Advantages of Imposed budgets

Advantages:

They increase the probability that the organization strategic plans are incorporated into the planned activities.

• They enhance the co-ordination between the plans and objectives of divisions.
• They use senior management consciousness of net resource availability.
• They decrease the possibility of inputs from inexperience or uniformed lower level employees.
• They reduce the period of time taken to draw up the budget.

Disadvantages of Imposed budgets:

• It may result in dissatisfaction, defensiveness and low morale among employees, who must implement the budget.
• The feeling of team spirit might vanish.
• The acceptance of organizations goals and objectives could be limited.
• The sense of the budget as a punitive tool could arise.
• Unachievable budget for overseas divisions may be imposed on local divisions if consideration is not given to the local operating and political environment.