3. Managers would prefer a budget prepared______________________________. (Points : 1)
by the budget committee
utilizing the top-down approach
utilizing the bottom-up approach
utilizing none of the methods listed here
Managers would prefer a budget prepared utilizing the top-down approach.
To understand why managers would prefer this, first let's explain what the top-down approach means in budgeting. The top-down approach is a method of budgeting in which the budget is created by senior management or a budget committee and then distributed down to lower levels of the organization. In this approach, the budget is based on overarching goals and objectives set by the upper management.
Now let's consider why managers would prefer this approach.
1. Efficiency: The top-down approach allows for faster budget preparation because the overall budget is set at the top level and then cascaded down to departments or teams. This saves time and streamlines the budgeting process.
2. Alignment with goals: Since the budget is based on the goals and objectives set by senior management, the top-down approach ensures that the budget is aligned with the strategic direction of the organization. This helps to maintain consistency and focus in resource allocation.
3. Decision-making authority: In the top-down approach, managers at each level have the authority to make decisions within their allocated budget. This allows for flexibility and autonomy while still adhering to the overall budget guidelines.
4. Coordination and control: The top-down approach enables better coordination and control within the organization. Senior management can oversee the budgeting process and ensure that all departments and teams are working towards the same goals, which promotes collaboration and accountability.
Overall, managers prefer the top-down approach to budgeting because it offers efficiency, alignment with goals, decision-making authority, and improved coordination and control.