Question based on budgeting for financial planning

Reference no: EM1316380

Theory question based on budgeting for financial planning.

If budget performance is overemphasized, myopic behavior can occur where a manager takes actions that improve budgetary performance in the short run but cause long-run harm to the firm.

Required:

a. Give two examples of myopic behavior that might be encouraged if there is an overemphasis on budgets as a performance measure.

b. Identify and discuss the key features that a budgetary system should have to encourage managerial, goal-congruent behavior .

Reference no: EM1316380

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