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Accounting For Managers (Budgets (Main steps in the budgeting process…
Accounting For Managers
Budgets
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Authoritarian budgeting
senior management simply sets the targets and the budget for unit managers. In this case, the unit managers have little say in the targets that are set and may have an influence over the motivation of the unit manager.
Participative bugdeting
Targets and budgets are arrived at by a process of discussion and negotiation between senior management and unit managers. In this case, the unit managers are seen to have had a say in the setting of targets and the budget and consequently managers are more likely to adopt ownership of the targets and the budget.
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Business Planning
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Disadvantages
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can rely on outdated, limited or biased information
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expensive, time-consuming
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