The following table has several combinations of organizational structure and bud
ID: 368444 • Letter: T
Question
The following table has several combinations of organizational structure and budgeting preparation style:
Organizational Structure
Budget Creation Process
Environment A
Centralized
Top Down
Environment B
Centralized
Participative
Environment C
Decentralized
Top Down
Environment D
Decentralized
Participative
Required:
First, pick two of the combinations above and write a brief paragraph for each summarizing both the potential advantages and disadvantages for a company that makes your product(Bacon- https://www.youtube.com/watch?v=_tvx_CKB7uI&t=1s). Consider the impact on managers and other employees as well as the potential impact on outside parties such as customers or other organizational stakeholders.
Then indicate which of the two corporate environments you would prefer to work within, and briefly explain why you would pick one over the other.
Organizational Structure
Budget Creation Process
Environment A
Centralized
Top Down
Environment B
Centralized
Participative
Environment C
Decentralized
Top Down
Environment D
Decentralized
Participative
Explanation / Answer
1)Environment c-
ORGANISATIONAL STRUCTURE -DECENTRALISED
In decentralised structure upper mangement does not plays a major role all decisions are taken by lower level management and staff.
It gives staff feeling of involvement as decsion making is done by them they feel more involved And get motivated.
lower management and staff is in direct touch of customers and collegues so they can take better decison than upper management.
BUDGEMENT MAKING DECISION -TOP DOWN
In top down budget decision onky upper management take financail decsion .they are more involve in taking decsion regarding budget .it gives them knowledge of what is their budget how to allocated it different department.
If budget making is done by senior department and budhet is allocated to staff than staff know for what os thier budget and they have to accomplish their work in certain budget.
It is much faster procees because no involvement of any other department only upper department has to take decisions.
2)Environment-D
ORGANISATIONAL STRUCTURE -DECENTRALISED advantages are same as above .
BUDGET MAKING PROCESS -PARTICIPATIVE
IN participative budget making process all department clear out their budget to upper management after that upper management after discussing and forecasting with all departments allocate budget to different departments.
Participative gives all members feeling of belongingness that organisation value thier decsion.
Forecasting of budget by different department will be more accurate because they are one who know how much they have have to spent in which activity.
They are more involved in daily business. Transactions so they can take more accurate decisions.
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I would like to work in decentralized organization structure with participtaive budget .making process so i can get feelin of involved to organisation activity inspite of simply following instruction and directions .I would like if organjsation would listen my views ,my decisions i will get chance to show how i am thinking.
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