Relationship between adoption of best budgeting practices and profitability in private hospitals in Nairobi County
Budgeting has been considered as an integral element of management control systems. The changes in external environment are uncontrollable and require the budgeting practices to keep paces with the recent developments. The current research intends to establish the extent of adoption of best budgeting practices in private Hospitals in Nairobi County and gain a deeper understanding of how budgeting practices impacts on financial performance. The research design used was descriptive survey study. A census of 28 medium and large private hospitals in Nairobi County was surveyed. The researcher used primary data which was obtained through self-administered questionnaire with closed and open –ended questions. The data analysis method used was based on quantitative approach using descriptive statistics. The analyzed data was presented in tables and bar chart. The study established that there is partial adoption of best budgetary practices. The extent of adoption of individual best budgeting practices varies. Participation of managers in the budgeting process and long-term goal of budget rank highly. The study indicates less adoption of technology in the budgeting process. Secondly, the study established that, the degree of adoption of best budgetary practices positively impact on financial performance. The researcher recommends that private hospital adopt best budgetary practices to enhance financial performance. In particular the hospitals need to embrace technology in budgeting process, as this was noted as the least adopted practice from the study.