Effect of Budgeting Process on Organizational Effectiveness: The Case of Hadiya Zone Selected Woreda Public Finance Sectors

Abstract

The main purpose of this study was to investigate the effects of budgeting process on the organizational effectiveness in Hadiya zone public finance and economy development sectors. Qualitative and quantitative research methods were employed. The study was carried out in purposively selected five woreda of the zone. These woredas were selected among twelve woredas of the zone due to their establishments’ priorities, rich information, and experienced man power. Moreover, Stratified and simple random sampling techniques were respectively applied to select a sample of 157 staff members. From these 157 respondents, only 151 samples were used to collect the data (i.e. 96 %) of the respondents participated in the study. The data were collected through questionnaires and document analysis. The data obtained from respondents were analyzed using descriptive statistics and multiple linear regression analysis via SPSS version 20.0 soft ware. The findings of the study indicated that there was a direct relation between the effects of BPL, BI, BC, and TRB with the organizational effectiveness on HZOFED. The study indicated that the contribution of budget planning for the success of organizational effectiveness seems not promising as others did. Thus, its significance was not as strong as others. Inefficient budget utilization and Budget control in their organizations was not promising as expected.  All of four independent variables are making 63.20% of the contribution to OE in HZOEFD. Finally, recommendations such as empowering major stakeholders in budget planning, improving the execution of budget implementation, establishing budget control system and Providing Training Programs for Employees to Improve Organizational Effectiveness in Finance Sectors, enhancing organizational capacity in the budget process were forwarded to overcome organizational effectiveness challenges in the study area.

Keywords: budget, budgeting process, Government Finance, organizational effectiveness