Question

Colin Currant started Surecut Mowing Services a number of years ago to provide mowing services to both local businesses and households. Over the years, Colin expanded the business and started providing landscape and reticulation services.

Surecut maintains a pool of skilled workers who are contracted to perform the landscaping and reticulation services because these services do not occur on a regular basis. Many of Surecut's full-time employees have been with the firm for a number of years. Five zone managers are each responsible for providing recurring mowing services. In addition, the zone manager sells and schedules non-mowing jobs for the company's central pool of skilled employees. Informal meetings are held periodically to discuss Surecut's performance, personnel allocations and scheduling problems. Surecut's budgeting and planning have been done by Colin, who also manages variations from budgets.

Colin recently decided to retire and sold the business to Commercial Mowing Services which provides similar services in a number of metropolitan locations that surround Surecut's business area. When they heard the news of the sale, several of Surecut's long-term employees appeared resentful of the change in ownership and did not know what to expect. Commercial Mowing Services' senior management met with Surecut's managers and announced that Victor Briggs would become president of Surecut and that Surecut would continue to operate as a separate subsidiary of Commercial Mowing Services. Furthermore, in accordance with Commercial's management philosophy, a responsibility accounting system is to be implemented at Surecut. Also, in line with other Commercial subsidiaries, a participatory budgeting process is being considered. However, no decision will be made until an evaluation of Surecut's existing policies, operational culture and management is completed. In view of the significant change in management philosophy, Commercial has taken considerable time in explaining how each system operates and assuring Surecut's managers that they are expected and encouraged to participate in both the planning and implementation of any of the systems that are to be adopted.

Required:

For the participatory budgeting system initiative being considered for Surecut Mowing Services:

1) Identify two behavioural advantages that could arise.

2) Identify two potential problems that could arise.

3) Discuss the likelihood that the new approach will contribute to the alignment of organizational and personal goals.