Question: If budget performance is overemphasized, myopic behavior can occur where a manager takes actions that get better budgetary performance in the short run but cause long-run harm to the company.
Required:
[A] Give some examples of myopic behavior that might be encouraged if there is an overemphasis on budgets as a performance measure.
[B] Recognize and discuss the key features that a budgetary system should have to encourage managerial, goal-congruent behavior.