feedback post 17
1. Compare and contrast the advantages and disadvantages of top-down budgeting and bottom-up budgeting. What are some examples of when each would be used?
Only feedback 3-6 sentence
a. Compare and contrast the advantages and disadvantages of top-down budgeting and bottom-up budgeting.
Answer: The advantages of top-down budgeting are that only an executive squad is affiliated and therefore the lower management does not require to get the budget ready which can represent important time conserving for people that might be more affiliated in daily work unlike the complete plan for the system.
The disadvantages of top-down budgeting are that people making the budget might not be affiliated with the daily work and therefore might possibly not know more or less of particular spending that are needed which leads to dilemmas for departments searching for data that is simply not compatible from the varieties of multiple department productions.
The advantages of the bottom-up budgeting are that normally the aftermath of this tactic are ascended accountability of the budget, additional references when employees remember that all departments making a budget, and even more comprehension, conversing and dedication with more or less managers due to the fact that they are simply affiliated in the procedure.
The disadvantages of the bottom-up budgeting are that it will end with heavier expending aims unlike the top-down tactic and therefore a reunion will be necessary for the creation of system-wide budget that has every component calculated properly. In addition, more or less of the time the bottom-up budgeting approach can end with budgets that are not compatible with company missions should managers concentrate quite excessively enough on departments, instead of systematic business matters.
- What are some examples of when each would be used?
Answer: Examples of when the bottom up approach would be used are when maximum capabilities of workers are to be utilized, when we want workers to be more affiliated and when we want our systems of business employees to be intrigued in the future success of the company as well as even feeling more willing to create procedures.
Examples of when the top down approach would be used are for defining project objectives, last deliverables, and even breaking data down into tinier strategizing pieces called work packages which are advanced and modified into simpler explanations leading to work objects that are given to squad staff.
Provide examples and research from outside of the textbook to support your responses.
Research for Question 1: https://www.truesky.com/top-down-or-bottom-up-corporate-budgeting-which-one-is-best/ (Links to an external site.)
Research for question 2:
https://www.liquidplanner.com/blog/how-long-is-that-going-to-take-top-down-vs-bottom-up-strategies/
b. Top-Down Budgeting
Advantage: Provides better financial control. This allows the team to have an overall assessment made on the entire project and assign a budget and resources available to complete the project and stay within the budget.
Disadvantage: Poor employee morale. Unfortunately, when budgets dictate what and where the project is limited to. It seems that employees may resent that their inputs or ideas were not taken in consideration due to financial restrictions.
Bottom-Up Budgeting
Advantage: Improved employee morale. Allowing the SME’s to provide input to help direct the best overall outcome to the project and create their own budget line in the project.
Disadvantage: Over budgeting. Although, you want your SME’s to provide you with fine details and budgets at times this becomes a situation where they over budget and get stuck on the minute details of the overall project and causing the project to be delayed.
Examples: There is a place and time for both budgets. The company I am currently working for did a top-down budget for an overhaul of our EHR system. They set a budget based off the knowledge of going rates/fees for certain items in the area. They did research on all of our internal resources and how they operate and how they should look at the end of the project. We then set out for what services and platforms we would use to fit our budgets along with our needs. We have limited funds to spend for this project so we had to use this example to complete the tasks for us. We are currently in month 10 of this entire process and we are coming to a closure in may and it has become overwhelming due to all the fine details and deadlines along with staying on budget and now we are fighting the COVID-19 pandemic. (sorry to get side tracked)
When you could use the bottom-up budget would be when you had unlimited funds, and timelines to complete the project.
References:
https://bizfluent.com/info-8792659-advantages-bottomup-budgeting.html
