Research Of Budgeting Based On Value Chain Theory

In order to gain the most benefits with limited resources, budget has become the most important one among management tools. These years, with the development of the society and economy, the great changes of operating environment take place inside and outside of enterprise. On one hand, the science and technology are developed and used widely, which causes the cost structure of product has substantive change,on the other hand, the diversification and individuation of demand give the chance and challenge to the company. At the same time, the shortages of traditional budget came out gradually like deviating enterprise's strategies, assigning resources unreasonably, be not helpful for business process reengineering and so on. Using traditional budget method is not appropriate any more. Thus, it is necessary to make some improvements to the traditional budget. In order to solve these problems all above, budget based on value chain theory turns up.This article put value chain theory and budget together trying to develop budget with value chain analysis. The function of value chain analysis is to find and develop company's valuable activities, get rid of the worthless activities, and improve business process. With help of value chain analysis, corporate budge will allot resources reasonably, set targets to ordinary running, improve company's ability of competition, provide detailed activity information for the operation management and maximize company's value. And this article focus on how to make the budge based on value chain theory.The first chapter introduces the background, the purpose of study, the present research and the framework of article.The second chapter introduces the concept of traditional budget and describes it's content and shortages.The third chapter introduces the background and meaning of Value-Chain-Based Budget. The value chain theory and the changing of economic environment is the background of Value-Chain-Based Budget. And Value-Chain-Based Budget is a detailed plan for getting and allotting resources and running company's business. Its characteristics are that it's a total budget, it's guided by company's strategy, it's motivated by value and it can harmonize the relationship of departments.The fourth chapter introduces some basic information about Value-Chain-Based Budget including its content, the way of budgeting and the process of budgeting.The fifth chapter describes how to budget in more details according to the process of budgeting introduced before.The sixth chapter compares these two ways of budgeting and shows the differences and similarities between them. At last, it explores how to integrate these two ways in operation.