Question

Why should the production requirements set forth in the production budget be carefully coordinated with the sales budget? What is participative budgeting? Discuss some of its advantages. Why is it important for a manager to receive frequent feedback on his or her performance?

Answer 1

Answer)

Production budget must be carefully coordinated with sales budget because If it is not coordinated than it may lead to excess or under production. Where excess production may lead to increase of storage costs or export of products and under production may lead to loss in consumer due to inability to cope up with demand.

Participating budget as the name implies involved employees who are related to such budget like production supervisor or manager while designing budget apart from top management.

Advantages of participating budget:

1) The targets will be more achievable and practical.

2)Flow of information from bottom level will give management an idea for problems at lower level.

3) Active participating increases job satisfaction of the sub bottom level employees.

It is very important for the manager to get feedback as his performance is depended on his team and hence such feedback helps his to find where they are lagging behind and improve that area.