22. Strategy Implementation and Budgeting

Question 1

When is an organization effectively implementing its strategy?

Answer 1

An organization is effectively implementing its strategy when spending and investing clearly tie to the organization’s strategic objectives.

Question 2

Describe strategy implementation.

Answer 2

Strategy implementation involves identifying short-term objectives, and then establishing processes to achieve those objectives.

Question 3

Describe the three elements of the decision-making and management process for achieving operational objectives.

Answer 3

• Planning: where the strategy is defined into operational objectives, performance measures are set, and resources are committed.
• Controlling: requires that expectations are established and incentivized, results are gathered and reported, and variances from the budget are computed.
• Evaluating: involves rewarding performance, analyzing results, and using the insight gained to inform the planning stage for the upcoming operational cycle.

Question 4

What are characteristics of successful budgeting?

Answer 4

• Budget connects to and supports the organization’s strategy
• Budget is firm yet flexible
• Budget represents forecasts of external and internal factors
• Everyone in the organization understands and commits to the budget
• Budget should be motivating for everyone in the organization
• The results of every budgeting cycle should be assessed and that insight should inform and improve the next budgeting cycle