Question

​"Strategy, plans, and budgets are unrelated to one​ another." Do you​ agree? Explain. A. Strategies and...

​"Strategy, plans, and budgets are unrelated to one​ another." Do you​ agree? Explain.

A.

Strategies and plans are related and affect one another. Plans are formed based on the strategies of the company. Budgets are not impacted by the strategies and plans of a company. Budgets are solely based on the performance expectations for the period.

B.

​Strategy, plans, and budgets are unrelated to one another. Strategies look at the opportunities in the marketplace. A company creates plans to determine what it will accomplish in the​ long-run and​ short-run. Budgets provide a blueprint as to how the company will perform in the coming period.

C.

​Strategy, plans, and budgets are interrelated and affect one another. Strategic analysis underlies both​ long-run and​ short-run planning. In​ turn, these plans lead to the formulation of budgets. Budgets provide feedback to managers about the likely effects of their strategic plans. Managers use this feedback to revise their strategic plans.  

D.

None of the above

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Answer #1

The correct answer is C. ​Strategy, plans, and budgets are interrelated and affect one another. Strategic analysis underlies both​ long-run and​ short-run planning. In​ turn, these plans lead to the formulation of budgets. Budgets provide feedback to managers about the likely effects of their strategic plans. Managers use this feedback to revise their strategic plans.

Strategies are specific ways to achieve the plans of the business.
Plans are the predetermination of the events of the business regarding what to do, how to do, who will do the activities of the business. It is looking forward for the future course of activities of the business.
Budgets are quantitative representation of the future activities of the business.
​Strategies, plans, and budgets are interrelated and affect one another. Strategies are formulated based on the plans made by the business. To achieve these plans, there should be some strategies- short term as well as long term strategies, to be followed. Based on the plans and their strategies, financial estimation of the expected performance, which is called budget, is formulated. Managers can compare the actual performance with the budgeted performance, find devitaions, take corrective measures and revise their plans and strategies based of the performance analysis. Thus, Budgets support strategies and strategies support plans. These three aspects are closely interelated with one another.

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