Participative Budget

Participative Budget

Budget
 Common management tool
 Ability to support economics entities
Participative Budget
 Process of decision made by 2/ 2 parties
 Will influence in the future
 Once subordinates participate, the “budget” will only created
Advantages
 Good communications
 important when transferal information
 especially high difficult task
 Maintain effective exchange of information
 discuss issues & solve the problems
 Great influence for job satisfaction
 when employees participating in doing the job, are recognized as members
 feel that they are important
 Obtain more realistic & accurate budgets
 Have their own opinions to create “double win”
 Help to clarify work tasks
 Reduce the situation of role ambiguity
Disadvantages
 Time Consuming
 Biggest drawback of participating in budget
 Delay & indecision
 A challenge if too many person participate
 will drag on the negotiation
 if doesn’t reach agreement, superior have authority to make final decision
 will lower down the confidence of subordinates
 The attitude of negotiators will affect the outcome
 once the decision made, the responsibility will , be more stressful
 The cost of implementation is high
 need a lot time/ money before decision made
 Subordinates manipulate their own benefits
 business are conducted according “bottom up- top down”