Abstract:
The budgeting practices are increasingly recognized as the key tool for achieving organizational
effectiveness. It is nevertheless also recognized that an organization can have a sound budget
and financial system and still fail to achieve its intended organizational targets; this suggests
that the rules by which the budget practices are important and that they influence organizational
effectiveness. The main purpose of this study was to assess the effect of budget practices on
organizational effectiveness in Addis Ababa Light Railway Transit Services. From the total
population of 1331; the study used sample of 140 staff employees including directors and
managers of each department within the organization. The study employed a descriptive and
explanatory survey research design targeting the staff in the study area. A sample of 140 staff
members were selected by using convenience sampling technique from each department. The
researcher used questionnaire and interviews and also secondary source of data was used for
triangulation purpose. Data was analyzed in the form of descriptive and multiple linear
regression models. Data was analyzed using Statistical computer software Package. The result
revealed that all factors were determinants of the organizations’ effectiveness. Budget
preparation practice positively affected the organization at 1% and budget evaluation practice
affected the organization effectiveness positively at 5% confidence interval, Budget
implementation and budget control and management negatively affected the organizations’
effectiveness at 10%confidence interval.
