The Role of Managers in the Budgeting Process
Although managers may not be directly responsible for creating the different parts of a budget, they frequently contribute to its development and implementation. Managers are often called upon to
provide input and useful information as a budget is developed, and they are almost always responsible for understanding what the budget entails. In order to adhere to a budget, managers must set
goals and make decisions in accordance with budgetary constraints.
Consider why managers must have an intimate understanding of their departmental budgets to make appropriate decisions and allocate resources efficiently. Also contemplate the importance of
establishing attainable goals and the many factors a manager must consider in setting goals.
Answer questions below:
• When setting profit goals, what are at least five items that should be considered in determining achievable goals? Why are these five important? Give an example of each.
• Consider your own organization or one with which you are familiar. For which aspects of the budget is a department-level manager typically responsible within the individual departments?
Which aspects of the budget are generally within the department manager’s control and which are beyond control?
• What steps should a manager take to ensure that he or she is best able to make decisions based on limited resources and budget constraints? How can a manager plan for and manage potential
changes that inevitably occur during a budget cycle?