Management Accounting Essay Example | Topics and Well Written Essays - 1250 words - 4

Management Accounting - Essay Example When budgets are imposed, department managers feel they do not have full control in their departments, which results in low morale and job dissatisfaction. This is the cause of the high turnover among his employees. Participative budgeting encourage a bottom-down approach to budgeting, involving the lower-level managers in the process of planning. This bottom-down approach requires each department manager to submit their proposed budgets for their departments; and with the assessment of the top-level managers will be subject to either approval or revisions. This gives the department managers authority over their finances, without the feeling of being imposed by the top-level management, thus motivating the manager to stay within budgets’ and at the same time top-level management does not give up control over these departments so as not to let the costs balloon. I would recommend participative budgeting for Mr. Sparkes to encourage support from department managers. As previously noted, participative budgeting encourage a bottom-down approach to budgeting, involving the lower-level managers in the process of planning. This bottom-down approach requires each department manager to submit their proposed budgets for their departments; and with the assessment of the top-level managers will be subject to either approval or revisions. This gives the department managers authority over their finances, without the feeling of being imposed by the top-level management, thus motivating the manager to stay within budgets’ and at the same time top-level management does not give up control over these departments so as not to let the costs balloon. Participative budgeting gives department managers the authority they need to feel motivated in doing their jobs, without the top-level management giving up control. By involving the department managers, they will be more motivated to stay within their budgets, thus keeping their morale up and lowering the employee turnover