Session 2 - Levels Of Strategy 1z662f

Hierarchical Levels of strategy Corporate level Business level Functional/Operational level

Corporate level strategy • the overall purpose and scope of the organisation • It is formulated by CEO, BOD, Senior Executives and other Corporate staff. • They set objectives, analyse internal and external environment, formulate strategies and ensure implementation

• Eg. Tata group includes Indian Hotels, Tata Auto, Tata Chemicals, Tata Tea, Tata motors etc.. Headed by Chairman Ratan Tata who decides the overall strategies.

Business unit strategy • Second level decision making • It is a self contained division that provides a product or service for a particular market. • Each business or division is called strategic business unit(SBU) • Eg Wipro software division, Reliance Petrochemicals etc..

Functional/Operational strategy • This level is composed of managers of different functional areas HR, Finance, Production, Marketing, Customer service and R&D. • Operational level strategy was encouraged by Peter Drucker in his theory of MBO.

Strategic Management • Strategic management is defined as the set of decisions and actions that result in the formulation and implementation of plans designed to achieve a company’s objectives

“.... the process by which the guiding of an organization envision its future and develop the necessary procedures and operations to achieve that future..” (Goodstein, Nolan, and Pfeiffer, 1992)

Strategic Management – Defined

Art & science of formulating, implementing, and evaluating, crossfunctional decisions that enable an organization to achieve its objectives.

Strategy Formulation Vision & Mission External Opportunities & Threats Internal Strengths & Weaknesses Long-Term Objectives Alternative Strategies Strategy Selection

Strategy Implementation

Annual Objectives Policies Employee Motivation Resource Allocation

Strategy Evaluation

Internal Review External Review Performance Metrics Corrective Actions

Strategic Management Process

• Dell Strategy • Case • http://www.mhhe.com/business/management/thompson/11e/c ase/dell5.html