The Effect Of Budget Practices On Organizational Effectiveness: The Case Of Addis Ababa Lightrailway Transit Services

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.