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The above Statement is TRUE.
A self-imposed budget or participative budget is a budget that Many managers believe that being empowered to create their own self-imposed budgets is the most effective method of budget preparation.
What is Self-imposed budgets?
Self-imposed budgets can also be called participatory budgets. These types of budgets assume that there was cooperation and participation from managers at all levels of the organization.
Self-imposed budgets give managers at all levels of an organization an opportunity to provide input into the budgeting process. Self-imposed budgets are prepared without consulting lower-level managers.
The advantages of a self-imposed or participatory budget can include:
- The creation of a team environment where everyone knows their views and judgements are valued by company management.
- When a front-line manager assists in the preparation of their own budget, they have working knowledge and are able to more accurately estimate expenses for their area.
- When you, as a manager, get to prepare your own budget, you are more motivated to set goals that are attainable, yet challenging. There is a higher level of commitment when participation is involved.
- If you as a manager try to attain a goal set by someone else, especially if that someone does not know the intricate workings of your department, it can be easy to just say that the goals were unattainable.
Learn more about Self-imposed budgets on:
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