Question

In at least 225 words answer the following: (Please cite any references used) What is the difference between top-down and participative budgeting? Which method do you think is the most effective, and why?

Answer 1

The difference between top-down and participative approaches are as follows
The difference between Top-down and participative approach are as follows. Top-down approalgh Participative approach generally refers * Top-down analysis participative approach is focus to usir ng comprehensive factors - on specific characteristics and micro attributes of an as a basis for decision making. individual stock » Top.dovoo Peoach ні еск in this concentration and is on to identify big picture business toy business or all of its components. Sector by sector fundamentas > Top-down investing strategies =) participative approach is typically focus on profiting. n more fundamental in nature. opportunities that follow market cycle. => It's desearch begins at The > It is want to look at how Company Lovel but does not systematic factors are affecting stop there. This is weigh company an out come. fundamentals readily but also look at the factor. > Eg: top-down investment fund =xgo participative might primarily focus on investing focus on lunda according to macro tronas, at will still look out the funda- effects on individual holaines -mentals of its investments before making decision. be fore making an decision. Scanned with CamScanner -mentals of investments investor still want to consider systematic

Participative approach. Top-doonaPe1oach - It goes from the general it is specific and moves - to specific. . I to the general- - It is focus on a vast 1 =) It is most narrowly variance of macro variances focused. .: These are the some of the differences between Top-down approach and participative approach. In these approach is two methods, I think participative best because. In participative approach the process Starts in the individual departments, where managers create a budget and then send it to upwards for approval. That budget either approved or sent back for modifications => but in Top-down approach only enecutive Team is involved and thus lower management does not have to take time to prepare the budget. It may not involve day to day activites. aue to this some specific expenses are required. only participative appocach will sive proper information because of involvement of all level people & of the firm Scanned with CamScanner