Top Down Budgeting Strategy Writing Assignment (Other (Not Listed) Sample)

Top-Down Budgeting Strategy
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Background
According to researchers Chiu and Russell (2011), the recent years of complex project management has seen project managers debate heavily on the effectiveness of top-down budgeting for project management as compared to the bottom-up approach. Chiu and Russell (2011) define the top-down budgetary approach for complex project management and effective resource management as an approach with more feasibility as to what is expected during a project than the bottom-up approach. Top-down budgetary approach considers and concentrates on the use of magnitudes in rough order that offer little to no explanation on the actual estimate of resource needs for a particular project. That notwithstanding, the researchers find that this approach is much more feasible as far as effectively managing resources in within a project is concerned when compared to the other type of budgetary approach.
Further research evidence agrees with the above espoused position and adds that while top-down budgetary approach does not openly provide an actual estimation of the expected resource input for a project, the fact that it is involved in a project from the early stages of the project ensures that it captures most if not all the needs and requirements of a project and puts them into consideration (Alketbi and Gardiner, 2014). Thanks to the above, Alketbi and Gardiner therefore inform that the top-down budgetary approach is able to provide scaffolding for the desired qualities that are responsible for the success of a project as far as producing high returns of the initial investment is concerned. The researchers therefore openly advice that in order for a company or any running project to maximize and attain a balance between the resources and efforts inputs and the economic outcomes attained, it is primary that the top-down budgetary approach is implemented. The ability of the top-down approach to guarantee higher returns for the input resources is no doubt one of the reasons why it has in the recent years become an important consideration for projects that require heavy investment.
Kramer and Hartman (2014) in a study of over a hundred middle-sized German companies and their managers reach the findings that the top-down budgetary approach is important in attaining economical gains as compared to the bottom-up approach which mostly attains social gains. This position is concurrent with the previous researcher’s position that the top-down budgeting approach promotes more returns on the invested resources when assessing a project lifecycle. Kramer and Hartman’s hypothesis is that the top-down budgetary approach in the subsequent stages of the budgetary process is important in improving the manager’s economic exchange with the other project players. This consequently contributes to the sufficient and efficient management of resources to the effect that the returns gained during and after the project are impressive to the managers. The overall finding from the research is that German firms have in the recent years adopted the top-down budgetary approach owing to the fact that it offers more returns from a feasibility perspective when compared to the bottom-up budgetary approach.
The International Monetary Fund white paper on the top-down budgetary policy best helps in understanding this new and highly favored budgeting approach. According to the white paper, the top-down budgetary approach is an approach that was conceived by the capitalists and the investors as an approach that provides them with surety and security for their money (Ljungman, 2009). In that case therefore, the investors using this approach become more confident that their investment will be protected by the managers of the funds owing to the fact that there are a number of layers through which the funds are managed for implementation into a project. According to the white paper, it further brought to the understanding of the reader that with a top-down budgeting model for any project, the sequence of decision are taken based on a number of factors and these provisions provides for the fiscal discipline in projects which goes a long way in convincing investors to lend monies to projects. While promoting fiscal discipline, the structure utilized in a normal top-down approach which involves the delegation of funds for a specific aspect of the project to different line managers ensures the prioritization of the project aspects, proper coordination of the projects and strict adherence to set policies for the project delivery. This according to Ljungman (2009) is important in ensuring that more returns are met from the resources invested in a project and as far as protecting the invested funds is concerned; the structures ensure that the money is properly delegated for the effective use in the delivery of projects.
From a community development perspective however, the top-down project budgetary approach has been criticized for maintaining the gentry’s position and extending the rule of the rich over the poor. This is according to research evidence from the Mediterranean Journal of Social Science which posits that while the top-down model of community project management may at times attain the community development objectives set out, the model is only enforced to ensure that the investors get more returns from this social responsibilities (Isidiho and Sabran, 2016). This position seems to be in contradiction from the previously espoused positions that the top-down budgetary model is responsible for the effective management of resources in order to attain the goals for the investment of the resources in the first place. The researchers in a study of community development projects around the Mediterranean indicate that the bottom-up approach offers more returns to the community unlike the top-down model which offers returns to both the community and the investors of the resources. From a deductive perspective, it is no doubt that the researchers in this case are more concerned about striping the investors off any returns than how the budgetary approach ensures discipline in the management of funds. The issue portrayed in this case is therefore much of a social inequality issue than it is a valid critique issue on the top-down budgetary approach for project management. This can be justified by the fact that while criticizing and suffering pains for the returns to the investors, Isidiho and Sabran (2016) still concede that the top-down approach is however not wrong in as far as delivering as per the goals of a community project are concerned.
Advantages and Disadvantages
From literature evidence shared, there is no doubt that the advantages related to top-down budgeting approach are far much more than the disadvantages thereof. This section will concentrate on sharing the advantages of top-down budgeting strategies.
One of the already mentioned advantages of this form of budgeting is that the rough order structure is in the long-run important in guaranteeing the effective management of resources in a project. According to Kadhka and Vacic (2012), the delegative nature of the top-down budgeting approach ensures that people take responsibility for the effective management of allocated resources and therefore the strategy is instrumental in providing effective resource management.
Another advantage of the top-down budgeting approach especially when compared to the bottom-up approach is the fact that the former guarantees more economic returns for the invested resources than the latter. Researchers Kim, Sting and ...