a) Explain the advantages and disadvantages of different styles of budgeting. (3 marks)
b) In his study of the impact of the budget on People Argyris reported inter alia the following comments by a financial controller on the practise of participation in the setting of budgets in his company. We bring in the Supervisors of budgets areas, we tell them that we want their frank them just sit there and nod their head. We know they’re not coming out with exactly how they feel. I guess budgets scare them.’
Suggest reasons why managers may be reluctant to participate fully in setting budgets, and suggest also unwanted side effects which may arise from the imposition of budgets by senior managements. (4 marks)
You work for a large multinational company which manufactures weed killers. It has been decided to introduce zero based budgeting in place of the more traditional incremental budgeting. The manager of the research and development department has never heard of zero based budgeting.
Write a report to the manager of the research and development department which explains the following