Question
Download Solution PDFWhich country first introduced zero-based budgeting?
Answer (Detailed Solution Below)
Detailed Solution
Download Solution PDFThe correct answer is The US.Key Points
- The US first introduced zero-based budgeting in the 1960s.
- In the 1960s, ZBB was formally initiated in the Department of Agriculture of the USA and turned out to be more popular in the 1970s.
- The Zero-Based Budgeting applicable today was developed at Texas Instruments Inc. in 1969 by Peter Pyhrr.
- Zero-based budgeting is a budgeting method in which all expenses must be justified for each new period.
- It starts from a "zero base" and every function within an organization is analyzed for its needs and costs.
Additional Information
- India did adopt zero-based budgeting in 1987, but it was not the first country to do so.
- Germany and the UK have also implemented zero-based budgeting, but again, they were not the first countries to introduce this method.
- Zero-based budgeting is often used by businesses and governments to identify areas of inefficiency and to reduce unnecessary expenses.
- There are two techniques for tracking expenses: zero-based budgeting and traditional budgeting.
- Zero-based budgeting aids managers in addressing a company's lowest costs.
Last updated on May 28, 2025
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