Question

Why should a company tie its budget to the overall goals of the company?

Entry field with correct answer
There will never be any cost overruns.
It will ensure that the company will always reach its profit targets.
People will always receive their expected bonuses.
By doing so, people have clear guidance of the priorities and focus on them exclusively, while spending less time arguing about the details or insignificant items.

Answer 1

By doing so, people have clear guidance of the priorities and focus on them exclusively, while spending less time arguing about the details or insignificant items.

Step-by-step explanation:

There is a chain of achieving ultimate goals, in which goals are set for long run, and further are divided in some short term goals.

The short term goals are aligned with budgets and in this circle or chain of connections the budgets are ultimately synchronized with the goals of the company.

These provide for targeting the goals, set objectives and policies which are followed, and avoiding any discrepancies, as that could occur while achieving the goals.