The budgeting process should be one that motivates managers and employees to work toward organizational goals. Which one of the following is least likely to motivate managers?

Answer (D) is correct. A budget is potentially a good motivational tool. If lower-level managers have participated in preparing the budget, instead of simply receiving a budget imposed by top management, they are more likely to understand and share the goals of top management and to work to keep costs within the budget. Participation and understanding are also likely to result in budgets that are reasonably attainable and viewed as realistic. However, a budget is also a motivator in the sense that managers are accountable for variances in controllable costs but are rewarded for good performance. Moreover, budgeting coupled with analysis of variances tends to improve motivation by allowing upper-level managers to concentrate on problems (exceptions) rather than engaging in routine intrusive and unwelcome.