From the perspective of corporate management,the use of budgetary slack (CMA adapted)

Question

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From the perspective of corporate management, the use of budgetary slack increases the likelihood of inefficient resource allocation because it involves intentionally underestimating revenues or overestimating expenses, resulting in excess funds being allocated to certain areas while other areas may not have enough resources. This can lead to inefficiencies and waste of resources. Therefore, it is not an effective strategy for corporate planning or identifying potential budget weaknesses. Effective corrective actions would involve addressing the root causes of budget weaknesses and finding ways to optimize resource allocation.

From the Perspective of Corporate Management,the Use of Budgetary Slack