Performance Analysis (3) Flashcards

1
Q

Top down budgeting is relevant for (organisaitons)

A

In newly formed organisations

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2
Q

Top down budgeting is relevant for (small)

A

In very small businesses

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3
Q

Top down budgeting is relevant for (hardship)

A

During periods of economic hardship

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4
Q

Top down budgeting is relevant for (budgeting skills)

A

When operational managers lack budgeting skills

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5
Q

Top down budgeting is relevant for (co-ordination)

A

When an organisation’s different units require precise co-ordination

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6
Q

Advantages of top-down budgeting (strategic)

A

Strategic plans are likely to be incorporated into planned activities

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7
Q

Advantages of top-down budgeting (co-ordination)

A

Enhance the co-ordination between plans and objectives of divisions

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8
Q

Advantages of top-down budgeting (awareness)

A

They use senior management’s awareness of total resource availability

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9
Q

Advantages of top-down budgeting (decrease the input)

A

They decrease the input from inexperienced or uninformed lower-level employees

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10
Q

Advantages of top-down budgeting (decrease period of time)

A

They decrease the period of time taken to draw up the budgets

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11
Q

Disadvantages of top-down budgeting (dissatisfaction)

A

May be dissatisfaction, defensiveness and low morale among employees

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12
Q

Disadvantages of top-down budgeting (team spirit)

A

The feeling of team spirit may disappear

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13
Q

Disadvantages of top-down budgeting (acceptance)

A

Acceptance of organisational goals and objectives could be limited

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14
Q

Disadvantages of top-down budgeting (punitive device)

A

The feeling of the budget as a punitive device could arise

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15
Q

Disadvantages of top-down budgeting (unachievable budgets)

A

Unachievable budgets for overseas divisions could result if consideration not given to local operating and political environments

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16
Q

Disadvantages of top-down budgeting (initiative)

A

Lower-level management initiative may be stifled