Bottom Up Budgeting Case Study
QUESTION 1
In developing an annual budget accompanies may choose to adopt either top down budgeting approach or bottom up budgeting approach. In the finance ministry bottom down budgeting was a traditional way used in budget formulation. Top down budgeting came in the 1990s as a motivation to curb the fiscal deficits in which it lead to fiscal crisis in other countries. Top down budgeting was found that it helps and manages well the fiscal deficit efficiently unlike bottom up budgeting approach. Countries like Denmark, Korea Sweden, Australia, Netherlands, and Chile etc actively use top down budgeting because it helps in getting information for the evaluation of new initiatives and also in reviewing of programs for monitoring purposes. Sweden adopted top down budgeting approach because of the series of huge fiscal deficits it used to incur and it came to be that top down budgeting saved them. Top down budgeting is advantageous since it is done multiyear unlike bottom down budgeting which is annually. Top down Budgeting saves on time since it has delegated authority to take care of the budgeting process unlike Bottom down approach which is time consuming. Bottom up approach ignores economic forecast since it involves ministry by ministry analysis unlike top down approach which focuses on economic forecast as it is bases more in fiscal analysis. In top down budgeting there is ownership of proposal whereby the ownership is joint unlike bottom up approach where the ownership proposal is specific. We are able to see that top down budgeting is more advantageous to use in budgeting approach. Countries like Netherlands, Chile and Canada have independent bodies for economic forecast. Since Top down budgeting successes is seen in the office …show more content…
TOP-DOWN BUDGETING AS A TOOL FOR CENTRAL RESOURCE MANAGEMENT BY JOHN M. KIM AND CHUNG-KEUN PARK
2. TOP-DOWN BUDGETING A TOOL FOR CENTRAL RESOURCE MANAGEMENT BY JOHN M. KIM KOREA INST. OF PUBLIC
In developing an annual budget accompanies may choose to adopt either top down budgeting approach or bottom up budgeting approach. In the finance ministry bottom down budgeting was a traditional way used in budget formulation. Top down budgeting came in the 1990s as a motivation to curb the fiscal deficits in which it lead to fiscal crisis in other countries. Top down budgeting was found that it helps and manages well the fiscal deficit efficiently unlike bottom up budgeting approach. Countries like Denmark, Korea Sweden, Australia, Netherlands, and Chile etc actively use top down budgeting because it helps in getting information for the evaluation of new initiatives and also in reviewing of programs for monitoring purposes. Sweden adopted top down budgeting approach because of the series of huge fiscal deficits it used to incur and it came to be that top down budgeting saved them. Top down budgeting is advantageous since it is done multiyear unlike bottom down budgeting which is annually. Top down Budgeting saves on time since it has delegated authority to take care of the budgeting process unlike Bottom down approach which is time consuming. Bottom up approach ignores economic forecast since it involves ministry by ministry analysis unlike top down approach which focuses on economic forecast as it is bases more in fiscal analysis. In top down budgeting there is ownership of proposal whereby the ownership is joint unlike bottom up approach where the ownership proposal is specific. We are able to see that top down budgeting is more advantageous to use in budgeting approach. Countries like Netherlands, Chile and Canada have independent bodies for economic forecast. Since Top down budgeting successes is seen in the office …show more content…
TOP-DOWN BUDGETING AS A TOOL FOR CENTRAL RESOURCE MANAGEMENT BY JOHN M. KIM AND CHUNG-KEUN PARK
2. TOP-DOWN BUDGETING A TOOL FOR CENTRAL RESOURCE MANAGEMENT BY JOHN M. KIM KOREA INST. OF PUBLIC