Budgets are considered important tool for planning and control, means to evaluation of

performance, and

motivating employees to achieve the organi

s

ational goals.

If budgeting systems

are not implemented appropriately, it may create dysfunctional behaviour among operational

managers or employees creating an adverse impact on the goal of the organisation.

Part

icipative

budgets are used simultaneously as a coordination and motivational device (Chandra, 1993).

Participative budgeting is considered a common remedy for negative consequences of budgets.

REQUIRED

(i)

Discuss whether budget is a waste of time and adds

no value to organisations?

Does

budgeting

add value for organizations? If so, how?

(ii)

Discuss in detail, the negative behavioural consequences of budgeting. Use examples to

explain.

(iii)

Discuss how participative budgets are used as a remedy for

negative consequences of budgets.

(iv)

Discuss how non

-

profit organisations use budgeting for planning and control. Use a local

example to illustrate your answer.

(v)

In the recent years, some firms have introduced more frequent and much streamlined planning

and budgeting process (Player, 2003).

One common approach is beyond budgeting. Discuss

why organisations are going 'beyond budgeting' and how this principle may encourage

goal

congruence.