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Top down Budgeting
In this method, senior level management produces a top class budget where they set their performance target as per the report produced by managers thereby considering all the related and unrelated risks that may affect the set target. However, before setting up of standard they should have close connection with their subordinates so that they would able to know the current position of the company, how it works, is there any space for improvements, how much will be the total cost for the improvements, what benefits will the company get from such procedure, what are the concerned issues, will subordinates would able to meet the stated budget. This process requires high proficient managers who can deliver all necessary related information to the superiors with respect to their business and their risks. Further, top down budgeting is only preferred when lower level managers are not efficient enough to prepare and deliver such report. So this process is only effective in...