A study of Saudi Arabia banking industry.
An empirical investigation to identify the relationship between budgeting and the financial performance of the companies. A study of Saudi Arabia banking industry.
- Context
Saudi Arabia is known as the wealthiest country in the Arab region, and it is the largest country in all over the Middle east. The policies of Saudi Arabia are highly effective, and the significant proportion of giant scale public works have owned by the Saudi Arabia regulatory authorities. Similarly, the considerable inflow of foreign direct investment has made the economy of Saudi Arabia stronger and the financial and banking system of Saudi Arabia also positively effect. The soundness of financial and banking system of Saudi Arabia gave the “wings to fly” and enjoy the ranking of being number one at the regional level and to be the largest economy in all over the world. Moreover, the main emphasis of Saudi Arabia economy is on the oil industry. The GDP of Saudi Arabia mainly linked with real oil growth (Nordea, 2020). This highlight evident the soundness of the banking industry of Saudi Arabia. The banking industry has evolved from many years and opens the new chapter for the economic success of Saudi Arabia. For this purpose, the relationship of budgeting will evaluate the financial performance of the banking industry of Saudi Arabia.
- Purpose
Budgeting control always plays an essential role in clarifying accountability for organizations in any country. This also considered as the vital tool of management and assist the companies in improving their financial performance and plays the significant role in strengthening the country’s economy(Franklin, Graybeal, & Cooper, 2019). Moreover, the accurate budgeting in the organization helps the company to meet its organizational goals more attentively.
- Significance
Accurate decisions in an organization always lead to organizational long term growth. The significant challenge is to effectively manage the financial and non-financial resources to improve the financial performance of the organization. This challenge is challenging to cope up without taking the budgeting practices into action. Budgeting sketch the clear picture to the organization where it stands out and what it needs more to attain its desired goals. If the organization does not consider the budgeting as a mandatory tool for effective accounting practices, it leads to the bankruptcy of the organization(Hussei, Salih, & Panda., 2016)
- Research question
The research question of the study are;
- Do the budgeting and financial performance of the banking industry of Saudi Arabia have a healthy relationship?
- How budgeting impacts the financial performance of the banking industry of Saudi Arabia?
- Research hypothesis
The research hypothesis is;
Ho: Budgeting and the financial performance of the banking industry of Saudi Arabia do not tie-up with a significant relationship to each other.
H1: Budgeting and financial performance of the banking industry of Saudi Arabia engaged in a significant relationship with each other.
- Research framework
