Which statement highlights a potential problem of participative budgeting?

Question

Quizplus · Accepted Answer

Participative budgeting can lead to the introduction of budgetary slack, as managers may overstate their budgetary needs to ensure that their target is easily achievable. This can lead to inefficient resource allocation and an overall decrease in organizational performance. Therefore, participative budgeting should be designed appropriately to avoid this potential problem.

Which Statement Highlights a Potential Problem of Participative Budgeting