What is disadvantages of incremental budgeting?

Incremental budgeting has several disadvantages, including its tendency to perpetuate inefficiencies from previous budgets, as it often relies on historical data without considering current needs or changes in the business environment. This approach may discourage innovation and cost management, as departments may feel secure in their existing budgets and avoid seeking improvements. Additionally, it can lead to a lack of flexibility, making it difficult for organizations to respond to unexpected challenges or opportunities effectively.