ou started working in the accounting department of Enormco and part of your job is preparing the annual budget. Before this job you worked in smaller companies where the budgets were drafted by you and then reviewed by the responsible manager. The goals were discussed and a budget was finalized working together with each manager. The final a budget was consolidated and presented to the owner who reviewed it and usually made minor modifications after reviewing it with the manager who prepared it. When you started the same process at Enormco you were told by your boss that you prepared the budget for all areas based on current costs and input from him. It was then consolidated and presented to the CFO who reviewed it, made changes and then issued it to the board as the budget for the next year. When you asked your boss about the approach versus what you had done in the past he told you that the managers did not understand the total business well enough to be able to be able to make the right decisions for their area so it was done by staff and presented to them so they could know what they had to do.

Is your boss right? Compare and contrast the two approaches and discuss which method would be the best for Enormco.