What characterizes the bottom-up budgeting approach?

The bottom-up budgeting approach is characterized by requiring line item justification each year, which is a key feature of this method. This approach involves lower-level managers and staff actively participating in the budgeting process, allowing them to provide input on their departmental needs and resource requirements. Each line item in the budget must be justified based on the specific needs and objectives of the department, making it a more detailed and participative process.

This method contrasts with other budgeting approaches that might rely heavily on previous spending levels or historical averages, which can lead to a lack of detailed understanding of current needs and priorities. Additionally, minimal involvement from managers would not align with the main tenets of bottom-up budgeting, as this approach emphasizes engagement and accountability from all levels in the organization. Therefore, the focus on line item justification presents a thorough, collaborative, and dynamic approach to budgeting within an organization.