Fundamentals of Management, 8th ed

•  Prepared by budget

 committee

•  Approved by budget

 committee, 

controller,

 and 

CEO

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F I G U R E 1 4 . 5

Developing Budgets in Organizations

Most organizations use the same basic process to develop budgets. Operating units

are requested to submit their budget requests to divisions. These divisions, in turn,

compile unit budgets and submit their own budgets to the organization. An

organizational budget is then compiled for approval by the budget committee,

controller, and CEO.

Chapter 14: Basic Elements of Control

4 3 9

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Indeed, for these very reasons, some organizations are working to scale back their bud-

geting systems. Although most organizations are likely to continue to use budgets, the

goal is to make them less confining and rigid.