Disadvantages of participatory budgets , Managerial Accounting

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Disadvantages of participatory budgets

 

  1. They consume more time and therefore are more expensive
  2. The advantage of management participation may be negated by failure to implement the budget by senior management leading to dissatisfaction similar to that experienced with imposed budgets.
  3. Such budgets may cause managers to introduce budgetary slacks ( A budgetary slack is a margin set between what can be achieved and what managers state will be achieved)
  4. Managers may be unqualified to participate and therefore the budgets may be unachievable
  5. Participatory budgets may support empire building by sub-ordinates.
  6. An earlier start to the budgeting process maybe required when there is uncertainty about the future.

 


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