How Strategic Plan Affect Organization's Budget Essay (Essay Sample)

Organization Budget
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Organization Budget 
Budgeting remains a critical function for organizations, including those in the health sector. It has served a significant role in realizing overall company goals and objectives. For this reason, it is a familiar discussion topic whenever stakeholders draft strategic plants, which they plan to implement. It is against this associations' backdrop that a strategic plan and budget directly affect one another in different ways.
 The budget allocates resources necessary to develop and execute an organization's strategic plan. Often, the budgeting process allows all departments to submit their estimated monetary needs to run the current year's activities. For example, a medical facility's budgeting team may include expected financial requirements to develop and effectively execute the establishment of a new branch in a different location. In this case, it would be impractical to spend on this project by diverting funds allocated for other commitments like employee salaries if no communication was made beforehand regarding the new branch's anticipated development and rollout. This assertion is also true according to Pollanen et al. (2017), adding that budget is vital in deciding the most appropriate strategy based on priority. 
On the other hand, a strategic plan impacts the budget by highlighting the various cost centres and criteria for achieving them. Shapoval (2017) asserts that a strategic plan defines a company’s directions and expectations, influencing its budget size and supporting it. Using the case in which a hospital wishes to expand its geographical presence by opening new branches, a profound and reliable strategy extends to propose how to meet future budget needs. Thus, a weak strategic plan causes budget constraints within an entity by failing to suggest various ways of meeting the budget needs, leading to budget deficits. Similarly, a good strategy highlights the long-term benefits, which may increase the overall organizational budget.
In conclusion, the relationship between strategic plan and budget is eviden