Page 203 - DCOM506_DMGT502_STRATEGIC_MANAGEMENT

Unit 10: Strategy Implementation

Operating Budget: Necessary for more routine resource allocation for conducting operations. Notes
Top-down Approach: In this approach, resources are allocated through a process of segregation
down to the operating levels. The Board of Directors, the Managing Director or members of top
management typically decide the requirements of each subunit and distribute resources
accordingly.
Zero Based Budgeting: Budget requests in detail from the scratch, without relying on the previous
budget allocations.

10.8 Self Assessment

Fill in the blanks:
1. ..............................are the core values of the company that are evidenced in the corporate
culture and the general work ethic.
2. ....................represents the competencies of the employees working for the company.
3. Resource allocation deals with the ......................and ...................... of financial, physical and
human resources to strategic tasks.
4. ...................... budget specifies materials, labour, overheads and other costs.
5. ...................... and ‘political’ considerations are inevitable in a typical organisation.
6. The common approach to resource allocation is through ...................... system.

7. In BCG Matrix, the ...................... represent low growth and low market share.
8. ...................... budgeting system provides for transfer of funds from one unit to another if a
fall is expected in actual activity level in a particular unit.

9. ...................... budgeting techniques can be used for long-term commitment of resources.
10. The problem with resource allocation is that the requests for funds usually ......................
the funds normally available.

10.9 Review Questions

1. Does a successful strategy formulation guarantee a successful implementation? Why/
why not?
2. “Strategic decisions to be communicated and understood throughout the organisation”.
Elucidate.
3. Why is it said that using a formula approach in resource allocation may be
counterproductive. Discuss with reasons accompanied with examples.
4. “There has to be a “fit” between the strategy and the organisation.” Substantiate
5. “Formulation and implementation are inextricably linked”. Discuss
6. Bring out the differences between formulation and implementation of strategy.

7. Discuss the relevance of McKinsey’s 7-S model in modern business organisations.
8. Critically evaluate the McKinsey’s 7-S Model.
9. “Resource allocation is a powerful tool to communicate the strategies of the organisation”.
Justify

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