Final answer:
TRUE, Kaizen budgeting is a method that encourages ongoing and significant improvements with an emphasis on cost reduction, aiming for impactful changes rather than incremental adjustments typical in traditional budgeting.
Step-by-step explanation:
TRUE: Kaizen budgeting indeed encourages dramatic improvements and substantial reduction in costs. Kaizen is a Japanese philosophy that focuses on continuous improvement throughout all aspects of life, including business practices. When applied to budgeting, the Kaizen method advocates for gradual and ongoing improvements rather than static or incremental changes. This is because Kaizen assumes that there are always opportunities for improvements and cost efficiencies, even in processes that are already functional. Thus, it differs from traditional budgeting, which typically only adjusts the previous period's budget for inflation or business growth without necessarily targeting efficiency or dramatic improvements. Kaizen budgeting, therefore, pushes for annual improvements in cost reduction, aiming for more significant, sustained changes over time, rather than one-time cost cuts.