In which situation is an imposed (top-down) budget most likely to be appropriate?

Correct answer: A) A newly formed business in which operational managers have little experience of budgeting

Explanation

Imposed budgets are more suitable where operational managers lack budgeting skills, in very small or new businesses, in times of crisis, or where senior management needs tight control. Where managers have good local knowledge and commitment matters, or in decentralised organisations, participative budgeting is usually preferred.