Management's ranking of business units and establishing a priority for resource allocation should
A)always make the company's business units with strong resource strengths and competitive capabilities the central focus of funding initiatives.
B)put business units with the brightest profit and growth prospects and solid strategic and resource fits at the top of the investment priority list.
C)utilize activity-based costing and benchmarking to determine the funding needs of each business unit.
D)first consider the strength of funding proposals presented by managers of each division or business unit.
E)give priority for funding to cash hog businesses.

Question

Quizplus · Accepted Answer

Management should prioritize business units with the brightest profit and growth prospects and solid strategic and resource fits at the top of the investment priority list. This approach aligns with the company's overall goals and objectives and ensures that resources are allocated to the areas with the greatest potential for success. Other factors such as resource strengths, competitive capabilities, funding proposals, and cash requirements may be considered, but they should not override the importance of focusing on profitable growth opportunities. Utilizing activity-based costing and benchmarking can also provide valuable insights into the funding needs of each business unit, but they should not be the sole determinant of resource allocation priorities.

Management's Ranking of Business Units and Establishing a Priority for Resource