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Strategic Management - Strategy Implementation

Resource Allocation Process - Planning And Resources Allocation

   Posted On :  26.06.2018 11:43 pm
Resource Allocation Process - Planning And Resources Allocation

A framework for the strategic budgeting process is shown in the following chart.

Resource Allocation Process
 
A framework for the strategic budgeting process is shown in the following chart.



Source
 
William F. Glueck & Lawrence R. Jauch, Strategic Management .
 
Top management initiates the process. In large organizations the budget department at the headquarters provides all information to the SBUs and advises them in connection with preparation of budget proposals.
 

Strategy communication


As the first step in the process, the corporate objectives and strategy are stated along with the environmental and competitive conditions to be communicated to the SBUs (organizational units).
 

SBU initiative

 
They in turn draw up preliminary budgets after defining the unit-wise objectives and strategies.

Negotiation

 
 
The process involves a series of negotiations among managers at the SBU and corporate levels. For instance, unit manages having defined the objectives and strategy of the unit prepare the premises and forecasts which are sent for approval by the top management.
 

Preliminary budget

 
 
Tentative allocation of resources takes place at the corporate level and budget proposals are called for on that basis. The preliminary budgets indicate changes in the resource requirements as compared with the previous period.
 

Proposals sent

 
 
Based on the preliminary budget units draw up their plans and programmes. And make proposals. The proposals are sent for consideration of the top management by the SBUs.
 

Approval

 
Only on approval of the proposals the 
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