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 tend to reduce costs and overall resource requirements.

Question

Quizplus · Accepted Answer

A change in strategy often involves changes in the roles and importance of various organizational units and activities. As a result, some units may need to be downsized while others may require additional resources such as people, equipment, and facilities. This usually means reallocating budgets to ensure that adequate resources are allocated to the new strategic priorities. Option A is not always true as revamping value chain activities can also lead to cost reductions. Option B may be true for some policy and compensation revisions, but it does not capture the broader budget reallocations that usually accompany a change in strategy. Option D is not necessarily true for all new strategy elements. Option E suggests that best practices and continuous improvement can reduce costs, but this is not necessarily related to budget reallocations.

A Change in Strategy Nearly Always Entails Budget Reallocations Because