A change in strategy nearly always entails budget reallocations because
A. adopting best practices and pushing for continuous improvement tends to reduce costs and reduce overall resource requirements.
B. revamping the performance of value chain activities can be costly.
C. empowering employees to carry out the new strategy elements typically requires substantial new funding and budget revisions.
D. the accompanying policy revisions and compensation incentives tend to require different levels of funding than before.
E. 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.
Answer: E
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