Sweet Stories From Barcelona

Time keeps running, and world keeps turning, whereas I didn’t have time to update my story on my blog.

It’s so bullshit if people say that they didn’t have time to do what they wanna do.

Especially a man who study in business where business people should keep able to manage time properly.

But then, we have to go on. it’s just my opening sentences of my story but we can learn from that sentence namely about philosphy lesson that can be captured from this event is we can’t regret past time.

Oke guys This time, I want to share my solo trip was in Barcelona. I did solo trip but I actually didn’t feel alone in my journey there. There I brought my little friend who is a canon (camera).

He accompanied me to around that town. so I absolutely felt enjoy with my solo trip.

I was spending a budget approximetely 200 € there for just a week but honestly I got so much more than what I spent there beforehand.

  • 2 ways flight cost (Lübeck – Barcelona) with ryan air cost 60 €.
  • Bus ticket from Hamburg to Lübeck Airport and vice versa cost 20 € ( one way cost 10 €)
  • Bus Ticket from Barcelona airport to Barcelona city was burdened 11,30 € (one way  cost 5,65 € )
  • for foods I bought some foods in Lidl discounter shop where sell a cheap product.
  • Hostel for 4 nights cost 64 € ( about 15 €/nights)
  • and its rest expenses I used to buy foods in unexpensive restaurant

And one night, I slept under the blue sky trying to feel how a homeless can live along their life without home.

And it was not so complicated because every building can be visited freely and without doubt to go to clean toilet. 🙂

In Barcelona I didn’t use public transportations because in my philosophy it wouldn’t be so interesting with easy way to go somewhere. Walking around the city with our owned foot We can get more experiences.

for examples :

Maybe people get fear if they have lost their way.

but for me, it can be a super exciting where we are as a human being should find the right way from many wrong way. and it perhaps can be a manner to contact with social to learn about the people.

and it can be a lesson to understand people with different language and with limited understanding each other. but it’s so fun.

I also usually bring a city map and try through different way to capture a best spot.

because that I believe in every place has its beauty side.

And my friend canon helped me to saved every moments that I visited. 🙂

the most positive thing of  when I was walking with my foot around its Barcelona town was I have been successfuly to bring my weight from 73 kg to 69 kg because of walking about 30 km a day.

I was being a vegetarian there. eating fruits and vegetables almost everyday were being my entirely daily foods in Barcelona and being healthy absolutely. 🙂

Barcelona in my point of view was so incridible and magnificant city.

Every city corners had a special design architecture.

and I can garantie you that all of those beauty just can be felt when you use your foot to go around that town., Barcelona also has many special place to be enjoyed.

I was also thinking if I have a wife, I will place our honeymoon in Barcelona. 🙂

Not only Indonesia has beautifull beach, but also Barcelona has it too. Barcelona has Montjuic mountain where there is a big castil above there.

 

From there We can take best picture from Barcelona city. .

and If we gonna go to the Barcelona downtown at the night.

we still can get feeling the 24 hours atmosphere of the city where live always though the night comes and the sun rise. The city has so romantic atmosphere because of providing 24 hours cafe alongside its street..

One of some stories being my bad experience in Barcelona I got, when I was asked by local police without uniform to open my bag and all of my stuff including my sweet pocket. They tried to check inside my bag. but I didn’t let them to do it. they supposed me that I was a punk kid who sell narcotics in Barcelona.

But I don’t trust them because both of them didn’t look like a police. I saw one of them did pee at random place, because of that I didn’t trust them. As it was, I was thinking to run away from them. but they kept catch my bag. so I couldn’t run at that moment. then I tried to trust them as a police. I said I am a tourist from Germany and finally I let them to check my pocket. after checking my pocket they didn’t find anything what they were looking for. but then they explained me that here is usually used as a place for the narcotics transaction by the gangster. Without longer thinking I left that place as soon as possible in order to go away from another problems in that area.

One of my funny story in that beautiful country was when before I wanted to go to outside the Barcelona airport. I was still wearing 3 T-Shirts with 4 sweaters. so it means I weared 7 layers of stuffs on my body. and it was so hot honestly I felt. All those I did with a reason to reducing weight of my bag in order that can be entered into its airoplane bag cabin. Flying with Ryanair we’re just permited to bring our bag in weight about 10 kg. because of that reason, I had to use my mind to deceive the flight attendants.

But It was so worth it, and it saved my money until about 20 €.

then, I thought that Barcelona seems like a Germany where it might be cold as the night come.

but, After I arrived and went to outside its airport, I felt so hot. and then I was looking for a toilet to take some of my clothes down and then to put into the small bag that I prepared beforehand. Going ouside I had felt the themperature about 29 degree of celcius.

Yeah finally I found sommer and sun sine in europe continental after my experience in Germany where sommer is in frequently founded in this year. This funny story haven’t ended yet.

After finishing my holiday for 5 nights in Barcelona, then I came back to Germany but I weared a minim clothes from Barcelona. I have forgotten that Germany is cold right now.

I was wearing a shorts. and After I arrived in Germany, and then I left the aeroplane, I was welcomed with 15 degree of celcius. So freaking cold outside I felt. .

More things I got from Barcelona that have already been teaching me an important life lesson :

” The true lesson is just able to be founded outside the university ”

because In University I just learn more theories but to applying its teories is absolutely outside your lectures.

for example : when I was staying at hostel. there I was learning about communication, social networking.

because I was meeting and cooking together with backpacker from around the world.

and  when I was buying some foods and managing time to my whole holiday, I was learning about controlling, and project management. Even more awesome things are just gotten in my holiday or outside my study.

For ending this story I just wanna tell that checking the local temperature before you wanna go elsewhere is very recommended and necessary too.

So, It’s my story thanks for reading.

Salam jalan2. .

Implementing Functional Budgets and Introduction of Beyond Budgeting in Alderly Ltd.

The budgeting process is a crucial component of management control systems (Accaglobal, 2017). Furthermore, Drury (2001: 283-284) added that budgets covers some purposes such as planning annual operations, coordinating the activities of the various parts of the organization, communicating plans to the various responsibility center managers, motivating managers to strive to achieve the organizational goals, controlling activities and evaluating the performance of managers.

To support Alderley Ltd for building their budgets because their accountant has suddenly resigned, I am assigned to provide the functional budgets for the forthcoming financial quarter which is different compared to the traditional incremental budgeting that the previous company accountant has historically used.

According to McKinney and Howard (1998: 365), traditional incremental budgeting is a budgeting approach that permits policy to continue indefinitely without scrutiny, which means the past becomes the present and future becomes the projection of the present, and it tells how much company spends and what it buys but not why. Further explanation was continued by Aicher, Paule-Koba and Newland (2016: 72) that incremental budgeting has benefits, for examples:

  • it has the same impact on programs and projects across the budget,
  • it is quick and easy,
  • the budget remains stable from year to year.

Nevertheless, they also added that this approach has also disadvantages, as follows:

  • it does not allow for a thorough examination of expenses to determine the extent to which they are in alignment with the company’s strategic goals,
  • there is pressure for managers to spend any money that is currently allocated, if they see that their future budget will be based on the current year.

While functional budgets represent quantitative and/or financial statements which are prepared prior by each functional area of the business to begin of a trading or operating period and they are applied to arrange the company’s objectives, activities as well as policies for the entire business (Bendrey, Hussey and West, 2003: 68).

Moreover, according to Kumar and Sharma (2000: 206), functional budgets represents various functions and depends on the size and nature of the business. They include sales budget, production budget (e.g.: raw material budget, labour budget, plant utilization budget), purchase budget, cash budget and finance budget.

Generally speaking, budgets are prepared for a specified time period. It can be a year, quarters, months or in some cases, weeks. Bendrey, Hussey and West (2003: 68) argued that the longer the period taken for planning purposes, the greater the difficulty in forecasting future performance. In this assignment, I am tasked to prepare functional budgets for the forthcoming financial quarter, January to March, see table 1 below.

To assess whether or not estimated investment of company would be generating benefits for forthcoming quarter, we are able to compute its Return on Investment (ROI) from January till March. ROI can be generated by dividing company’s profit from sales with company’s investment which is assets. In our case, our assets included the total 3-months budget for Raw Materials (£192,818), Labour (£381,600), Production Overheads (£104,940), Administration (£31,216) and Selling Overheads (£26,200). While our estimated revenue from sales from January till March is £327,500.

As a result, the ROI of this company would be about 45% so that it can be concluded that a positive percentage of ROI would be generating profits for this company. According to George and Franklin (1996: 5-6), ROI is a method to assess how well (or poorly) management performs and used by creditors and owners to assess the company’s ability to earn an adequate rate of return. Furthermore, managing directors can compare the ROI of this company to other companies/industries, because ROI provides financial information about a company’s financial health.

All these above described functional budgets had been through important stages in the budgeting process according to Drury (2001: 287-290), as follows:

  1. communicating details of budget policy and guidelines to those people responsible for the preparation of budgets;
  2. determining the factor that restricts output;
  3. preparation of the sales budget which is here important to have an accurate estimation of customers’ actions and to understand sales demand that might be influenced by the economic situation or the action of company’s competitors;
  4. initial preparation of different budgets (e.g.: Production, Raw Materials, Labour, Production Overheads, Administration, and Selling Overheads) which its preparation should be a “bottom-up” process and past data may be used as the starting point for producing the budgets;
  5. negotiation of budgets with superiors after being approved by the lowest level of management;
  6. coordination and review of budgets whether or not it is plausible and measurable;
  7. final acceptance of budgets which happens when all the budgets are in harmony with each other and they are summarized into a master budget that includes a budgeted profit and loss account, a balance sheet, and a cash flow statement;
  8. ongoing review of budgets is conducted as the final stage and here, the actual results should be periodically compared with the budgeted results. Moreover, in this final stage, the management should be able to identify the items that are not proceeding according to plan and to investigate the reasons for the differences.

Drury (2001: 291) also added that the budgetary process should be dynamic and continuous. In other words, it does not end for the current year once the budget has been generated.

From above description about budgeting process, we can also find some benefits, as follows:

  • Budgeting process or budget preparation process would help company to plan future activities;
  • it helps in coordination of various activities (e.g.: Sales and Production)
  • it helps to communicate between the lowest level of management to the top level of management regarding the expected level of activities, costs, revenues, profits, investments, etc. to the budget period.
  • it might become a motivational tool for everyone to put maximum efforts to realize the targets set in the budgets.
  • it allows the management continuously to monitor all activities have done to see whether or not everything goes as planned in budget.

In spite of several benefits, budget preparation process could be giving some disadvantages, for examples:

  • it would be costly for small firms to incur, because it requires a lot of time in decision making and in coordination between the lowest level of management and the top level of management.
  • Furthermore, a small company probably needs to spend extra money to hire experienced and specialized human resources in the field of management, analysis, and control.

According to Daum (2005), Nowadays, in the highly dynamic environment for companies, the concept of fixed budgets should be changed with the concept of Beyond Budgeting Management Model in order to become effective in a global economy with rapidly shifting market conditions and fast and nimble competitors because companies must be able to adapt constantly their priorities and have to aim their resources where they are able to bring most value for customers and shareholders. Moreover, Daum (2001) argued that an increase of complexity of company activities and internal dynamics occur so that the task of today’s companies is not only to produce and sell products, but also companies have to compete in a seller’ market and buyer’s market. In other words, they must keep bringing new products, keep doing very different things at the same thing with developing the right products (in the long-term), keep having good relationships with customers, employees, and business partners (medium-term), and keep operating their business profitably (short-term).

As we have known, the traditional incremental budgeting which does not cover all those aspects seems like inflexible and focusing only in company’s profit without seeing other aspects. Daum (2005) mentioned that Beyond Budgeting represents a management model that wants to overcome the restrictions of the traditional budget and aims to increase the adaptability of companies. Furthermore, Charifzadeh and Taschner (2017: 151) added that Beyond Budgeting is also a concept which postulates the complete elimination of traditional budgets, and instead recommends a flexible system of planning and control based on employee empowerment and market-like coordination.

Beyond Budgeting has several characteristics according to Kaplan Financial Knowledge Bank (2012), as follows:

  • Rolling budgets, based on every quarter or every month, becomes the main alternative to annual budgeting;
  • The rolling forecasts will embrace Key Performance Indexes (KPIs) based on the concept of balanced scorecards which is according to Kaplan and Norton (1996: 47) defined as concept that can tell the story of the company’s strategy, starting with the long-run financial objectives, and then linking them to the sequence of actions that must be taken with financial processes, customers, internal processes, and finally employees and systems to deliver the desired long-run economic performance;
  • The budget may also incorporate benchmarking connecting managers’ targets to external benchmarks and not past performance;
  • Focus efforts on managing future results and not explaining past performance;
  • Allow operational managers to react to the environment;
  • Encourage a culture of innovation.

According to bbrt.org (2016), a key element of Beyond Budgeting is alignment between leadership principles and management processes, as seen in figure 1 below, which is also explaining about the 12 beyond budgeting principles.

Kaplan Financial Knowledge Bank (2012) found some advantages of the beyond budgeting model, as follows:

  • By giving clear responsibilities and challenges, it motivates individuals;
  • It establishes customer-oriented teams;
  • Its focus has changed from beating other managers to beating the competition;
  • It establishes information systems which provide fast and open information throughout the Organisation;
  • Authority is transferred to operational managers who are closer to the action so that they are able to react quickly;
  • Operational managers are given more authority to deliver key ratios rather than keep to strict budget limits.

Nevertheless, companies which applied beyond budgeting should consider its consequence that a cohesion between leadership principles and management processes should be in harmony in order to avoid risk of having disconnects between what is said and what is done, which is able to be poison to any organization (bbrt.org, 2016).

To conclude this this essay, I would like to suggest John to consider the beyond budgeting approach which would be more appropriate and complete in the current turbulent economic environment where market conditions are rapidly shifting, and an emergence of nimble competitors is forcing his company to adapt constantly what customers and shareholders need. Beyond Budgeting offers what traditional incremental budgeting does not have and it refers to the concept of balanced scorecards which covers 4 perspectives (financial, customer, internal business process and employees). In other words, Beyond Budgeting is concentrated not only in producing and selling products, but also it concerns other perspectives (e.g.: customers, employees, business partners and shareholders) so that it would increase the adaptability of his company in the future.

Works cited:

Accaglobal. (2017). Comparing Budgeting Techniques (Incremental v ZBB). [Online] Available: http://www.accaglobal.com/ie/en/student/exam-support-resources/fundamentals-exams-study-resources/f5/technical-articles/comparing-budgeting-techniques.html  [Accessed: 19.10.2017].

Aicher, T. J.; Paule-Koba, A. L.; and Newland, B. L. (2016). Sport Facility and Event Management. Massachusetts: Jones & Barlett Learning.

bbrt.org. (2016). The Beyond Budgeting Principles. [Online] Available: https://bbrt.org/the-beyond-budgeting-principles/  [Accessed: 12 October 2017].

Bendrey, M.; Hussey, R.; and West, C. (2003). Essentials of Management Accounting in Business. New York: Continuum.

Charifzadeh, M. and Taschner, A. (2017). Management Accounting and Control: Tools and Concepts in a Central European Context. Weinheim: Wiley-VCH.

Daum, J. H. (2001). Beyond Budgeting: A Model for Performance Management and Controlling in the 21st Century? [Online] Available: http://www.juergendaum.de/articles/beyond_budgeting.en.pdf  [Accessed: 25.10.2017].

Daum, J. H. (2005). Beyond Budgeting. [Online] Available: http://www.juergendaum.com/bb.htm  [Accessed: 25.10.2017].

Drury, C. (2001). Management Accounting for Business Decisions. 2nd Edn. London: Thomson Learning.

George, T. F. and Franklin, J. P. (1996). Understanding Return on Investment. New York: John Wiley & Sons, Inc.

Kaplan Financial Knowledge Bank. (2012). Beyond Budgeting. [Online] Available: http://kfknowledgebank.kaplan.co.uk/KFKB/Wiki%20Pages/Beyond%20Budgeting.aspx  [Accessed: 12 October 2017].

Kaplan, R. S., & Norton, D. P. (1996). The balanced scorecard: translating strategy into action. USA: Harvard Business Press.

Kumar, A. and Sharma, R. (2000). Principles of Business Management. New Delhi: Atlantic Publishers and Distributors.

McKinney, J. B. & Howard, L. C. (1998). Public Administration: Balancing Power and Accountability. 2nd edn. London: Greenwood Publishing Group, Inc.