Significance of Budgeting Process in Decision-Making - Sony Corporation

Management Accounting

INTRODUCTION
The MA could be interpreted as a manner of tracking, analyzing quantitative
and monetary data with view to producing internal reports. Such reports shall be addressed to
management in order to take necessary action (Petrosyan, 2020). The selected company in
the study is the Sony Corporation. The organization manufactures and markets different
electronic products. It is located in Kōnan, Minato, Tokyo. The study report is focused on the
significance of budgeting process and its contribution to decision-making process. For this
motive, the study includes a thorough overview of the various forms of budgeting styles and their
key roles and importance.
MAIN BODY
1. Different types of budgeting.
In general, the term budgeting can be defined as a way in which budgets are
prepared or projection of future income and expenses is done in a detailed manner for a
financial year (Rubin, 2019). The budgeting is essential for each types of business or
company whether it is large or small. By help of this approach, it becomes easier for
managers to prepare effective policies and plans. This becomes possible because
necessary information about financial perspective is derived by help of different kinds of
budgets. There are a range of budgeting styles which are being applied in companies. In
the context of Sony corporation, below mentioned budgeting styles can be used in order
to make competitive planning and strategies by their managers:
Static budgeting style- This is defined as a form of budgeting approach under which
estimated value of income and expenses cannot be changed in portion to change in
production volume. This is one of the key feature of static budgeting as finance managers
do not need to make update in projected financial data. This approach is used for those
activities and operations which are possible to remain same in an accounting cycle such
as rent of building, salary of employees and many more. In the context of above
mentioned company, Sony corporation they can implement this budgeting approach. This