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Decision Making Heirarchy

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Submitted By jhemskiie
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* Corporate level strategy is the overall strategy for a diversified organisation or company. It is usually concerned with a mix of businesses that the company should compete in and also the ways on which individual strategy units are integrated and co-ordinated. * Functional strategy- selection of decision rules in each functional area. Thus, functional strategies in any organization, some (e.g.,marketing strategy, financial strategy, etc.). It is desirable that they have been fixed in writing.

Hierarchical Levels of Strategy

Strategy can be formulated on three different levels: * corporate level * business unit level * functional or departmental level.
While strategy may be about competing and surviving as a firm, one can argue that products, not corporations compete, and products are developed by business units. The role of the corporation then is to manage its business units and products so that each is competitive and so that each contributes to corporate purposes.
Consider Textron, Inc., a successful conglomerate corporation that pursues profits through a range of businesses in unrelated industries. Textron has four core business segments: * Aircraft - 32% of revenues * Automotive - 25% of revenues * Industrial - 39% of revenues * Finance - 4% of revenues.
While the corporation must manage its portfolio of businesses to grow and survive, the success of a diversified firm depends upon its ability to manage each of its product lines. While there is no single competitor to Textron, we can talk about the competitors and strategy of each of its business units. In the finance business segment, for example, the chief rivals are major banks providing commercial financing. Many managers consider the business level to be the proper focus for strategic planning.

Corporate Level Strategy
Corporate level strategy fundamentally is

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