Corporate Level Strategy
Corporate Level Strategy for Long Term Direction and Survival
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All organizations should carry out strategic planning activity at a corporate level to define where they are, where they want to go and how organizations can best get there. The need for a corporate level strategy and strategic planning increases with the complexity of the organization & the uncertainty and turbulence of its environment.
A strategy is a pattern or plan that integrates an organization’s major goals, policies and action sequences into a cohesive whole. The goals state WHAT is to be achieved and WHEN results are to be accomplished. They do not state how results will be achieved. The concept of strategy occurs at different levels of an organization. To distinguish corporate level strategy from those of its component units, we normally use TACTICS to denote the strategies used by component divisions or departments to help attain corporate goals. Corporate Level Strategy is made up of strategic plans at the highest organization and corporate level. It involves portfolio analysis, diversification and primary structure. It is not confined to one particular area – marketing, personnel, production/operational and financial implications are all taken into consideration. It is primarily concerned with the determination of ends such as what business or businesses the firm is in or should be in and how integrated these businesses should be with one another. It covers a longer time period and has a wider scope than the other levels of strategic planning. Operating Level Strategy is primarily concerned with divison plans, strategic business units (SBUs) and business unit strategy. Intranunit Level Strategy deals with functional or deparmental plans and product market plans. Johnson and Scholes identify three types of corporate strategy. - Corporate level strategy – what business or businesses the firm is in or should be in and how integrated these businesses should be with one another. - Business strategy – how each business attempts to achieve its mission within its chosen area of activity. Here strategy is about which products or services should be developed and offered to which markets and the extent to which the customer needs are met whilst achieving the objectives of the organization. It includes corporate planning at the tactical level and consists of the allocation of resources for complete operations. It is means-oriented and is mainly administrative and persuasive in its endeavours. - Functional strategy – how the different functions of the business support the corporate and business strategies. It examines how the different functions of the business (marketing, production, finance, etc) support the corporate and business strategies. Such corporate planning at the operational level is means-orientated and most activities are concerend with the ability to undertake directions. The overall corporate level strategy is concerned with the scope of an organization’s activities and the matching of these to the organization’s environment, its resources capabilities and the values and expectations of its various stakeholders. Many managers complain that the formulation of corporate strategy is too far removed from their likely level of work activity, but an understanding is essential from all manaagement levels is essential. Through the means-end chain, lower-level objectives are inexorably linked to higher-level strategies. An appreciation of these strategies and how they are formulated can be an effective guide to action. The principles of corporate level strategy are equally appropriate for the smaller organizations. Whatever the level on which a manager operates with in organization, he or she can have some influence over the organization’s corporate objectives. A corporate level strategy maps the direction and scope of an organization over the long term which mateches its resources to its changing environment and in particular its markets so as to meet stakeholder expectations. The goals and objectives of a corporate level strategy is survival policy and overall long term direction. Its strategic components are scope of business portfolio, financial, technological and organizational competencies. Major decisions are concerend with financial policies and organizational policies. Managing Strategic Alliances & Corporate MergersIn today’s fast changing economy, speed and low cost are key success factors in driving sustainable development. In line with this aspiration, corporations are stepping up on strategic alliances and corporate mergers to expedite on its markets expansion ambition for greater revenue and earnings growth besides the securing of talents from the corporate exercise. Subsequently, post strategic alliances and corporate mergers issues must be carefully managed in order to ensure clsoe teamwork and seamless integration of business processes to become a true center of operational excellence. Managing Strategic Corporate PlanningThe ability to successfully manage an organization’s sustainable growth requires an effective planning process and the sound coordination of the strategic corporate intent besides rewarding people. In many instances, this will include the Board’s clear calrification of key operating goals for the mangement to efficiently implement and execute the overall corporate plan. Scenario planning of possible economic environment and market challenges are simulated to identify its core competitiveness and its value proposition advantages against the competition. In achieving positive results, gap analysis is to be monitored with people management and motivation to secure good employees’ satisfaction, is vital for continuous improvement moving forward. |
