Question

From a strategy-implementing/strategy-executing perspective, a company's operating budget should

A) Primarily be based on creating more core competencies than rivals have.
B) Be strategy-driven and based primarily on how much each organizational unit needs to carry out its piece of the strategic plan efficiently and effectively.
C) Be based on the resources needed to lower the costs of performing each value chain activity.
D) Provide each operating unit with sufficient funds to undertake benchmarking, adopt best practices, implement Six Sigma and/or TQM, and do cutting-edge business process reengineering.
E) Strongly support the company's established policies and procedures regarding how things are to be done.

Answer 1

A company's operating budget should be strategy-driven, support established policies and procedures, and consider resources needed to lower costs.

Step-by-step explanation:

From a strategy-implementing/strategy-executing perspective, a company's operating budget should be strategy-driven and based primarily on how much each organizational unit needs to carry out its piece of the strategic plan efficiently and effectively. This means that the budget should allocate sufficient funds to each unit to ensure that they can perform their activities and tasks in line with the company's overall strategy.

Additionally, the operating budget should support the company's established policies and procedures regarding how things are to be done. This ensures consistency and alignment with the company's overall objectives and ensures that resources are used effectively.

Lastly, the budget should also consider the resources needed to lower the costs of performing each value chain activity. By identifying areas where costs can be reduced and allocating resources accordingly, the company can improve its competitiveness and financial performance.