Strategic Management: Formulation and Implementation

Advantages And Disadvantages Of Budget Control

Like other control methods, budgets have the potential to help organizations and their members reach their goals. Budget control offers several advantages to managers. Some of these are:

However, budgets control can also create problems. The disadvantages of budgets are:

These dysfunctional aspects of budgets systems may interfere with the attainment of the organization's goals. One generally accepted guideline for effective budgeting is to establish goals that are difficult but attainable.

Therefore, skilled managers who understand budgets and how to use them have a powerful control tool with which to attain departmental and organizational goals.