It is a common experience that a lack of involvement in formulation of objectives/ targets always leads to restricted output and
effort. Participative budgeting is an effective tool of practice of allowing managers who will be responsible for performance under a suitable budget to participate for business budgeting decisions. It ensures all concerned
managerial staff are engaged in the budgeting process so that budgets are the results of team work and maximum co-ordination. The participative budget is a very important tool to overcome the human problems associated with the
formulation and implementation of the budget. It leads to improve performance by promoting among operating managers staff a feeling of belongingness to the organization. Senior managers from all leading major activities should play
a leading role in developing an effective budget for the organizational needs, Since this can produce more realistic targets lead to better understanding of corporate objectives and the constraints within which all organization
work. As a consequence, it is hoped that personnel will be better motivated to achieve budget levels of efficiency and activity. Certainly all personnel can gain from clear targets and organizations can provide incentive payments
based on the budget achievement.
From the above discussion hereunder are mentioned few merits:
* It promotes practically acceptance of budget targets.
* It provides involvement in budgeting hence provides to all job satisfaction/enrichment.
* It provides more positive attitude and belongingness towards organization.
* It provides practically implementation of the budget for its targets.
* Under the present corporate scenario focus should be to develop the participative budget as it will provide a teamwork and dedication of setting and
achieving for the organizational success.
In the end every corporate entity to set scientifically to fight with the revenue target, cost evaluation and control target, investment target, production target, profit target.
Present global liquidity and GDP fall will recover only with the team work, dedication, professional approach, belongingness and strong participation from all the levels of Corporate Entity.
Now we can say a participative
budgeting has been ploughed in as a new approach is to be applied to enrich the global market. Accept as maximum as possible to reach as per the desired level.