Renaldo' s Boutiques, Inc., has 14 stores located in a midwestern part of the United States. Renaldo, the president of the company, has set budgets for each store that do not allow for lost, stolen, or misplaced merchandise (inventory shrinkage). Research shows the disappearance of store merchandise is attributed to a combination of internal and external causes. Customer theft35 percent

Employee theft40 percent

Administrative errors18 percent

Vendor dishonesty7 percent

This chapter discussed two types of budgeting philosophies( the behavioral approach and the total quality management approach). Which philosophy do you believe Renaldo is following? Use the information in this problem to support your answer.