The budget process in a hotel - A case study of Novotel

Abstract

Background and problem: There has been a lot of discussion about the relevance of the budget but so far most companies choose to have one. The reason for a budget is to plan and coordinate a company. A company could use the budget as a tool of control to direct departments. For Novotel the budget is an important tool for steering. The fields of application of budget are many and its purpose could vary a lot due to how it’s used in the companies. The managements acting in the use of budget as a tool of steering are very important. It is necessary for the management to have the employees trust. In many companies the budget is processed with the help from managers without a discussion with the involved departments whether it is reasonable or not. The budget is usually based on last years outcome of sales and little consideration is taken to the department’s judgement during the operational year. Purpose: The purpose of this thesis is to survey and analyse the process of budgeting at Novotel. The authors will also make a survey of analyse how the budget are experienced by the different departments that we have investigated. Delimitations: We have chosen to investigate only one company. We wish to point out that this case study can’t be related to other companies. Method: We have chosen to make a case study about the budget process at Novotel. This thesis is based on a qualitative approach. We have mainly used two ways to collect the information we need to be able to reach our purposes. We have chosen to collect the most important information through interviews with persons at the company that we have selected. Result and conclusions: The thesis gives a detailed survey of the budget process in Novotel and how it is planned, implemented and followed up. It also shows that there are great differences in how the management and the heads of the departments experience budget. Suggestions for further studies: We suggest further studies with direction in the area of business without budget.