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Three Levels of Strategic Decision Making

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Submitted By fortue
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Question 1. Discuss the three levels of strategic decision making with reference to an organisation of your choice.

Solution

Strategic decision-making is the process of developing and putting into action choices that will influence the long-term welfare of the organization. Strategic decisions are the decisions that are concerned with whole environment in which the firm operates, the entire resources and the people who form the company and the interface between the two. These choices often involve major organizational changes and large resource commitments that are difficult to reverse once they are implemented.
Strategic decision-making reflects decision makers’ experience, the positions they occupy and their organizational environment. Work on improving strategic decision-making has focused on the content of decision outcomes and the process that produces these outcomes. Strategic decision-making takes place within a context defined by the organization’s strategy and varies according to the extent to which this strategy is a deliberate, as opposed to an emergent, process.
The decision-making hierarchy of a firm typically contains three levels,the corporate level, business level and the functional level.
The corporate level, composed principally of a board of directors and the chief executive and administrative officers. In a multi business firm, corporate-level executives determine the businesses in which the firm should be involved. Corporate-level strategic managers attempt to exploit their firm’s distinctive competences by adopting a portfolio approach to the management of its businesses and by developing long-term plans, typically for a five-year period.

In the middle of the decision-making hierarchy is the business level, composed principally of business and corporate managers. These managers must translate the statements of direction and intent

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