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Budgeting





                           Approaches to budgeting





               6.1   Budgeting and participation


                                     Top down                                    Bottom-up
                                     budgeting                                    budgeting
                                (non-participative)                             (Participative)

                                     imposed


                  Imposed on budget holder by  senior             Divisional managers set the budget
                 managers




                      Avoids dysfunctional behaviour                 More realistic budgets

                       and budgetary slack
                                                                      Improved motivation
                      Quick
                                                                      Improved divisional managers’
                      Senior managers retain control                  understanding

                      Senior managers understand                     Frees up senior managers’ time

                       needs of whole organisation




                  Illustrations and further practice



                  Now TYU 4 from Chapter 8.


















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