He said: "Buying a whole lot of stars and hoping to mould them together is one way of doing it, but it is not Arsene's way.
"He prefers to build long-term as best he can and develop young players in the way he wants them to play. I am personally very much in favour of that."
Hill-Wood, though, insists such tough decisions are a necessity.
He said: "Maybe people need to be waking up to the realities of the world and that the days of easy money have come to a pretty sudden end.
"There is an awful lot of talk about big transfers and major demands of players, but you will find throughout the UK and Europe that money is not quite as easy to obtain as it used to be."
Hill-Wood added: "A lot of people don't seem to realise that in the long run you must run a football club on a sensible commercial basis.
"A lot of the figures bandied around at the moment don't make commercial sense to us. That is what disappoints me, that people are prepared to do what can be construed as very silly things."