Lecture seventeen

1. Strategy formulation
 Setting organisational objectives
 evaluating the organisational environment
 Setting targets
 Performance analysis
 Choice of strategy

A recap:
 Choice of strategy
Strategy development and implementation occur at different levels (three in
number) in the business organisation, hence levels of strategy.
The three levels are:
- Corporate-level strategy or simply corporate strategy
- Line-of-business strategy or simply business strategy
- Functional-level or operational-level strategy or simply functional strategy

At the corporate level, strategy is formulated for the business organisation as a

whole.

Main Lecture
We end discussion on the corporate strategy by looking at the strategy-making
hierarchy; that is, who has primary responsibility for what kinds of strategy
actions?
This can be considered under three main columns, namely;
- Strategy level
- Primary strategy development responsibility
- Strategy-making functions and areas of focus
Elaboration
Strategy level
Under this we have corporate strategy

Primary strategy development responsibility

Under this we have chief executive officer, other key executives, whereby
decisions are typically reviewed/approved by boards of directors.

Strategy-making functions and areas of focus

- Building and managing a high-performing portfolio of business units
(making acquisitions, strengthening existing business positions, divesting
business units that no longer fit into management’s plans)
- Capturing the synergy among related business units and turning it into
competitive advantage
- Establishing investment priorities and steering corporate resources into
business units with the most attractive opportunities
- Reviewing/revising/unifying the major strategic approaches and moves
proposed by business unit managers

Note
This strategy-making hierarchy guides the crafting process, whereby it demarcates
responsibilities and strategy actions for various individuals in the business
organisation.
Example
At the corporate level, the vice-chancellor’s vision at Batho Private Institution
could be to reduce Faculty budgets by 25% every academic year. This may
necessitate Deputy Vice-chancellor (Academic) to engage in cost-reduction
campaign, and one such could be to review programmes under his constituency, in
light of increasing attraction of candidates for intake.
‘Conclusion’
There would definitely be some divestiture of some programmes in the process,
while those with better prospects shall be allocated more resources. These are done
by the executives in respect of their strategy-making functions and areas of focus
in the exercise.

End of Lecture seventeen