Abstract:
The objective of the study is to highlight the importance of planning budgets as a tool of performance control in oil companies operating in Sudan for the period from 2000 up to 2007.
The problem of the study had stemmed from using inefficient method of budgets preparation, and its applications, that’s because many companies use to prepare their annual budgets with no consideration of using budgets perfectly so as to achieve the predetermined objectives. They thought that its preparation is a routine procedure used by all firms. The study has suggested a solution to aforementioned problem through the following hypotheses:
1- Participating in the budgets preparation leads to the accuracy of estimated figures of the budgets, and will enhance the coordination with in the firm for goal achievement.
2- A company mainly depends upon the budgets process to control and evaluate the department performance.
3- There is no system use to estimate the budgets figures except the management expectation.
4- The accountability of the cost center leads to accuracy of budget estimation.
The study has used some of research methods such as historical, deductive, inductive and descriptive approaches by using random sampling in the period of data collection and analysis from primary and secondary sources. Moreover, the statistical package for social sciences (SPSS) is used in analyzing the data and testing the hypotheses.
The analysis results asserted that all hypotheses are true.
The study has revealed important findings via: Planning budgets in oil companies are the main tool use to control its performance, the staff in lower level of management participates effectively with the higher level management to set an efficient over all plan so as to be implemented efficiently with out any conflicts, Budget’s figures are estimated accurately according to what is expected to happen in the coming year by studying the surrounded environment and depending on the previous year’s budgets actual results and Planning budgets establish the performance standards of oil companies and translate the nominal objective into quantitative figures so as to be easy for measuring.
Finally the study recommends to:
1- Consideration of behavior conflicts in budgets preparation either conflicts between management and staff or disputes of department with each other.
2-To activate the control process by budgeting and measuring the performance of department accordingly.
3- Measuring the individual performance according to department performance so as to delegate the responsibilities among the staff.
4- Train the staff on how to prepare a sound budget and how to meet the budgets requirements so as to achieve its objectives. In addition to suggestion of further researches.
