Financial & Managerial Accounting 17th Edition by Jan Williams ,Susan Haka,Mark Bettner,Joseph Carcello

Exercise 43

Budgets are essential for the successful operation of an organization. Finding the resources to implement budget goals requires extensive use of human resources. How managers perceive their roles in the budgeting process is important to the successful and effective use of the budget as a tool for planning, communicating, and controlling operations.
Discuss the implications for planning and control when a company's management employs an imposed budgetary approach where managers do not actively participate in setting the budget. Contrast this approach with a participative budgetary approach. How does communication work differently when using an imposed versus a participative budgetary approach?