A. With open communication between the division manager and senior management all of the options can be discussed and a mutually acceptable budget can be developed. Once this budget is developed, the implementation is best left to the division manager because the division manager understands the process, employees, and environment better than senior management can, as senior management is not actively involved in the day to day operations.

B. Senior management should prepare the corporation's overall plan prior to budget development. The corporate plan is likely to be longer term and include elements both external and non-financial that a budget does not address.

C. While the manager may view his budget for the division as generating the most profit, generally he/she is unaware of what is going on elsewhere within the organization. Without this knowledge, the division manager may be headed in a different direction than what is necessary for organization wide success.

D. When senior management develops goals they can miss opportunities or issues known by the division manager. Rarely does one entity fully understand everything that happens with other entities. Communication is essential.