Participative budgeting

Discuss the behavioral implications of budgetary slack and participative budgeting. 

A great deal of study has been devoted to the behavioral effects of budgets. Two key issues that a pharmacy manager should clearly understand are budgetary slack and participative budgeting. 

While participative budgeting can be very effective, it can also have shortcomings. Too much participation and discussion can lead to vacillation and delay. Also, when those involved in the budgeting process disagree in significant and irreconcilable ways, the process of participation can accentuate those differences. Finally, the problem of budget padding can be severe unless incentives for accurate projections are provided. 

Why is participative budgeting often an effective pharmacy management tool ... 

Determining who will have responsibility for completing each task or step of a project should be done as early as possible, so that they can participate in the planning of both schedules and budgets. This participation leads to a greater commitment to achieve the project within time and cost limitations. 

The program was championed by Lars Akeson, the HR Director of the Division, and its global implementation was co-ordinated by Malin Boultwood, Manager of Competence and Culture. Boultwood is still responsible for managing the scheme, which means that she matches mentors and mentees, organizes the training, and carries out evaluations. The scheme is funded partially by the participants departments and partially from the central HR budget. 

Obviously, the greater the number of subjects studied, the larger the cost. Nevertheless, having too few subjects may lead to inconclusive results, requiring that the study be repeated. Another important consideration is the availability of qualified participants. If the inclusion and exclusion criteria are very restrictive, the cost of recruiting subjects may exceed that of the actual testing. In pharmaceutical development trials, it is not unusual to see recruitment budgets of US 500- 1000 per randomized subject. Thus, for a Phase III development study with several hundred participants, often more than US 500 000 in cost is allotted to efforts to identify qualified subjects who are interested in participation. 

Among elderly women as much as 80% suffer from involuntary voiding of the bladder, urinary incontinence (UI). In the United States approximately 12.5 million people are affected by incontinence and a European study showed a prevalence of between 12% and 22% in all ages and an increase to 30-40% in ages over 75 years (Hampel et al. 1997). Women experience UI twice as often as men. Incontinence becomes more common in old age, with existing co-morbidity of all kinds and life styles (Box 5.5). There are different forms of urinary incontinence and they differ in cause and treatment. This problem causes not only personal distress but also a considerable cost for society as a whole (Jackson 1997). Lower quality of life is often reported in people with UI and the risk increases by the withdrawal from social interaction and participation in sports and other activities. An estimated cost for the care of patients with UI in the United States was approximately 26 billion dollars in year 1995 (Wagner and Hu 1998). Other studies have come up with a calculated cost that represents two percent of the total national health budget. 

Most of the participants did not share the United State s zeal for prohibiting the nonmedical use of opium, since they had a vested interest in protecting their profits from this commodity. Britain, for example, feared that the suspension of the Indian opium trade would lead to an unbalanced budget. However, the attitude of the U.S. delegates at the meeting was that a worldwide prohibition of habit-forming drugs needed to be enacted. Despite the lack of enthusiasm by most of the participants, the commission did resolve that each country should take drastic internal measures to... 

The budget is consistent with that. It has a 17 percent increase for the National Science Foundation, and if you look at the budgets of the individual sectors—mathematical and physical sciences, social sciences, biological sciences—you find that there are increases between 15 and 20 percent. There is an initiative within that budget to do research on the participation of women and minorities in science and technology. There is the commitment there. There is a corresponding increase of 13 percent, as I recall, for the Department of Energy s Office of Science. 

---