Budgeting Is Useless on Managers Essay

I dissent that budgeting is an unnecessary burden on numerous managers to a large extent. This isbecause budgeting permits an opportunity to reevaluate existing activities and evaluate new ones. Compel managers to think in front and estimates of unit and sales during operating period as well as selling expenses, so as to estimate the remuneration target. Once the budget is set, region, product groups and/or account types can break it down. Also, budgeting talks ab extinct the optimum profitability in a given period since firms typically look for profit maximization in the long term while it seeks sales maximization in the current period.By providing and opportunity to reevaluate existing activities and evaluate new ones, managers are able to get a promote understanding of the sales, production, distribution and finance on their current activities. Hence with the above that they have found out they are able to enhance and create new ones. In additional, budgeting compel manager s to think ahead as they have to consider factors when forecasting sales. This factors include aside patterns of sales, market research studies, advertising and sales promotion plans, competitors actions and general economics conditions.While considering these factors, managers will have to do a research studies on the past and present and make a comparison on these and estimate sales in the future. In edict for a company to have a good budgeting or performance, manager will need to look for what will happen in the future and engages its staffs on the budget processing, creating and environment where there is a true two-way flow of information. Example from the top down, the top management gives sales and profit targets to mixed organization units and unit heads make plans to accomplish the objectives.From the bottom up, Unit heads and their subordinates team up in the oscilloscope of the sales and profit objectives and also plan to meet them. As from the example above, top ma nagement is away from the realities in the field but at the same time, juniors whitethorn tend to understate what they can achieve in the period. However, budgeting takes up too much time of all managers. As they have to stay nidus on their current project and to make sure that is an active participation of all the employees.Reason why the failed to budget can be due to an error in the message conveyed by the budgeting system that mayhap misaligned with incentives provided by the compensation system as budgeting is a detailed and comprehensive analysis upon any miscommunications it may result in more time spend by the managers. In conclusion, I do disagree to a large extent that budgeting is an unnecessary burden on many managers as they can provide good analysis while ensuring of all participation of the management be it the employees all the managers despite the risk.