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.