Horizontal information exchange and collaboration
Horizontal communication breaks down barriers between departments and enables coordination and collaboration between employees to achieve unified efforts and organizational goals.
- Cooperation
Cooperationdenotes a concerted effort by people from two or more departments to achieve results that meet a common goal or purpose, and that are typically greater than what an individual or department could achieve alone.
To understand the value of cooperation, consider the US mission in 2011 to attack Osama bin Laden's compound in Pakistan. Without the close cooperation of the raid could not have been successfulCentral Intelligence Agency (CIA)Opens in a new windowIU.S. MilitaryOpens in a new window.
Traditionally there has been little interaction between national intelligence officers and military officers, but the war on terror has changed that mindset.
For months during the planning of bin Laden's mission, military officers worked closely every day with the CIA team at a remote, secure facility on the CIA campus. "People who watched movies used to think it was possible, but nobody in the government thought it was possible," an official later said of the joint mission.
- horizontal connection
Horizontal linking is the horizontal communication and coordination between the departments of the organization.
Its importance is evidenced by comments made by Lee Iacocca when he bought Chrysler Corporation in the 1980s. While the following quote is from three decades ago, it sums up a problem that still exists in organizations around the world:
At Chrysler I found thirty-five vice presidents, each with their own area of responsibility. … For example, I couldn't believe that the manager of the technical departments was not in constant contact with his colleague from production. But that's how it was. They all worked alone. I took one quick look at this system and almost threw up. That's when I realized I was in really serious trouble. ... Nobody at Chrysler seemed to understand that the interaction between different functions of the company was absolutely crucial. People in technology and production almost have to sleep together. These guys didn't even flirt!
During his time at Chrysler, Iacocca brought horizontal coordination to a high level. Everyone working on a specific vehicle project—designers, engineers, and manufacturers, as well as representatives from marketing, finance, purchasing, and even external suppliers—collaborated on one floor so they could communicate easily. Horizontal linking mechanisms are often not drawn into the organizational chart, but are nevertheless an essential part of the organizational structure. Small companies tend to have a high level of interaction between all employees, but in large companies like Chrysler, Microsoft or Toyota, ensuring horizontal information sharing is crucial for effective collaboration, knowledge sharing and decision making. Poor coordination and information sharing, for example, are blamed for delays in Toyota's decisions and response times on quality and safety issues related to sticky fuel flakes, faulty brakes, and other problems. The following devices are structural alternatives that can improve horizontal coordination and information flow. Each enables the exchange of information.
- information systems
An important method for ensuring horizontal connections in modern organizations is the use of comprehensive IT systems. Computerized information systems enable managers or front-line workers throughout the organization to routinely share information about a problem, opportunity, action, or decision. For example, at Veterans Administration (VA) hospitals across the country, an advanced system called Vista enables staff across the organization to access complete patient information and provide better care. By enabling close coordination and collaboration, technology has helped make the VA one of the highest-quality, most cost-effective healthcare providers in the United States.
Some organizations also encourage their employees to use the company's information systems to build relationships within the organization with the aim of supporting and improving ongoing horizontal coordination across projects and geographic boundaries. CARE International, one of the world's largest private international humanitarian organizations, has expanded its staff database to make it easier for people to find people with similar interests, concerns or needs. Each person in the database listed previous and current responsibilities, experiences, foreign language skills, experiences in crisis situations, skills and competencies, and external interests. The database makes it easier for people working across borders to find each other, exchange ideas and information, and build lasting horizontal connections.
- connection roles
A higher level of horizontal linkage is direct contact between affected managers or employees. One way to encourage personal contact is to create a dedicated liaison role.
- The contact person is in one department but responsible for communication, coordination and cooperation with another department.
- Liaison roles often exist between engineering and manufacturing as engineers need to design and test products that conform to the constraints of manufacturing facilities.
The engineer's office may be located on the production floor, so the engineer is always available to discuss technical issues with the manufactured products with production managers. The R&D person can participate in sales meetings to align new product development with the desires of the sales people.
- emergency services
Link roles usually only connect two departments. When the connection spans multiple departments, a more complex entity, such as a task force, is required.
The task force is a temporary body made up of representatives from all affected organizational units.
Each member represents the interests of the department or department and can bring information from the meeting back to the responsible department.
Working groups are an effective means of horizontal bundling for transient problems. You solve problems through direct horizontal collaboration and reduce the information load in the vertical hierarchy. They are usually solved after completing their tasks.
Organizations use task forces for everything from hosting their annual company picnic to solving expensive and complex manufacturing problems. One example comes from Georgetown Preparatory School in North Bethesda, Maryland, which used a task force of teachers, administrators, trainers, support staff and outside consultants to develop a flu preparedness plan. When the threat of H1N1 flu hit a few years ago, Georgetown was far better prepared than most educational institutions because they had a plan in place.
relational coordination
The highest level of horizontal coordination, shown in Figure X-4, is relational coordination.
Relational coordination is “frequent, timely communication for problem solving through relationships based on shared goals, shared knowledge, and mutual respect.”
Relational coordination is not an entity or mechanism like the other elements listed in Figure X-4, but rather part of an organization's structure and culture.
Figure X-4 Ladders with Horizontal Coupling and Coordination Mechanisms | loan -research gateOpens in a new windowIn an organization with a high degree of relational coordination, people across departments freely share information and continuously interact to share knowledge and solve problems. Coordination occurs through a network of enduring positive relationships, not through formal roles or coordination mechanisms. The employees coordinate and work directly with each other in different units.
Building relational coordination into the structure of the organization requires the active role of managers. Managers invest in training employees in the skills they need to interact with each other and resolve cross-functional conflicts, build trust and credibility by showing they care about employees, and consciously build relationships based on shared relationships Goal-based rather than emphasizing each department's goals. . Employees are freed from strict work rules and have the freedom to interact and contribute when needed, with rewards based on team effort and performance. Frontline supervisors have a small perimeter of control that allows them to develop strong working relationships with subordinates and staff trainers and mentors. Managers also create specific cross-functional roles that encourage cross-border coordination.
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FAQs
The budgeting process: the budget and long-term planning | Wikipedia? ›
Long-term financial planning involves projecting revenues, expenses, and key factors that have a financial impact on the organization. Understanding long-term trends and potential risk factors that may impact overall financial sustainability allows the finance officer to proactively address these issues.
What are the steps of the budgeting and planning process? ›- Assess your financial resources. The first step is to calculate how much money you have coming in each month. ...
- Determine your expenses. Next you need to determine how you spend your money by reviewing your financial records. ...
- Set goals. ...
- Create a plan. ...
- Pay yourself first. ...
- Track your progress.
Long-term financial planning involves projecting revenues, expenses, and key factors that have a financial impact on the organization. Understanding long-term trends and potential risk factors that may impact overall financial sustainability allows the finance officer to proactively address these issues.
What are the 4 steps of the budgeting process? ›Budgeting for the national government involves four (4) distinct processes or phases : budget preparation, budget authorization, budget execution and accountability.
What is the difference between budgeting and long term planning? ›Long-term vs.
With a financial plan, you typically track your progress on a quarterly or semi-annual basis. With a budget, you record your income and expenses on a weekly or monthly basis. Generally, the closer you stick to your budget, the more progress you will make on your financial plan.
Before that, let's go over a few examples of long-term goals: Career goals: “Build a profitable business”, “Turn your passion into a career.” Academic goals: “Get a Bachelor's degree”, “Get a Master's degree abroad.” Personal development goals: “Learn a foreign language”, “Travel on all 7 continents.”
Which is a long term budget example? ›The budgets are prepared to show the long term planning of the organisation. This budget is prepared normally for a period of 5 to 10 years. Example : Capital expenditure budget, research and development, long term finances etc.
How to make a long term budget? ›- Step 1: Prepare for life's contingencies. ...
- Step 2: Define the financial goals. ...
- Step 3: Prioritise the financial goals. ...
- Step 5: Consider the money. ...
- Step 6: Review all your expenses. ...
- Step 7: Set a savings target. ...
- Step 8: Divide the savings for important goals.
It involves reviewing past budgets, identifying and forecasting revenue for the coming period, and assigning amounts to spend on a company's various costs. When done well, the process involves input from senior management, your finance team, and budget managers across the organization.
What is the budget process? ›Normally, the budget-making process starts in the third quarter of the financial year. The budget has four stages viz., (1) estimates of expenditures and revenues, (2) first estimate of deficit, (3) narrowing of deficit and (4) presentation and approval of budget.
What is an example of a budgeting process? ›
What is a Budgeting Process? The budgeting process is the steps organizations take to prepare and execute budgets for a specific period. For example, a sporting goods company may perform budgeting steps to determine how much they want to allot to produce footballs for the next year based on projected sales.
What is the purpose of long-term budget? ›Fundamentally, long-term budgeting is putting your strategic goals into numbers. It's a good prediction of what cash inflows and outflows your business will be experiencing in the future. Periodically compare actual results to what you forecasted earlier, and adjust your budget accordingly for the future.
What is a long-term budget goal? ›Long-term financial goals are the targets you set to improve your finances over time, cover future expenses, or replace an income stream. No exact time range defines a long-term goal from a short-term one, and the answer might change depending on who you ask.
What comes first budgeting or planning? ›Planning outlines the company's financial direction and creates a model of expectations for the next three to five years. Planning is often the first step in setting up a company. Budgeting documents how the overall plan will be executed month to month.
What are the 3 major components of the budget process? ›For any organization, a budget, whether done annually or conducted throughout the year in the form of rolling forecasts, is a critical component for success. Any successful budget must connect three major elements – people, data and process.
What are the 5 basic elements of a budget? ›- Income. The first place that you should start when thinking about your budget is your income. ...
- Fixed Expenses. ...
- Debt. ...
- Flexible and Unplanned Expenses. ...
- Savings.
How to answer the question, “What are your long-term goals?” Your answer needs to describe your long-term goals, the steps you already took to achieve them and the steps you are planning on taking. You will also have to describe how the role you're interviewing for can help you achieve those goals.
What is long term plan strategy? ›A long-term strategy is a comprehensive plan for a business that defines goals for the future. During this process, you're setting and completing goals to achieve an overarching goal for the company. To create a long-term strategy, you may set multiple smaller goals that help you meet your ultimate objective.
What are the two long term budgets? ›Capital expenditure budget and research & development budget are long term budget as both are non operational activities.
What type of budget prepared for a long period of time? ›Operating budget
An operating budget shows a business's projected revenue and the expenses associated with it for a period of time. It's very similar to a profit and loss report. It includes fixed cost, variable cost, capital costs, and non-operating expenses.
What are the types of budgeting? ›
- Activity-based budgeting. ...
- Incremental budgeting. ...
- Value proposition budgeting. ...
- Zero-based budgeting. ...
- Flexible budgeting. ...
- Envelope budgeting.
Having a budget keeps your spending in check and makes sure that your savings are on track for the future. Budgeting can help you set long-term financial goals, keep you from overspending, help shut down risky spending habits, and more.
How long is a long-term budget? ›A long-term budget is prepared for more than one year. It covers three to ten years. A short-term budget is prepared for one month to one year. A long-term budget is designed to deal with future goals and...
How long should a budget be prepared? ›The key to creating a successful budget is to add up all of your revenue sources over a 12-month period, forecast your expenses to estimate your profit (the difference between your revenue and costs), and frequently review your budget through monitoring monthly.
What are the four 4 main types of budgeting methods? ›- Activity-based budgeting. Activity-based budgeting records and tracks all costs related to the business. ...
- Incremental budgeting. Incremental budgeting is a process where a budget is created by iterating on the budget used in the year prior. ...
- Value proposition budgeting.
Any goal within a five-year window is considered short term; anything longer is (you guessed it) long term. Some short-term goal examples include buying a new car or paying down student loans, while long-term goals may be things like saving for retirement, paying for your kids' education, or buying a vacation home.
What is a long-term goal and example? ›Long-term goals are usually at least several years away. Sometimes it takes many steps to complete a long-term goal. These smaller steps can be your short-term goals. For example, your long-term goal might be to complete all of your GED exams. This could take several years of going to school and studying.
What are examples of long-term goals? ›- Graduating from college.
- Opening your own small business.
- Taking a month to travel.
- Writing a novel.
- Becoming fluent in a foreign language.
- Reading 52 books a year.
- Setting aside money for your retirement.
- Training for a marathon.
Personal long-term goals examples
Become a better spouse or parent. Complete your first marathon. Create and commit to a fitness routine. Learn a foreign language.
Planning provides a framework for a business' financial objectives — typically for the next three to five years. Budgeting details how the plan will be carried out month to month and covers items such as revenue, expenses, potential cash flow and debt reduction.
Why is it important to make a plan first before budgeting? ›
Budgeting by itself is not effective because it only reflects the company's financials, and financials are only part of the picture. Where budgeting tends to be a once-a-year project, strategic planning looks at a longer period of time and considers the totality of the company and its future.
What is the simple first rule of budgeting? ›Key Takeaways. The rule states that you should spend up to 50% of your after-tax income on needs and obligations that you must-have or must-do. The remaining half should be split up between 20% savings and debt repayment and 30% to everything else that you might want.
What is the difference between short-term and long term budgeting? ›A long-term budget is prepared for more than one year. It covers three to ten years. A short-term budget is prepared for one month to one year.
Which type of budgeting covers long term planning? ›Capital budgeting is the long-term financial plan for larger financial outlays. Capital budgeting relies on many of the same fundamental practices as any other form of budgeting.
What is the purpose of long term budget? ›Fundamentally, long-term budgeting is putting your strategic goals into numbers. It's a good prediction of what cash inflows and outflows your business will be experiencing in the future. Periodically compare actual results to what you forecasted earlier, and adjust your budget accordingly for the future.
What is the long term planning process for making and financing? ›Capital Budgeting is a long term planning for making and financing proposed capital outlays.
What are short and long-term budget goals? ›Any goal within a five-year window is considered short term; anything longer is (you guessed it) long term. Some short-term goal examples include buying a new car or paying down student loans, while long-term goals may be things like saving for retirement, paying for your kids' education, or buying a vacation home.
What are the key differences between short term and long-term planning? ›What are the differences between short- and long-term planning? Short-term planning evaluates your progress in the present and creates an action plan to improve performance daily. However, long-term planning is a comprehensive framework that comprises of goals to be met within a four- to five-year period.
What is the relationship between short term and long-term financial planning? ›The long-term plan is meant for a goal of four to five years. The short-term plans are used to reach the long-term plan of the organization. That is why short-term plans are extremely dynamic while long-term plans are static in nature.
Can you explain the budgeting process? ›The budgeting process lets an organization plan and prepare its budgets for a set period. It involves reviewing past budgets, identifying and forecasting revenue for the coming period, and assigning amounts to spend on a company's various costs.
What are the 3 main types of budgets? ›
- Balanced Budget. A budget is deemed a balanced one if the expected government expenses equal the estimated government receipts during a given financial year. ...
- Surplus Budget. The second of the three types of budgets are the surplus budget. ...
- Deficit Budget.
Master Budget:
In managerial accounting, a master budget refers to the comprehensive budget of the company's financial and operational activities at a given period. A master budget requires approval prior to its use in the next accounting year.
Firstly, determine the principal budget factor. This is also known as the key budget factor or limiting budget factor and is the factor which will limit the activities of an undertaking. This limits output, e.g. sales, material or labour.
What best describes the purpose of a budget? ›A budget is a plan you write down to decide how you will spend your money each month. A budget helps you make sure you will have enough money every month. Without a budget, you might run out of money before your next paycheck.
What are the benefits of long-term planning? ›Long-term planning enables the top businesses to set a lasting vision, long-term goals and a path to organisational growth. Looking 5-10 years ahead gives boards, investors and other stakeholders a guide to future decision-making.
What are the advantages of long-term budgeting? ›Having a budget keeps your spending in check and makes sure that your savings are on track for the future. Budgeting can help you set long-term financial goals, keep you from overspending, help shut down risky spending habits, and more.