A Company's Ability to Marshal Adequate Resources in Support of New

question 4

Multiple Choice

A company's ability to marshal adequate resources in support of new strategic initiatives and steer them to the appropriate organizational units is important to the strategy execution process because

• A) changes in strategy often require resource reallocation and,therefore,directing the proper amounts of resources to strategy-critical organizational units because they need the proper funding to carry out their part of the strategic plan effectively and efficiently.
• B) accurate budgets are the key to exercising tight financial controls over organizational units.
• C) tight budget control is management's most powerful tool for first-rate strategy execution.
• D) lean,carefully managed budgets protect the company's financial condition and eliminate wasteful use of cash.
• E) lean,strictly enforced budgets are management's best and most used means of getting organizational units to exercise fiscal discipline.

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Definitions:

Profit Margin

A financial metric expressing the percentage of revenue that remains as profit after all expenses are deducted from gross sales.

Target Cost

The desired cost of producing a product, determined by subtracting a desired profit margin from a competitive market price, aimed at ensuring market competitiveness.

Traditional Costing Systems

Costing methods that assign manufacturing overhead to products based on a predetermined overhead rate, often using direct labor hours as the allocation base.

Design Costs

Expenses associated with the process of creating and developing a plan or specification for the production of objects or systems.