What is the difference between an imposed budget and a participatory budget?

What is the difference between an imposed budget and a participatory budget?

Unlike the imposed budgeting. It starts at the top, where the budget is prepared by senior management process, participative budgeting shares the responsibility with lower-level managers to give them a sense of ownership in the business.

What is an imposed budget?

Imposed budgeting is a top-down process where executives adhere to a goal that they set for the company. Managers follow the goals and impose budget targets for activities and costs.

What is the difference between participative and top-down budgeting techniques Which method do you think is the best for budgeting and why?

In Top-Down Budgeting, managers give resources for the different departments. However, participative budgeting follows the bottom-up approach. The departments tell their needs to the management by deciding own standards.

What is participation budget?

What is Participative Budgeting? Participative budgeting is a process under which people impacted by a budget are actively involved in the budget creation process. This approach gives lower-level managers a greater sense of ownership in the resulting budget.

What are the advantages of a self imposed budget?

The advantages of a self-imposed or participatory budget can include: The creation of a team environment where everyone knows their views and judgements are valued by company management.

Which of the following is an advantage of zero based budgeting?

The major advantages are flexible budgets, focused operations, lower costs, and more disciplined execution. The disadvantages include the possibilities of resource intensiveness, being manipulated by savvy managers, and bias toward short-term planning.

What are the 4 phases of the budget cycle?

The budget cycle consists of four phases: (1) prepara- tion and submission, (2) approval, (3) execution, and (4) audit and evaluation.

Which of the following is an advantage of top-down budgeting?

Advantages of Top-Down Budgeting Top-down budgeting saves time for lower management. Rather than spending time creating a budget from scratch, lower-level managers are given an already-formulated budget to implement. This saves both time and resources that the managers would’ve had to use to formulate the budget.

What is the master budget?

The master budget is the aggregation of all lower-level budgets produced by a company’s various functional areas, and also includes budgeted financial statements, a cash forecast, and a financing plan.

Who are the budget participants?

Preparation of the budget tends to involve just about anyone of importance who is associated with a nonprofit entity, including community representatives, funding sources, and regulatory agencies. These external parties have different backgrounds and often have different budget expectations.

What are the disadvantages of self imposed budget?

Budget estimates prepared by lower-level managers should be scrutinized by higher levels of management. Without such a review, self imposed budgets may be too loose and allow much “budgetary slack.” The result will be inefficiency and waste. All level of an organization should work together to produce the budget.

Which is the best definition of participative budgeting?

Participative or Self imposed budgeting is an ideal budgetary process. However most companies deviate from this ideal budgetary process. Typically top managers initiate the budget process by issuing broad guidelines in terms of overall target profits or sales.

Is there no commitment in participatory budgeting?

Without involvement, there is no commitment. Mark it down, asterisk it, circle it, underline it. No involvement, no commitment. [1] Participatory Budgeting (PB) is the process that Lean Portfolio Management (LPM) uses to allocate the total portfolio budget to its value streams.

What is the role of participatory budgeting in LPM?

Participatory budgeting (PB) is a dynamic, collaborative process that enables LPM to gather the data and build the consensus required to invest in the best possible solutions. It’s a critical element of LPM and is used to establish Lean value stream budgets.

Which is the best definition of self imposed budgeting?

The budgeting approach in which managers prepare their own budget estimates is called self imposed budgeting or participatory budgeting. This is generally considered to be the most effective method of budget preparation. Managers at all levels participate and coordinate with each other in budgeting process.