Budgets help managers assess strategic risks and opportunities by providing them with feedback about the likely effects of their strategies and plans.

Question

Quizplus · Accepted Answer

Budgets provide a framework for managers to assess whether their strategic plans and decisions are feasible, profitable, and aligned with their goals. By comparing actual performance with budgeted figures, managers can determine whether they need to adjust their course, reallocate resources, or take corrective actions. Budgets also facilitate communication, coordination, and accountability among different departments and stakeholders, as they clarify expectations, priorities, and responsibilities. Thus, budgets can help managers identify, assess, and address strategic risks and opportunities, by generating timely and reliable feedback about the impact of their actions on the organization's financial and operational performance.

Budgets Help Managers Assess Strategic Risks and Opportunities by Providing