Budgeting Process Steps

Hi,

As far as i can comprehend from budgeting textbooks, the few major steps involved in coming up with a detailed budget involved (regardless of software at this moment):

1) study external and internal factors,

2) C level people (CFO, CEO..) come up with corporate objectives in the form of high level numbers, i.e. gross margin, ROI, net income,

3) C level people discuss with senior management on the numbers for corporate objectives,

4) senior management will be guided by the corporate objectives created in step 2, to come up with master financial statements, such as master PnL, master balance sheet, master cash flow

5) equipped with the master forecast financial statements, allocation is done so that certain entities have certain numbers, i.e. sales, cost... to hit

how different is this textbook suggestion from how the real world budgeting is done? and i am a bit confused about step 5 as well, i mean if allocation is done to such a detailed level, where is the contribution from the operation level people? certainly between senior management and operation level, there must be some space that allows creativity of detailed budget creation so that challenges on the numbers can happen. or maybe my concept of allocation is wrong, since i thought everything from sales, raw material cost, sales and admin cost is allocated. it doesn't really make sense, but what number is actually allocated then?

any input on this?

cheers