Budget Planning and Control
Instructions: Describe the company that you currently work for, have previously worked for, or would like to work for in the future. Determine at least two (2) compelling reasons that this company should prepare and manage a budget. Predict the two (2) most likely positive and negative financial outcomes for this company if it properly or improperly performs effective budgeting.
Outline a high-level budget plan for the company. In your high-level budget plan, recommend the most appropriate budgeting phases for the company.
Propose two (2) methods and techniques that the company should use to manage its budget over time in preparation for the fact that budgets are ever changing. Justify your response.
Imagine that the company is facing a financial challenge that is causing the actual amounts of money that it spends to become significantly off target from its budgeted amounts. Prepare an action plan to resolve the budget misalignment. In your action plan, recommend at least one (1) budgeting technique to resolve the budget and actual discrepancies. Provide a rationale for your response.
Use at least three (3) quality academic resources in this assignment. Note: Wikipedia and other Websites do not quality as academic resources.
Your assignment must follow these formatting requirements:
Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; references must follow APA or school-specific format. Check with your professor for any additional instructions.
Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required page length.
The specific course learning outcomes associated with this assignment are:
Evaluate management control systems and examine their relationship with accounting and planning, including feedback and non-financial performance measurements.
Evaluate decision making tools for capital investments, budgeting, and budgeting controls.
Analyze financial accounting tools and techniques that convert financial accounting data into information for decision making.
Use technology and information resources to research issues in financial accounting for managers.
Write clearly and concisely about financial accounting using proper writing mechanics.
Grading for this assignment will be based on answer quality, logic / organization of the paper, and language and writing skills, using this rubric.
Solution.
Budget Planning and Control
Comcast is one of the largest broadcasting and cable television network in the world by revenue. It is the largest multinational broadcasting company in the United States after its acquisition of the several broadcasting networks (Wyatt & Cohen, 2014). The company has been listed as the most popular cable company as it dominates most market. The company has also enjoyed market leadership as the largest home internet-service provider in the United States. Comcast operates multiple cable-only channels, which includes the popular E! Entertainment television, over the air television networks and a film production studio in various parts of the United States (Wyatt & Cohen, 2014).
The company also operates on an international level, featuring various companies from Japan, Singapore. Comcast has also arranged on several locations outside the United States to open planned and developing future operations (Wyatt & Cohen, 2014). Comcast has also aimed its operations through mergers, which has earned the company a significant amount of money. The company records over $45 billion over its merger with Time warner cable in 2014 indicating a significant growth (Wyatt & Cohen, 2014). However, the company terminated its agreement with the Time warner on 2015 over some disagreement.
The financial performance of Comcast has been impressive since its incorporation over the years. The revenues of the company has grown significantly from six billion dollars to thirty six billion dollars from the year 1999 to 2009 (Wyatt & Cohen, 2014). On the same period, the company has seen the rise of its profit from four percent to eight percent. Due to increase in high-speed internet marketshare, the company has seen an increase in profit by thirty percent in 2012. In 2014, Comcast managed to generate 1.1 billion in revenue because of the Sochi Olympic during that same period (Wyatt & Cohen, 2014).
Reasons for budget planning
Comcast has experienced major shortcomings on how it handles its revenue and expenditures over the years. The company has recorded negative financial issues as publics on the company grew over the years. First, the company has experienced major violation on net neutrality practices in the past. Many advocate have suggest that Comcast should provide distinction between its private network services and the rest of the internet (Steiner, 2010). Due to lack of competitive market in the internet community, Comcast has gained competitive advantage over majority of its service area.
There is limited competition among cable providers, which gives Comcast a large market to provide internet and other broadcasting services. This will require a good budget plan in order to better serve the market. Comcast has also faced criticism over its customer satisfaction. Comcast customer satisfaction index has always been ranked the lowest among other cable providers (Steiner, 2010). This is due to poor budgeting planning on customer care section, which leads to poor customer relationships.
Comcast influence a large part of the United States, which gives the company a higher negotiating power as a large internet service provider (Hofstede, 2012). With the appropriate budgeting plan, the company is able to leverage paid peering agreements to influence end-user connection speeds. The company has also been listed as the worst company in America by the consumerist in the year 2014 and 2010, which has damaged the reputation of the firm (Wyatt & Cohen, 2014). These have also raised concern regarding consumer trust on its ownership of both content production and content distribution. These issues can now be settled with the appropriate budgeting process on the marketing aspect of the company.
As the leading cable network in the united states in terms of its revenue, Comcast earnings is set to increase during the period of 2016 due to its worldwide target operations that the company has set forth. Comcast direct connection to amazon.com Inc that has set to increase its web services across United States in order to help its enterprise customer is yet boost its revenue. Comcast business service unit is of the fastest growing divisions in the company, which has the ability diversify its operations and create a stable revenue stream over the coming years (Wyatt & Cohen, 2014). Comcast is likely to face a decrease in its financial performance if it fails to responds to the failing consumer satisfaction index. Keeping a proper relationship with the consumers can increase revenue for the company. However, Comcast has failed in numerous occasions to gain public support on consumer satisfactions prospects (Wyatt & Cohen, 2014). Comcast is also likely to have negative financial outcomes on its marketshare if it fails to address issues concerning net neutrality violation that the company has been criticized for on numerous occasions. The company needs to ensure fair influence on end-user connection speed on its internet services to the public.
Budget plan
In order to properly serve the consumers, Comcast has set over $200million dollars to improve high-speed internet services. The process will enable the consumers to access internet services with better speed connections increasing the experience to the consumers. However, this will come at a cost, as the company will have to introduce a usage based billing model to minimize the cost on the company. This means that consumers will be able to consume a certain amount of data before incurring extra charges for going over the limits. The limits will be set at a level where it would not affect majority of the consumers. The company has budgeted for 350 gigabytes or 500 gigabytes per month (Wyatt & Cohen, 2014).
Comcast has also budgeted for over $150 million in improving a customer care centers across the nation. The budget will only cater for people around the United States for the moment. The operation is likely to improve customer relationships across the country. The centers are set to be made conveniently for the consumers in handling emergency calls and other grievances. This is set to increase its marketshare by 20% over its next five year (Wyatt & Cohen, 2014). Comcast will also spend $300 million on adding more workers to improve the customer care platforms. This is set to improve waiting hours and avoid long holds on the telephones waiting for help. The $300 million budget plan will focus on upgrading operators; provide new computer aps and billing systems. The budget will also focus on how Comcast delivers its cable, internet and telephone services to its consumers (Wyatt & Cohen, 2014).
In order to fully accomplish the budget plan, the company will focus on four phases of the budgeting cycle. The first phase will be the preparation phase where the ground level will be establish and the appropriate initiatives will take place. At this phase, the budget will stipulate what to expect from the top leadership, concerning decision-making process. Spending decisions from every level of the department will be taken into considerations for the inclusion or exclusion from final document. The second phase should be the approval phase where the budget will undergo debate. In this phase, the budget will be scrutinized in order to evaluate how the Comcast is spending its funds. The third stage will be the execution phase where the budget is passed to the chief executives for implementation process. In this case, the money is spent accordance with the budget. The fourth stage is the evaluation stage where the budget is ensured is spent in accordance with terms and conditions of the company (Steiner, 2010). The auditing team ensures that the money is effectively spent and the objectives of the budget is reached. In addition, the evaluation stage also analyses if the budgeted money spent generated some returns.
References
Hofstede, G. H. (2012). The Game of Budget Control. Abingdon: Routledge.
Steiner, G. A. (2010). Strategic Planning. New York: Simon and Schuster.
Wyatt, E., & Cohen, N. (2014). Comcast and Netflix reach deal on service. Management Journal, 40-56.