A company's operating budget must be both:
A) strategy-driven in order to amply fund the performance of key value chain activities and lean in order to operate as cost effectively as possible.
B) risk-averse,so as not to run the risk of inadvertently creating barriers to building the needed competencies and capabilities,and best practices-driven to drive continuous improvement.
C) employee-driven to gain commitment to strengthening the company's core competencies and competitive capabilities and profit-driven to ensure adequate financial resource allocations.
D) action-driven in order to reflect a sense of activity and lean in order to operate efficiently.
E) All of these.

Question

Quizplus · Accepted Answer

The operating budget should balance two important aspects- it needs to be strategy-driven to fund key activities and operations and at the same time, lean to be cost-effective. Option A best defines this balance. Option B is incorrect because risk-averse budgeting may limit the company's ability to build competencies and capabilities, which could hinder the organization's growth. Option C and Option D are not correct as they do not capture the balance between strategy and cost-effectiveness.

A Company's Operating Budget Must Be Both