Essay On Participatory Budgetary Approach

An imposed budget forecast approach does not allow input from those who are directly affected by the process. This can tend to make the employees feel that they are unimportant and that management is concerned only with meeting budgetary goals and not necessarily with the well-being of employees. The employees will probably feel less of a bond with the organization and will feel that they are meeting standards set by others.
Discuss additional behavioral implications of planning and control when a company’s management employs an imposed budgetary approach and a participative budgetary approach.

Imposed Budgetary Approach

An imposed approach is impersonal and creates the impression that some of the employees benefit at the expense of their colleagues who work on the budgetary process (Hansen & Mowen, 2014). Consequently, there is a high chance that the organization will experience dysfunctional behavior because subordinate employees perceive that the goals of the budgetary process belong to their superiors. Thus, subordinate employees are less likely to internalize the objectives of the budgeting process.

The participatory approach allows every member of the organization to contribute to the budgeting process (Hansen & Mowen, 2014). Such participation empowers employees to feel some sense of responsibility and develop creative approaches to structuring the budget. Consequently, the goals of the budgeting process become the personal goals of every employee thus, it encourages cooperation among employees. The consequence of employees cooperating is that the organization will achieve a high level of goal congruence.

Communications plays an important role in the budgetary process whether a participative or an imposed budgetary approach is used.

Discuss the differences between communication flows in these 2 budgetary approaches.
The imposed approach uses the top-bottom communication approach and communication is one way (Hansen & Mowen, 2014). Managers communicate the goals of the budgeting process to the employees and employees are supposed to work on the goals without making any tangible contributions. On the other hand, the participative approach fosters top-down and upward flow of information because managers engage subordinate staff members in the budgeting process (Hansen & Mowen, 2014). In fact, subordinate members of staff initiate most of the communication under the participative budgetary approach.

Discuss the behavioral implications that are associated with the communication process for each of the budgetary approaches

The top-down communication process in the imposed budgetary approach creates the impression that the contribution of junior staff members is unimportant. It creates the feeling of isolation and neglect among junior members of staff because managers are sole decision makers during the budgeting process. However, the dual way communication approach creates the impression that junior members of staff are an invaluable asset to the organization because they can participate in making decisions. The participation of junior staff members in the budgeting process strengthens their commitment to achieving organizational goals because they feel valued by the organization (Hansen & Mowen, 2014).

Project Budget

In order to come up with the budget, I employed participatory budget approach where I engaged different stakeholders who will be affected by this project either directly or indirectly. I also sought information from different experts who assisted in estimating the values of each item in the budget. Those people who were key in making the budget include headmasters, teachers, laboratory technicians, construction managers, IT experts, educators, local administrators and a few students. They played a crucial role in the itemization process. After this exercise I came up with the following budget, which shows the cost of the entire project.

References

Hansen, D. & Mowen, M. (2014). Cornerstones of Cost Management. New York: Cengage Learning.