Top-Down Budgeting Methodology

Top-Down Budgeting Methodology
Top-down budgeting is described as “dominated by top members of the executive branch and the legislative branch. Decisions made by these top ranked actors include such matters as targets for programs or departments. Lower ranked decisions are sharply constrained by these top down decisions. Top-down budgeting may seek to prevent unwanted proposals” (Williams & Calabrese, 2011). Top-down budgeting is widely-used in the government, but also in many organizations (Ljungham). Organizationally, top-down budgeting decision makers are top level executives or senior leaders which determine the budget for lower levels of the organization. As stated, the method commonly goes beyond budgeting to include setting of program and department goals and targets. In a government and an organization there is little, if any; input solicited or considered when budgeting decisions are made. This may result in operational and logistical constraints in the lower levels of government or organization when plans are implemented.
Top-Down Benefits
Top-down budgeting has benefits such as time efficiency, low utilization of staff and resources, considerations of political environments, and holistic organizational needs. Time efficiency is one of the benefits to top-down budgeting because executive or legislative branches, or upper levels of management, make all the decisions. This enables middle and lower levels of management and staff to focus on their primary duties within an organization. This results in lower cost and resource intensity because involving staff in the budgeting process may require staff to complete extensive investigation and analysis. As top-down budgets are created by the top decision makers, budgets may be ...

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...om http://blogs.hbr.org/2012/02/a-new-era-for-global-leadershi/
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