chapter 12b pageout

chapter 12b pageout - Question Pool: Strategic Management,...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Question Pool: Strategic Management, 12e (Thompson) Chapter 12 1. How a firm's budget allocates resources to its various departments and value chain activities is important to the strategy implementation and execution process because a. changes in strategy often require shifting resources from one area to another and because organizational units need the proper funding to carry out their part of the strategic plan effectively and efficiently too little funding slows progress and impedes the efforts of strategy-critical organizational units to carry execute their roles proficiently b. strong budgets are the key to exercising financial control over what organization units can and cannot do in carrying out management's directives to execute the chosen strategy proficiently. c. budgets are management's foremost device for controlling organizational behavior in a strategy-supportive fashion. d. lean budgets protect the company's financial condition and eliminate wasteful use of cash. e. budgets are management's best and most used means of getting organizational units to exercise the fiscal discipline needed to execute the chosen strategy in a cost-efficient manner. 2. 3. Managers charged with implementing and executing strategy need to be deeply involved in the budgeting and resource allocation process because a. too little funding deprives organizational units of the resources to carry out their piece of the strategic plan. b. changes in strategy often require shifting resources from one area to another. c. without major budget reallocations there is no chance for the desired core competencies and organizational capabilities to emerge. d. lean budgets protect the company's financial condition and eliminate wasteful use of cash. e. Both A and B. 4. 5. From a strategy-implementing/strategy-executing perspective, budget allocations should primarily be based on a. the number of new strategic initiatives being implemented in each department. b. the number of people employed in each of the divisions. c. how much each organizational unit needs to carry out its part of the strategic plan efficiently and effectively. d. the costs of performing value chain activities as determined by benchmarking against best-in-industry competitors.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
e. how much stretch there is in each department's objectives and what additional resources are needed to help reach these performance targets. 6. 7. New strategies often entail budget reallocations because a. more money will be needed to fund the new strategy initiatives. b. the accompanying policy revisions and compensation incentives tend to require different levels of funding than before. c. the value chain activities and organizational units critical to executing the old strategy are not necessarily as critical in executing the new strategy, thus making it cost-effective to shift resources out of areas that now have a lesser strategy-executing role and redirecting them to the value chain activities now having a bigger
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 10/02/2011 for the course FIN 685 taught by Professor Grady during the Spring '11 term at Texas A&M.

Page1 / 14

chapter 12b pageout - Question Pool: Strategic Management,...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online