Define the three levels of planning and their respective strategies. Give an example of a strategy that can be applied at each level.

Question

What will be an ideal response?

Answer 1

The corporate-level plan contains top management's decisions concerning the organization's mission and goals, overall (corporate-level) strategy, and structure. Corporate-level strategy specifies in which industries and national markets an organization intends to compete and why. The corporate-level plan provides the framework within which divisional managers create their business-level plans.

At the business level, the managers of each division create a business-level plan that details (1) the long-term divisional goals that will allow the division to meet corporate goals and (2) the division's business-level strategy and structure necessary to achieve divisional goals. Business-level strategy outlines the specific methods a division, business unit, or organization will use to compete effectively against its rivals in an industry.

At the functional level, the business-level plan provides the framework within which functional managers devise their plans. A functional-level plan states the goals that the managers of each function will pursue to help their division attain its business-level goals, which, in turn, will allow the entire company to achieve its corporate goals. Functional-level strategy is a plan of action that managers of individual functions (such as manufacturing or marketing) can follow to improve the ability of each function to perform its task-specific activities in ways that add value to an organization's goods and services and thereby increase the value customers receive.

Student examples will vary, but every example should correspond to the purpose of the plan in each case: the market it chooses to compete in, a plan to give it an advantage over its rivals, and a plan to improve a department's efficiency.