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An effective budget converts the goals and objectives of an organization into data. The budget serves as a blueprint for management's plans. The budget is also the basis for control. Management performance can be evaluated by comparing actual results with the budget.
Thus, creating the budget is essential for the successful operation of an organization.
Finding the resources to implement the budget - that is, moving from a starting point to the ultimate goal - requires the extensive use of human resources. How managers perceive their roles in the process of budgeting is important to the successful use of the budget as an effective tool for planning, communicating, and controlling.
Required:
Discuss the behavioural implications of planning and control when a company's management employs:
i. An imposed budgetary approach
ii. A participative budgetary approach
(at least 300 words)
Discusses four types of perceptual distortions: stereotyping, halo effects, selective perception, and projection.
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