502) Budgets are necessary to establish whether or not Morgan Publications is meeting financial goals as well as allocating funds for future endeavors. By establishing monetaryconstraints, Valerie Morgan can establish which businesses are making money and which businesses are losing money. The results of comparing budgets to actual expenses also indicate areas that should be increased or decreased over the budgeted amount. (Mosely et al. 1996, 503) This information can also be used in the performance appraisal system for Morgan Publications. Currently, Morgan Publications has no performance appraisal system for the department managers. (Turner & Stevenson 1986, 777) Valerie Morgan simply allots a 15 to 20 percent upside in compensation for people who perform well. (Turner & Stevenson 1986, 777) However, this is difficult because there are no quantifiable performance standards to measure each managers actual performance. (Mosely et al. 1996, 498) From the department managers perspective, they collectively agree that the budget and accompanying goals are not linked to their performance appraisal or compensation. (Turner & Stevenson 1986, 779) By establishing guidelines and linking them to the appraisal process, Valerie Morgan instills in her managers a clearly defined purpose in providing the operating information she needs and currently finds so difficult to obtain.The Big PictureValerie realizes that she desperately needs more controls and stronger management. The problem is finding that person who will be accepted by Valerie and the department managers. (Greiner 1972, 42) However, once the manager has been selected and the above mentioned controls set in place, Morgan Publishing will achieve growth and direction because: (1) Valerie will be able to focus her energies on new ideas; (2) department managers will be able to function better with well defined goals that do not encroach on their autonomy; and (3) the small busines...
