Key Developments in Budgeting Practice

1457 Words6 Pages
This question covers an outline of the key developments in budgeting practice, discussion and analysis of the reasons why budgeting has been subject to considerable criticism, and an explanation of the roles that budgeting and budgets might play in an organization.
An Outline of the Key Developments in Budgeting Practice
The major developments in budgeting practice involve:
1. Development in terms of behavioral aspects of budgeting; budgeting practice can affect behaviour in terms of perceptions, personal objectives participation, aspiration, targets, obsession, and excuses.
2. Development in terms of the use of budgets for performance evaluation; the budgeting process can help in top management and employee motivation if used appropriately, and may also lead to dysfunctional behaviors if used inappropriately; and budgets and the whole budgeting process can affect the behavior of managers and employees in terms of perceptions of individuals in an organization, can affect the personal objectives of employees in an organization.
Why Budgeting Has Been Subject to Considerable Criticism
Budgets are normally subject to considerable criticism because they are involved with games and conflict (Libby and Lindsay, 2010). The budgeting process is normally political since it involves attempts to resolve the different conflicting demands on the resources of an organization. The budget games that individuals play, and are subject to criticism include: leaving enough slack to increase
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