For example, a top-down budget is effectively imposed on junior managers and employees who may disagree with the way this budget allocates resources. Therefore, there may be pushback from the employees that must implement and follow the top-down budget. The bottom-up budget has similar issues....
While there are plenty of ways to go about yourcorporate budget, and there's many different types ofbudgeting & forecasting, but most fall under two categories: Taking either a top-down or a bottom-up approach. The process you choose can affect your business in different ways--and each com...
Individuals, small companies and corporations mainly use one of two budgeting techniques – bottom-up or top-down budgeting. Bottom-up budgeting starts from the lowest level in an organization and works its way up to formulate a budget. The top-down budgeting process starts from management and w...
After the budget is approved, it will be submitted to the financial department to put into play. Bottom-up budgeting may have higher accuracy than top-down budgeting when it comes to making sure the departments get the support and resources they will need to meet the goals....
Bottom-Up Budgeting Unlike top-down budgeting, bottom-up budgeting starts at the department level and moves up to the top management. The departmental heads/managers prepare their budget based on present information and past experiences and present it to senior management for approval. They take int...
Here’s the argument: Many people believe that bottom-up budgeting leads to waste and misdirection. The advocates of top-down budgeting are strong in their belief that if you give each person or department no guidance, they will budget to their wants or
Lower-level managers and employees determine what they believe the expenses of the department will be based on upcoming projects or goals that need to be met and then send the budget to top management for approval. Read Budget Controls: Top-Down, Bottom-Up, Zero-Based & Flexible Budgeting...
How top-down and bottom-up budgeting affect budget slack and performance through social and economic exchange. Abacus 50(3): 314-340.Kramer, S. & Frank, H., 2014. How Top-down and Bottom-up budgeting affect budget slack and performance through social and economic exchange. A journal of ...
STEPHANKRAMERANDFRANKHARTMANN HowTop-downandBottom-upBudgeting AffectBudgetSlackandPerformance throughSocialandEconomicExchange Thispaperinvestigatestheeffectsofatop-down(TD)versusbottom-up (BU)orientationindifferentstagesofthebudgetarytarget-setting processonslackandmanagerialperformance.Weusesocialexchange theorytoexpla...
This paper investigates the effects of a top-down (TD) versus bottom-up (BU) orientation in different stages of the budgetary target-setting process on slack and managerial performance. We use social exchange theory to explain the outcomes of these alternative budgetary arrangements, and complement...