Question

Oklahoma Telephone Company has been forced by competition to put much more emphasis on planning and controlling its costs. Accordingly, the company's controller has suggested initiating a formal budgeting process. Which of the following steps will not help the company gain maximum acceptance by employees of the proposed budgeting system? (CMA adapted)A. Implementing the change quickly.
B. Including in departmental responsibility reports only those items that are under the department manager's control.
C. Demonstrating top management support for the budgeting program.
D. Ensuring that favorable deviations of actual results from the budget, as well as unfavorable deviations, are discussed with the responsible managers.

Answer 1

Answer:

A) Implementing the change quickly.

Explanation:

The company's controller is basically the chief accountant of the company. In this case, he/she is trying to focus on lowering costs and suggest a  formal budgeting process might help. This is an essential thing that should have been done before, probably since the company started operating.

When essential and important activities are not carried out within a company, and suddenly someone realizes that it must be done, it may be seen as something bad. E.g. if it was really so important, why was it never done before?

As all important things, they cannot be rushed, and they have to be done with the largest possible support within the organization. This includes both management (who will feel pressured) and employers (who might believe it is a way to determine who should be fired).