Mod # 5 DF Dec 20 What is participative budgeting? What are its potential benefits? What are its potential disadvantages? What is budgetary slack? What incentive do managers have to create budgetary slack? 1. Participative budget : The budgeting approach in which managers prepare their own budget estimate is called participatory budget. This approach is really important if the budget is to be used to control and evaluate a manager's performance. This is one of the most important methods of budget preparation.Managers at all levels participate and co-ordinate in the budgeting process. Advantages : 1) Individuals at all levels of organization are recognized as members of the team whose review and judgements are values by the top management. 2) Budget estimates prepared by front line managers can be more accurate than estimates prepared by top level managers. 3) Motivation is highly important when an individual is particiapting in setting his or her own goal then when the goals are imposed from above. 4) Has the advantage of transferring information from the subordinate to their
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