Final answer:
The type of budget that keeps managers focused one year ahead, in order to prevent them from becoming too narrowly focused on short-term results, is called a rolling budget.
Step-by-step explanation:
The type of budget that keeps managers focused one year ahead, in order to prevent them from becoming too narrowly focused on short-term results, is called a rolling budget.
A rolling budget is a type of budget that is continuously updated by adding one additional month or quarter as the current month or quarter expires. This ensures that the budget always covers a fixed time period in the future, typically one year. By doing so, managers are able to plan and make decisions with a longer-term perspective, rather than being excessively fixated on short-term results.
For example, if a company is currently in January and using a rolling budget, the budget will cover February to January of the following year. As each month passes, the budget will be extended by one additional month, allowing managers to maintain a forward-looking perspective.