Question

Discuss the advantages and disadvantages of participatory budgeting

Answer 1

advantages:

• Helps establish a good communication between superiors and subordinates
• Helps maintaining a useful exchange of information
• Sustains an efficient resources allocation
• Helps obtaining budgets that are more reliable, accurate and realistic
• Determining subordinates to develop a positive attitude towards budgets, management and entity
• Motivates subordinates
• Increases the satisfaction felt by employees at work  
• Clarifies work tasks

disadvantages

• Bidirectional communication between superiors and subordinates is difficult to accomplish
• It is difficult to determine subordinates to participate, communicate and disclose information
• Both superiors and subordinates have to have an open attitude
• Participation must occur at higher levels, which is difficult to achieve  
• Subordinates may try to manipulate budgets and resources allocation in their benefit
• To avoid subordinates demotivation, superiors should provide explanations for their lack of influence on the final budget
• In some cases subordinates may not have relevant information or necessary knowledge that can justify their participation  
• Participation can be seen by subordinates as a chore