The managing director of the organisation has realised that as the business is continually expanding, that the senior executive team have less specific knowledge of some of the operational departments of the firm. As the Management Accountant, you recognise that a more participatory approach to budgeting may assist the organisation to create more accurate budgets. 

When you suggest this to the Senior Executive Team, they are somewhat cautious and are concerned that if they allow managers to have more input into their budget targets, they may 'pad the budget' and introduce 'budgetary slack'. You are to write a report  to the Board and Senior Executive Management Team addressing the following:

1.Present a critical review of introducing a more participatory approach to budgeting; and k) Present a review of the likelihood of managers creating budgetary slack into the budget including the multiple reasons why managers may behave in this way and why this may not be done just for the personal benefit of the managers. 

Note: You review of participatory budgeting and reasons for budgetary slack occurring must be supported by a minimum of TEN peer-reviewed academic journal articles.

Answer rating: 100% (QA)

Introduction Budgeting is an essential part of financial planning for any organization It provides a roadmap for the allocation of resources and enables the management to achieve organizational goals ... View the full answer