Budget Advantages And Disadvantages

1569 Words7 Pages
I Introduction A budget is part of management control designed to provide support to critical functions within an organization and it assist the organization to establish how to effectively and efficiently utilize its resources. The success of budgeting system is dependable on the attitude and acceptance by employees affected by it. It is important for any organization to have a budget control system and to establish the impact it has a on the employee behavior such as their motivation and dysfunctional behavior, therefore it is important that the organization’s management and its employees have a general agreement on the budgetary control system to ensure a great success in the implementation of it. Advantages and disadvantages of budgetary…show more content…
Experienced and motivated workers already know what to do and it will be difficult for them to be told what to do. • Lack of communication: Autocratic leaders don’t inform others about what It is happening. They prefer to give workers tasks to do. Consultative Management Style A consultative style is a type of leadership where the leader presents an issue and some parameters to others but does not tell them what to do rather how to get it done. However the manager or leader still have the final say and makes the final decision. A consultative management style can be viewed as a combination of participative and autocratic due to the fact that consultative managers will ask views and opinions from their staff, allowing them to feel involved but will ultimately make the final decision. For example in a computer software engineering Company the manager can give the problem of codding a program to the employees without interacting with them and after they finish with the codding they present It to the manager who will decide. Advantages • Build strong teams: the team becomes strong and united working together. There are more ideas and opinion given and all are taken into…show more content…
The latter does not want any inputs from workers in the implementation of a system of budgetary control. They are not allowed to give their opinion regarding the implementation. Another reason for their refusal is they are not motivated to participate in the new system. With the top management who want to take complete control of the introduction of the budgetary control system and imposing it to the workers, they become less or not motivated. Moreover the budgets will be compared against actual performances on a monthly basis and budget variances computed. This new budget target levels is not fair and does not please the workers. Furthermore, promotions and increases to employees will be linked to the department performance meaning If the department performs poorly because an employee did not do his/her job properly or natural causes like flood, all employees in that department will not get a raise in their salaries or promotions. Last but not least reason is there will be no extra payment to reward employees’ performance because they are expected at all times to give

More about Budget Advantages And Disadvantages

Open Document