Strategy Test 3 chapter 8

*Grow with the firm

people have a limit on their capacity to handle information.

each independent division can carve out its own destiny in its product-market and focus on making decisions that best suit its specific competitive environment.

*Board of directors and senior executive that oversees all

is for the interests of the two parties to be aligned.

M

• Here, capital allocation requests are ranked and requests are funded from the “most
• important” onwards till the firm runs out of funds.  The “zero-base” refers to the fact that in each funding period every division starts with a zero-base, meaning there is no
• funding for a project automatically because it was funded in the past.