Incremental budgeting has two key flaws: first, it is difficult to relate the budget to specific goals and plans and second, corporate priorities may get lost in the shuffle.

Question

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Incremental budgeting, which typically involves adjusting previous budgets with a fixed percentage, can indeed make it difficult to align the budget with specific strategic goals and can also lead to a situation where changing corporate priorities are not adequately reflected, as it often emphasizes past spending patterns over current strategic objectives.

Incremental Budgeting Has Two Key Flaws: First, It Is Difficult