6. Inacc Inaccura urate te perce percept ption ion 7. Perc Perceiv eived ed loss loss of powe powerr 8. Rewar Rewards ds or relati relations onship hip
11. Low tolerance for change change 12. The changes going against the current current change
Set goals that are specific promote team work that are measurable and attainable
Action •
Employees perform work that meets their mutual objectives
Second meeting •
9. Objectiv Objective e disagree disagreemen mentt 10. Psychological Psychological reactions
The managers creates the condition for fulfilling the nurse need including the removal of obstacles encouragement of growth and provision of guidance
The meeting will provide a time for evaluation of results, review, appraisal and the setting of further goals
Problems of MBO 1.
Top manageme management nt is not support supportiveive- must must be supportive/monitored closely
2. Inconsistency Inconsistency exists exists among among mangers0 mangers0 can be fixed or avoided by increase
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Managerial grid 1, 9- country club management thoughtful attention to needs of people for satisfying relationship leads to a comfortable, friendly organization atmospher and work tempo
9,9 team management work accomplishment is from committed people independence through a common “common stable” in organization leads to relationship of trust and respect
5,.5 organization man management- adequate organization performance is possible through balancing the necessity to get out work with maintaining morale of people at a satisfactory level 1,1 impoverished management- exertion of minimum effort to get required work done is appropriate to sustain organization membership 9,1 authority- obedience efficiency in operations results from arranging conditions of work in such a way that human elements interfere to a minimum degree
