Vertical information sharing:
According to Hopwood, (1976, as cited in Parker and Kyj, 2006) sharing of information between superiors and subordinates are one of the main benefits of the budgeting process. Shields and Shields (1998, as cited in Parker and Kyj, 2006) argue that information sharing during the budgeting process between the superior and subordinate is of high importance because both the individual and the organization can potentially benefit from it. Survey results show (Parker and Kyj, 2006) that vertical information sharing plays a huge role in understanding the performance effects of organizational commitment and budget participation. Role ambiguity is the intervening variable between the relation organizational commitment and budget participation (Parker and Kyj, 2006). Vertical information sharing consists of upward information sharing and downward information sharing.
Upward information sharing
The information flow from the subordinate to the superior is called upward information sharing, the subordinate reveals information that is not known for the superior.
The subordinates often know more about their daily operations than their superiors.
Baiman (1990, as cited in Parker and Kyj, 2006) mentions that the agent contains private information about the about the area the agent is responsible for. Chow et al. (1988 as cited in Parker and Kyj, 2006) state that upward information sharing can be valuable because it is difficult or impossible for the superiors to acquire this information without any help of the subordinates. This information is called private information and contains strategic uncertainties that challenge the organization (Simons, 1995, as cited in Parker and Kyj, 2006). Shields and Young (1993, as ...
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...as cited in Fisher et al., 2002) explain that the competition between subordinates can be increased when subordinates feel desire to outperform their co-workers in budget proposals and their actual performance. Subordinates can also decide not to hand in a budget proposal when they feel social pressure because subordinates have less motivation or ability than their co-workers (Young, 1985, as cited in Fisher et al., 2002) The social competition that arises between the subordinates will lead to optimization of the budget.
A possible problem can arise if the superior uses higher budget proposals for subordinates as a standard, the benefits can then be very low when the subordinates submits lower budgets (Fisher et al., 2002). When subordinates submit significant lower budgets than their co-workers, they may even be sanctioned by their superior (Fisher et al., 2002).
I attended the Saturday Lab 1 session discussing the Denison Specialty Hospital case study. In our session, we had a through discussion into the different budget terminology. I learned about the difference between accrual and cash accounting methods, which is based on the timing of when the revenue and expenses are recognized. I also learned about responsibility centers as an organizational unit under the supervision of a manager, who is responsible for its activities and results. In addition, the manager is accountable for the budget of the department that they head. Therefore, a centralized form of management in developing the budget because it makes easier to because the information for the department budget is located
Chain of Command – This establishes the level of authority from the bottom to the top within the organization and the level of authority each managerial position will hold. Additionally, the chain of command will outline the reporting process.
Corning is a decentralized company currently being plagued by both external and internal threats, such as market uncertainty and poor communication and planning systems. The company has just recently started to recover from a large layoff in 1975, which reduced worker job confidence. The Houghton family has a preference for an informal workplace with an ambiguous leadership style that contradicts the formal and strict resource allocation system designed for their international strategy. The current strategy being employed differs with the owner’s philosophy, which is important, since the President must buy into the plan to understand and communicate it effectively. This miscommunication creates goal incongruence, which is exemplified by the confusion of corporate divisions about whether they should be focusing on reducing cost or being an innovator. Also, each officer has been described as having work that overlaps, showing no focus and a lack of efficiency. The fact that each of the over 150 businesses groups have to write up a resource allocation request and business strategy creates the issue of finding time to read each report.
we give out private information and the possible problems of doing so, the possible problem he
Kroger’s formal communication structure or flow utilized within the chain of command defined by the organizations CEO uses the three formal channels and types of information that is conveyed in a downward, upward, and horizontal communication style. This is used by the top CEO, Rodney McMullen, in a downward style through the numerous chains of command, finally reaching all the way to the various store brands and store level management. Downward communication, comes from the top CEO level and is communicated down through the chains of command. An example of how culture has influenced Kroger’s downward communication can be seen in the use of videos posted by Kroger’s CEO. Upward communication is when messages come from the subordinate levels to higher in the organization’s management pyramid (Daft, 2012, p.579-580). An example of an upward and downward communication tool can also be seen on Kroger’s intranet in the form of a company blog.
Mares, J., (2013, May 1). 25 differences between private sector and government managers. The Powermag. Retrieved from
A major issue is how the budget process impacts the well-publicized innovation at Johnson & Johnson (in this case at Cordis). Is innovation suppressed or enhanced? Is there organizational learning going on and how and where does it occur? How does this relate to innovation? Do you see any evidence that innovation is encouraged or suppressed?
To maintain information security, do not discuss acquisition or sensitive information in areas that are not secure; such as hallways, bathrooms, dining facilities, or at a meeting, until you know who is nearby and can overhear. According to 18 United States Code (USC) 1905, government employees may not divulge information received in the course of their employment or official duties. If they do, the punishment is a fine and/ or one year in prison. (Source DAU COR Slides)
In the end I believe that it is in our human nature to share not only our own stories but those of others around us. We must understand that possessing this information comes with responsibility and that there could be negative consequences with the disclosure of the same. Theories like Communication Privacy Management lead way to research in many concepts like gossip in the workplace or even expanding on its ‘”possession” concept within others. How ethical is it for one to own information that is not about oneself? Can it be used as leverage for advancement? How much does gossip in the workplace distracts from productivity? Is the boundary permeability affected only by context or are there any other factors that would directly influence
In this case, the downward communication is a communication that flows from one of level a group or organization to a lower level is downward communication. When we think of managers communicating with employees, the downward pattern is the one we are usually thinking of. The most common forms of downward communication are job description, memos and e-mails from the CEO, policy statements, hiring and operating procedures, manuals and company publication. It is used by group leaders and managers to assign goals, provide job instructions, inform employees of policies and procedures, point out problem that need attention and offer feedback about performance. In many organizations, downward communication is often incomplete, inadequate, and inaccurate, as evidenced in the often-heard statement among organization members that “we ...
Once the first two requirements have been satisfied and the right to know and need to know has been established, it is now necessary to determine whether the right to release information to the agency is possible. Many times the information or intelligence may not be possible to release, due to the originating agencies need to have the information keep a secret from the everyone, for example, an undercover agents identity was disclosed. Historically, information is classified at a higher level than necessary, so personnel in this type of circumstance are not compromised. If this is the case, than a date should be disclosed as to when this information may be declassified or downgraded to the consumers level.
The power of information can also be divided into 3 categories. Firstly there’s information agent, which is to centralize yourself in a way where you are able to receive the latest information. Once you have the latest information on whatever that is going on in the company, you immediately have some form of leverage over your colleagues (Feldman & March, 1981). Another aspect would be to inform others. This can be seen when employees share information with their clients in order to build trust and a good relationship. It is a form of having an upper hand and getting some form of power through communication rather than control.
“Suppose a manager called A, request two subordinates called C and D. When C complains in turn of being overworked (as he certainly will) A will, with the concurrence of C, advise the appointment of two assistants to help C. But he can then avert internal friction only by advising the appointment of two more assistants to help D, whose position is much the same. With this recruitment of E, F, G and H the promotion of A is now practically certain (Parkinson 14).”
It requires an adequate and sound organizational structure, that is, there must be a definite assignment of responsibility for each function of the enterprise. Budgeting compels all the members of management, from the top to bottom to participate in the establishment of goals and plans. Budgeting compels departmental managers to make plans in harmony with the other departments and of the entire enterprise. Budgeting helps the management to put down in figures what is necessary for a satisfactory performance. Budgeting helps the management to plan for the most economical use of labor, material and capital. Budgeting tends to remove the cloud of uncertainty that exists in many organizations, especially among lower levels of management, relative to basic policies and objectives. Budgeting promotes an understanding among members of management of their co-workers' problems. Budgeting force management to give adequate attention to the effects of general business conditions. Budgeting aids in obtaining bank credit as banks commonly require a projection of future operations and cash flows to support