Question

Which of the following is least likely to be a reason for adopting a participatory approach to budgeting?

-To blend the overview of top managers with operating details -

To generate better morale and higher motivation

-To reduce the chances of input from inexperienced managers

-To develop fiscal responsibility and budgetary skills of employees

Answer 1

Answer is to reduce chances of input from inexperienced managers

In participatory approach to budgeting all functional employees are included in budgeting exercise. The managers of respective departments take inputs form their subordinates and frames inputs for budgeting. A participatory budget is more meaningful compared to top down approach which is implemented by top management. Having participatory budget motivates employees and increases their morale. It gives a sense of responsibility and improves budgetary skills of employees.