Imposed Budgets
In this approach to budgeting, top management prepares a budget with little or no help from operating personnel, which is then obligatory upon the employees who have to work to the budgeted figures.
Imposed budgets are effective in the following conditions:
- In a newly formed organization
- In a very small business
- During periods of economic hardship
- Whenever operational managers lack budgeting proficiencies
- When the organization’s different units require precise co-ordination