Question 1 Budgeting Fixed and flexible budgeting in an organization

Negative behavioral aspects
Achieving personal goals
Every financial control system must have mechanisms for rewarding personnel in order to be effective. If this condition is not satisfied, managers will approach their jobs with extreme prudence and conservatism.
Failure to align one's goals with one another
Budgetary control relies heavily on performance evaluations, according to research. The results are compared to the budget or benchmark to determine if a performance is excellent or bad. Not only is the company itself being evaluated, but also the people in charge of running it. In order to motivate managers to act in the company's best interest, keeping a careful check on the finances is a good idea.

Negotiation of the budget

When it comes to budgeting, it's usual practice to negotiate with the relevant management. Budgets can be started by departmental managers and developed with input from the budget officer.
Negotiating a realistic budget is important to management. "Padding" in the budget is the outcome of this technique, and it is known as "slack." Managers tend to exaggerate the costs of achieving goals.
Influence on accounting policies
Anyone who has worked as a management accountant and has prepared financial control reports has seen managers try to influence the accounting policies that are being utilized.
Budget constrained management styles
New business prospects may not be pursued if a manager's success is judged on his ability to satisfy the company's budget. This will have an immediate effect on capital and operational expenses, which will have an unfavorable effect on current period earnings. The long-term advantages of such undertakings may not be immediately apparent. The management may merely see that accepting it would result in cure performance that is below budget in the present period, and hence reject it on this basis alone when a new Hence opportunity arises. There are other considerations as well, such as the fact that budgetary control necessitates an office-based management style. Incorporating elements like executive dining rooms into a company's design might lead to a culture that emphasizes hierarchy and social stratification, neither of which are desirable. In large enterprises, budgetary management mechanisms can lead to a 'ossified' nature.

Part 2