An investigation on the effects of using variance analysis as a tool for financial performance: case of Paramount Garment Works
- Author
- Tawonezvi, Belinda
- Title
- An investigation on the effects of using variance analysis as a tool for financial performance: case of Paramount Garment Works
- Abstract
-
The purpose of this research was to investigate the relationship between variance analysis technique and organizational performance. Paramount Garment Works has been facing significant budget variances due to ineffective variance analysis, resulting in repeated overspending and underspending by the organization. This challenge motivated the conduct of this study. The objectives of the research were to investigate the effect of variance analysis on enhancement of the financial performance, assess the effectiveness of variance analysis on enhancement of financial performance, To identify the benefits of using variance analysis as a tool for enhancement of financial performance and to determine challenges associated with using variance analysis to enhance financial performance. A descriptive research design was employed to gather the research data. 36 questionnaires were administered and interviews were carried out. The major findings were that the effects of using variance as a tool for financial performance are profit maximisation, facilitates business growth, expenditure tracking and operational costs; enhance employee motivation and forms base for performance evaluation. Variance analysis system is effective on enhancement of financial performance an organisation only when the external factors such as the prices of competitors, political stability and inflation are reduced to its lowest. Also when the organisational structure and culture supports the implementation and use of variance analysis within the organisation, the use of variance analysis will be effective and enhance financial performance. The management should engage into proper recruitment process and training of employees so as to reduce errors during the production which reduces negative variances, thus aiding to better financial performance.
- Date
- 2023
- Publisher
- BUSE
- Keywords
- Variance analysis technique
- Organizational Performance
- Supervisor
- N/A
- Item sets
- Department of Accountancy