Preferred Sensor Case

I think Sean would pursue a top-down approach. For an organization, in time and taking into consideration the taut of the top management and the main goals, the process of constructing the budget could be the top-down approach, where top level managers establish the main rules to elaborate the budget. Top-down budgeting is a planning system in which the budgeting process starts with a flow of information from the top of the organization down to the lower levels of the organization.

In this case, there are several advantages if Sean would use a top-down budgeting approach. First, Allocating budget and resources, from the beginning, for the tasks at a high-level, determine more effective usage of those resources. This situation could be observed in a smaller overall budget and also in better results. Second, in the top-down budgeting approach, money is allocated at the beginning for the tasks from the top-level in the major project and, after that, to the lower level tasks. This pattern could help project managers and company executives to assign in a better manner their restricted resources and manage their costs in an effective way. Third, using top-down budget approach presumes a wide range of experience, knowledge and ability to accomplish that situation; without this, the resulting project could be either underfunded or, sometimes, overfunded.

However, there are several reasons that bottom-up approach is not appropriate for this case. First, In a bottom-up budgeting system, the managers who elaborate budgets know that will be asking for limited resources that other department budgets also need or wish to use it. In that case, managers tend to overestimate costs or pad their budget figures. Second, a bottom-up approach required managers, who detain professional positions based on their specialized skills in specific fields, to perform the same administrative tasks as those that deals with this kind of skills. Even though there are managers who excellent...