CAF-7 · Chapter 11 · Question 2 of 15
Which of the following is a classic behavioral consequence of 'top-down' (imposed) budgeting rather than 'bottom-up' (participative) budgeting?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Lower level managers may feel demotivated and lack commitment to targets they had no part in setting
Explanation
In a top-down budgeting approach, targets are imposed by senior management. A major drawback is that operational managers often feel demotivated and lack ownership of the budget because they were excluded from the target-setting process.
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