Allocation of financial and non-financial resources is one of the main activities of management, which makes the implementation of the strategy possible. In organizations where strategic management has not been implemented, resource allocation will be based on personal or political factors. In strategy-oriented organizations, resources are allocated based on priorities set by annual goals. One of the major obstacles to the successful implementation of the organization’s strategy is the failure to link the executive plans and prioritize the allocation of resources to long-term strategic plans.
Many organizations now have a separate process for their long-term strategic planning and annual and short-term budgeting. Every organization has at least four types of resources that must be allocated to achieve the desired goals: financial resources, physical resources, human resources and technology resources. Allocation of resources efficiently and to achieve the desired level of production, distribution and consumption goes back to investment and pricing beyond the economy in conditions of full competition.