Contrast the disadvantages of top-down budgeting and bottom-up budgeting. Please make response between 200-500 words.

Expert Solution

Disadvantages related to top-down budgeting is inclined at just focusing on the top level of management and it will be only concentrated in nature so there will not be a participation in the policy formulation of the company and there will be a concentration of the decision-making which can lead to serious problems.

disadvantages related to top-down budgeting is that top level management is not exposed to the day-to-day situations at the medium and the bottom level of management and they are often making the policy with the higher expectation and unachievable result so it will be leading to the motivation of the employees.

disadvantages related to bottom up Budgeting is that there is a lot of participation of the the managers in the decision making and proper responsibility cannot be fixed and there is often seen that results are not achieved because there is too much resistance from various departments and bottom up budgeting have problems in practical life.

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