Question

Ahmed is the manager of the bindery department at a local company. Their direct supervisor just came to them to ask for their departmental budget to be reviewed. What type of budgeting process does Ahmed's company use?

Answer 1

Ahmed's company appears to use a participative budgeting process, where departmental managers are involved in creating and submitting their budgets for review. The management style of the manager can greatly influence the approach and accuracy of the budgeting process.

Step-by-step explanation:

The question suggests that Ahmed's company uses a type of budget review or budgeting process known as participative budgeting or bottom-up budgeting. This process typically involves managers at various levels within the organization, who are responsible for submitting their departmental budgets for review.

Ahmed, as the manager of the bindery department, would prepare and submit this budget to their direct supervisor. The benefits of such a system may include more accurate and realistic budget formations since managers like Ahmed are closely involved with the operations and can better forecast their department's needs.

A manager's approach to budgeting can reflect their management style, which could range from detail-oriented to creative, or from organized to consultative. Depending on how managers, like Ahmed, are described by their peers or subordinates, one might get a sense of their effectiveness in the budgeting process.

For instance, a detail-oriented manager might be more meticulous in forecasting and planning the budget, while a consultative manager might seek input from their team, resulting in a more collaborative budget proposal.