Please discuss, in detail, what is meant by a hierarchy of strategy According to our textbook, A hierarchy of strategy is a grouping of strategy types by level in the organization. Hierarchy of strategy is a nesting of one strategy within another so that they compliment and support one another (Wheelen Hunger, 2012, p. 20). A companys functional strategies are nested within its business strategies, which is in turn nested in the overall corporate strategy. Since Im in the Air Force, I like to compare this to the different functional levels of command tactical, operational, and strategic. Each is nested within each other and compliments/supports one another just like a hierarchy of strategy. Most members operate at the tactical level (functional) then move up to the operational level (business) as they get promoted through the ranks. Leaders operate at the strategic level (corporate) ensuring that the overall mission/direction of the organization is being accomplished according to plan. Although a hierarchy of strategy is optimal for most companies, many companies feel that a functional organizational structure is not an efficient way to organize activities, so they have reengineered according to processes or strategic business units (SBUs).
A SBU is a semi-autonomous unit that is usually responsible for its own budgeting, new product decisions, hiring decisions, and price setting. An SBU is treated as an internal profit centre by corporate headquarters (Strategy, 2014). QUESTION 2 Please discuss, in detail, what you think constitutes a good corporate strategy and why Our textbook states that, Corporate Strategy describes a companys overall direction in terms of its general attitude toward growth and the management of its various businesses and product lines. Corporate strategies typically fit within the three main categories of stability, growth, and retrenchment (Wheelen Hunger, 2012, p. 19). refers to the plan of action, a sense of direction, and a corporate strategy refers to the overall scope and sense of direction to the organization on the whole. It represents the way in which the various business operations work together in the quest to achieve the organizational objectives. A corporate strategy should be formulated after taking into consideration the overall market and environmental analysis. Proper recognition of the mission, vision and objectives of the organization should be kept in mind before the formulation of the corporate strategy.