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Operational Framework

With the assumption that budgeting application has significance in Liliw, Laguna’s

footwear industry, a diagram below has been developed to further elaborate the operational

framework of the study. This framework merges the a) Independent variable which is budgeting

and b) dependent variable, the footwear business’ financial performance.



 Improved Communication

 Accountability

 Financial Control of Inputs

 Planning and Coordination

1. Contributions of Budgeting

Application on Growing Activities Financial Performance

 Efficiency Measures  More Profits

 Effectiveness in  Growth

implementation  Control

 Commitment

 Planning and Coordination

1. The relationship between the role of

budgeting and financial performance

 Financial Planning and

Business Control

 Productivity (outputs &

In the conceptual framework approach, which has its key issues as the historical and

institutional basis of the functioning of budgeting and the institutional characteristics that arise in

affecting the financial performance (planning, controlling of allocation of resources, improved

communication and policy outcomes), is the most appropriate framework. A micro-conceptual

analytical framework prepared was used to study situations that reflect precisely the salient

relationship of the variables within which, operated during the study. The variables are defined

as role of budgeting; contributions of budgeting on financial performance, the relationship

between budgeting and financial performance. The type of relationship they generate play a

pivotal role in structuring both strategic planning.

The main strength of the conceptual framework is that it strives to capture the specificity

about the realities of the role of budgeting where it looks at the management of ongoing activities

after budgeting, the efficiency measures and effectiveness in implementation. This means that

budgeting has a relationship with financial performance. The conceptual framework shows that,

the variables had a significant impact on the budget usage, characteristics and financial

performance. Budgeting as seen in the figure above is assumed to influence on the financial