Managers Charged with Implementing and Executing Strategy Need to Be

question 18

Multiple Choice

Managers charged with implementing and executing strategy need to be deeply involved in the budgeting and resource allocation process because of all the following reasons EXCEPT

• A)too little funding deprives organizational units of the necessary resources to execute their piece of the strategic plan while too much funding wastes organizational resources and reduces financial performance.
• B)resource allocation involves screening of requests for people, facilities, and equipment, and approving them whether they contribute to the strategy execution effort or not.
• C)without major budget reallocations there is little chance that desired core competencies and organizational capabilities will emerge.
• D)lean, carefully managed budgets protect the company's financial condition and eliminate the wasteful use of cash.
• E)a change in strategy nearly always calls for budget reallocations and resource shifting.

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Definitions:

Opportunity Cost

The real cost of an item: what you must give up in order to get it.

Explicit Cost

Direct, out-of-pocket payments for expenses incurred in business operations, such as wages, rent, and materials.

Monetary Cost

The amount of money that must be paid or spent to acquire goods, services, or assets.

Implicit Cost

The opportunity costs that arise from using assets, resources, or funds in specific ways rather than the next best alternative.