Disadvantages Of Zero Based Budgeting

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Introduction Zero Based Budgets (ZBB), the terminology was originally introduced in 1970 by Peter A. Phyrr in the Harvard Business Review. In 1970s Jimmy Carter announced the idea of zero based budgeting to the federal government and it was largely considered a success in Congress in 1977. After this it became use more commonly budgeting. ZBB seeks to overcome the deficiencies of incremental budgeting. This approach requires that projected expenditure for existing activities should star from base zero rather than the last year’s budget. It focuses on programmers or activities instead of function departments. It is best suited to discretionary costs and support activities and has mostly been applied in municipal and government organizations.…show more content…
SCCYS need rank process to decide which packages are accepted. Three package have same fixed cost that three salaried staff and total monetary costs HKD500,000. Package 2 can provide 30000 booklets to the teenager, but only provide the information from the books and the teenager cannot get the actual practice. Package 2 is not selected has not much impact for achieving the project goal. Both Pachage1 and pachage3 not only provide a lot of the information to the teenage but also give them oppertunities to practice. From package 3 teenager can learn the knowledge and still of the work of six different industries. If package 3 is not be implemented, the teenager may lost the changes to knew the knowledge about the 6 kinds Industries in short time. Package1 provides the change to teenager work in the company, they obtain real working experience, and learn how to communicate with people when they work in actual community. They have sufficient time of practicing due to they can work in every working day during the half year. In addition, the HKD270,000 transportation subsidy helping poor teenager reduce the economic burden. Package1 can best achieve the original purpose, and it efficient allocation of the resources. If this package do not adopt, the biggest benefit will not be…show more content…
The project of the activity is first time to implement, not any past information can be used by traditional budgeting to plan the budget. In traditional budgeting, the committees will not find the cost effective ways for improve the project but in ZBB, committee of HKCSS could find the cost effective ways through rink the decision packages, for bring the biggest benefit to the teenager. Problems could arise at HKCSS by introduction of ZBB The main problem of ZBB is the amount of work associated with generating the decision packages and then reviewing them. The committee of HKCSS should spend a lot of time to do the research of the projects, collect and analysis so much information. After the decision packages are developed, they need to define, review and ranking them and it is so difficult. Moreover, the training cost will be increased due to ZBB must be clearly understood by staff of committee at various levels to be successfully

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