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What happens if managers exceed their budgets?

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What happens if the managers exceed their budget? Are there any repercussions?

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Solution Summary

This solution of 615 words details the repercussions of a manager exceeding the budget with examples.

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In an typical corporation, if a manager exceeds his or her budget, the first course of action is a meeting with his or her superiors. The tone of the meeting will depend upon the amount by which the budget was exceeded. For example, if a departmental manager had a $1,000,000 budget and overspent by $15,000 the supervisors might mention it and state that they expect that it won't happen again. Depending upon how good of a job the manager/department was doing, nothing might be said at all.

For a gross overspending (say a $1,000,000 budget was allocated and $1,150,000 was spent), several things will happen. For one, this large of an overspent amount will catch the eyes of senior executives and will likely spark several meetings. The manager would ultimately be 'called on the carpet' and would have the opportunity to explain the overspending. Perhaps there is a logical explanation and perhaps ...

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