Premium Essay

Policy Budgeting

In: Business and Management

Submitted By JosephGreenway
Words 1791
Pages 8
Erik Chadwell
PPA 265
November 21, 2014

How are Traditional and Zero Based Budgeting approaches similar and different within public administration and where are they now?

Within organizations it is always smart to be prepared for changes that happen inside of your business so can you react accordingly to them, and this all starts with financial management. Every organization needs money and the use of that money determines the extent of the activity that can be done. The way to accomplish certain goals and objectives is by preparing a budget to translate those financial resources to actual happenings. A budget is a written plan that estimates and proposes alternate expenses for certain items and other purposes; essentially it puts prices on goals. Budgeting is mainly to prioritize the allocation of resources, so you can make a plan to reach an objective. The use of traditional “incremental” budgeting and zero based budgeting have made their appearances in history, mainly opposing each other on opposite ends of the spectrum, although either may be favored for your organization pending on your preferences on achieving your goals. While there is a similarity between the two of supporting the planning and decision making of the organization, the focus here is how they contrast one another and how they are used. To be discussed are the contrast points between the two approaches which are contained in the process of which they gather data to make their budgets and the way they implement their budget actions. The traditional budgeting process was a theory formed by Aaron Wildausky that erupted in America. The budget is produced by using the historical budgets of the previous year to eventually determine the upcoming year’s budget. The decisions on the budgets are determined by the top management within the organization which causes more control on conflict and…...

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