Answer (D) is correct . Lack of goal congruence can result when attaining a subunit’s budgetary goal results in disregard of overall company goals. Subunit managers may inflate their budget requests to provide operating leeway and then engage in unnecessary spending to avoid future budget cuts. A budget may encourage exclusive concentration on meeting short-term standards at the expense of long-term considerations. A manager fearful of not meeting the budget targets may improperly manipulate allocation of expenses. The manager seeking to stay within the budget may disregard employee morale and poor working conditions. Interunit resentment may develop as a result of competition for scarce funds.
Answer (A) is incorrect because All of the listed effects might occur because of an improperly executed budget process.
Answer (B) is incorrect because All of the listed effects might occur because of an improperly executed budget process.
Answer (C) is incorrect because All of the listed effects might occur because of an improperly executed budget process.
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