A Study on the Use of Zero-Based Budgeting for Cost Control at Kirloskar Brothers Limited, Nagpur

Abstract

Zero-Based Budgeting (ZBB) serves as a powerful tool for organizations to manage and control costs by scrutinizing all expenses from the ground up, regardless of previous budgets. Kirloskar Brothers Limited, located in Nagpur, implemented ZBB to optimize its cost structure and improve operational efficiency. This study explores the practical application of ZBB at Kirloskar Brothers, focusing on how the company adopted this method to systematically allocate resources, prioritize projects, and evaluate the effectiveness of spending. By involving all departments in the budgeting process, ZBB empowers managers to make data-driven decisions, ensuring that funds are directed toward high-priority initiatives. The research examines the challenges faced during the ZBB implementation, such as resistance to change, time consumption, and the requirement for detailed documentation. However, it also highlights the significant benefits, including increased transparency, improved financial discipline, and the elimination of unnecessary expenditures. The findings suggest that while ZBB is time-intensive and requires a cultural shift within the organization, it proves to be highly effective for companies aiming to maintain tight control over their costs, especially in industries where cost management is a critical success factor. This paper contributes valuable insights into the role of Zero-Based Budgeting in fostering financial prudence and its impact on decision-making at Kirloskar Brothers Limited.