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Cornerstones of Cost Management 2nd Edition by Don Hansen ,Maryanne Mowen
Edition 2ISBN: 978-1111824402Cornerstones of Cost Management 2nd Edition by Don Hansen ,Maryanne Mowen
Edition 2ISBN: 978-1111824402 Exercise 48
Participative versus Imposed Budgeting
An effective budget converts the goals and objectives of an organization into data. The budget serves as a blueprint for management's plans. The budget is also the basis for control. Management performance can be evaluated by comparing actual results with the budget.
Thus, creating the budget is essential for the successful operation of an organization. Finding the resources to implement the budget-that is, moving from a starting point to the ultimate goal-requires the extensive use of human resources. How managers perceive their roles in the process of budgeting is important to the successful use of the budget as an effective tool for planning, communicating, and controlling.
Required:
1. Discuss the behavioral implications of planning and control when a company's management employs: (a) an imposed budgetary approach, and (b) a participative budgetary approach.
2. Communications plays an important role in the budgetary process whether a participative or an imposed budgetary approach is used.
a. Discuss the differences between communication flows in these two budgetary approaches.
b. Discuss the behavioral implications associated with the communication process for each of the budgetary approaches. ( CMA adapted )
An effective budget converts the goals and objectives of an organization into data. The budget serves as a blueprint for management's plans. The budget is also the basis for control. Management performance can be evaluated by comparing actual results with the budget.
Thus, creating the budget is essential for the successful operation of an organization. Finding the resources to implement the budget-that is, moving from a starting point to the ultimate goal-requires the extensive use of human resources. How managers perceive their roles in the process of budgeting is important to the successful use of the budget as an effective tool for planning, communicating, and controlling.
Required:
1. Discuss the behavioral implications of planning and control when a company's management employs: (a) an imposed budgetary approach, and (b) a participative budgetary approach.
2. Communications plays an important role in the budgetary process whether a participative or an imposed budgetary approach is used.
a. Discuss the differences between communication flows in these two budgetary approaches.
b. Discuss the behavioral implications associated with the communication process for each of the budgetary approaches. ( CMA adapted )
Explanation
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1.Discuss the behavior implications:
Th...
Cornerstones of Cost Management 2nd Edition by Don Hansen ,Maryanne Mowen
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