Consider the Following Statements About Budgetary Slack

question 17

Multiple Choice

Consider the following statements about budgetary slack:
I. Managers build slack into a budget so that they stand a greater chance of receiving favorable performance evaluations.
II. Budgetary slack is used by managers to guard against uncertainty and unforeseen events.
III. Budgetary slack is used by managers to guard against dollar cuts by top management in the resource allocation process.
Which of the above statements is (are) true?

• A) I only.
• B) II only.
• C) I and II.
• D) II and III.
• E) I, II, and III.

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Definitions:

Perceived Pressures

The sense of urgency or demand that an individual feels from external sources or internally, impacting decision-making or behavior.

Distributive Negotiation

A negotiation strategy in which parties view the resources as fixed and aim to maximize their own share.

Soft Distributive Negotiation

A negotiation style focusing on collaboration and win-win outcomes, emphasizing relationship preservation over maximizing individual gain.

Myth of the Fixed Pie

A misconception in negotiation that assumes the parties involved have directly opposing goals, making it impossible for both sides to achieve their objectives simultaneously, promoting a win-lose mindset.