Is completed into four quarters into four quarters 7

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Unformatted text preview: completed. into four quarters. into four quarters. 7-7 Self-Imposed Budget Top M anagem ent M id d le M anagem ent S u p e r v is o r S u p e r v is o r M id d le M anagem ent S u p e r v is o r S u p e r v is o r A self-imposed budget or participative budget is a budget that is prepared with the full cooperation and participation of managers at all levels. 7-8 Advantages of Self-Imposed Budgets 1. Individuals at all levels of the organization are viewed as 1. Individuals at all levels of the organization are viewed as members of the team whose judgments are valued by top members of the team whose judgments are valued by top management. management. 2. Budget estimates prepared by front-line managers are 2. Budget estimates prepared by front-line managers are often more accurate tthan estimates prepared by top often more accurate han estimates prepared by top managers. managers. 3. Motivation is generally higher when individuals participate 3. Motivation is generally higher when individuals participate iin setting their own goals than when the goals are n setting their own goals than when the goals are iimposed from above. mposed from above. 4. A manager who is not able to meet a budget imposed 4. A manager who is not able to meet a budget imposed ffrom above can claim that it was unrealistic.. Self-imposed rom above can claim that it was unrealistic Self-imposed budgets eliminate this excuse. budgets eliminate this excuse. 7-9 Self-Imposed Budgets Self-imposed budgets should be reviewed by higher levels of management to prevent “budgetary slack.” Most companies issue broad guidelines in terms of overall profits or sales. Lowerlevel managers are directed to prepare budgets that meet those targets. 7-10 Human Factors in Budgeting The success of a budget program depends on three important factors: 1.Top management must be enthusiastic and committed to the budget process. 2.Top management must not use the budget to pressure employees or blame them when something goes wrong. 3.Highly...
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