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How does ZBB support cost management and strategic reallocation? How does ZBB relate to activity-based budgeting? How does ZBB improve resource allocation compared with incremental budgeting? How can ZBB be combined with continuous improvement or lean thinking? How do modern 'ZBB 2.0' approaches use technology and data? How do you sustain the benefits of ZBB over time? How does ZBB interact with strategic priorities during ranking? What governance is needed to make ZBB effective and lasting?
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Budgeting & Forecasting › Zero-Based Budgeting

What are the risks of ZBB being reduced to a cost-cutting exercise?

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Answer

If ZBB is used purely to cut costs, it can damage value-adding activities, morale, and long-term capability, and encourage managers to game packages defensively. Done well, ZBB is about reallocating resources to value, not indiscriminate cutting—so leadership should frame it around value and reinvestment, with balanced criteria.
Real-world example Framed only as cuts, ZBB triggers defensive gaming; framed as reallocation, it improves value.

Common follow-ups: What harm can a cost-only focus cause? | How should ZBB be framed?

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All 34 Zero-Based Budgeting questions