Question 4 (Total: 20 marks)

CV Sdn Bhd is a manufacturing company, who has been using participative budgeting in promoting a higher productivity level amongst its employees. However, due to the COVID-19 pandemic, the company's productivity in terms of inputs, outputs or prices, have been badly impacted. CV's new CEO is now questioning the effectiveness of using the participative budgeting in promoting a higher productivity level especially during this unpredictable new normal. He argued, "Everything is so uncertain, participative budgeting is a waste of time and we should just adopt the imposed budget".

Required: Do you agree with your CEO? Critically discuss the validity of your CEO's statement. Present at least one practical illustration to support each of your discussion.