Budgetary Control and Organizational Survival: Evidence from Manufacturing Firms in Nigeria

Abstract

This paper was set out to investigate the functional rapport amid budgetary controls and organizational survival of manufacturing companies in Nigeria. The major problem that motivated this study is incessant collapse of manufacturing companies as a result of lack of proper budget preparation and embracing of budgetary control measures to enhance their profitability. The study adopted the Ex-Post-facto research design it covered listed manufacturing companies in Nigeria for a period of five years 2015-2019. The independent variables were decomposed into a change in operating costs, sales growth and change in operating profit, while the dependent variable was organizational survival proxied by the age of the company. Data were got from the yearly accounts of the selected companies and analysed using descriptive statistics and regression. The result suggests that budgetary control is not a significant determinant of survival of manufacturing companies in Nigeria. This implication of this finding is that manufacturing companies in Nigeria are not fully embracing budget and budgetary controls or that they prepare and not implement it fully. Thus, the study recommends that the management of manufacturing companies should as matters of urgency employ budgetary controls that assist them greatly in controlling changes in the operating costs.