A key behavioral risk of participative (bottom-up) budgeting is:

A key behavioral risk of participative

Multiple choice — select the best answer

AReduced employee buy-in
BBudgetary slack created by managers padding estimates
CLack of operational knowledge in the budget
DInability to motivate employees

✓ Correct answer: B. Budgetary slack created by managers padding estimates When managers help set their own targets, they may build in slack (understating revenue or overstating costs) to make targets easier to achieve.

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Topic: Planning & Budgeting

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