A change in strategy nearly always entails budget reallocations because
A)revamping the performance of value chain activities can be costly.
B)the accompanying policy revisions and compensation incentives tend to require different levels of funding than before.
C)organizational units important in the prior strategy but having a lesser role in the new strategy may need downsizing, while units and activities that now have a bigger and more critical strategic role may need more people, new equipment, additional facilities, and above-average increases in their operating budgets.
D)empowering employees to carry out the new strategy elements typically requires substantial new funding and budget revisions.
E)adopting best practices and pushing for continuous improvement tends to reduce costs and reduce overall resource requirements.

Question

Quizplus · Accepted Answer

A change in strategy often requires a realignment of resources to support the new strategic direction. This can involve reducing funding for departments and activities that are less important to the new strategy and increasing funding for those that are now more critical. This may involve downsizing some departments while expanding others with new equipment, facilities, and personnel. Therefore, choice C best explains the need for budget reallocations.

A Change in Strategy Nearly Always Entails Budget Reallocations Because