What is Corporate Level Strategy?
A corporate-level strategy is often referred to as a corporate strategy or a corporate business strategy. It encompasses the strategic scope of the entire organisation. For most organisations, a corporate-level strategy is the only strategic plan required.
Corporate strategy refers to a set of decisions that determine an organisation’s objectives, goals and purpose. It also comprises of the principal policies and plans to achieve those objectives. In short, corporate-level strategies are formulated to fulfil the corporate objectives of the organisation.
The corporate-level strategy sets the range of business activities of the organisation and the kind of economic and non-economic role it intends to play to the organisation, shareholders, employees, customers and communities.
Thus, the strategy, being comprehensive in nature, defines the business in which the organisation plans to operate. Corporate-level strategies are basically formulated to achieve the longterm organisational objectives. Therefore, these strategies are also known as grand strategies or master strategies.
Usually, the top management of an organisation formulate corporate-level strategies. These strategies are mainly concerned with decisions regarding the product or service to produce and the geographical location to target. Corporate-level strategies give a direction to an organisation to achieve its objectives.
In addition, these strategies determine resource allocation, such as how to allocate cash and equipment among various departments. Decisions regarding expansion policies or addition of new products also fall within the area of corporate-level strategies. Corporate-level strategies also involve decisions regarding establishing relationships with other organisations and competing with rival organisations.
Corporate-level strategies deal with the following major issues:
- Defining the type of business that an organisation should venture into
- Dividing the resources among different operations of the organisation
- Transmitting and transferring resources from one set of businesses to another
- Selecting and managing the investment portfolio of an organisation
- Deciding the nature and level of diversity required to exist in a particular business
- Determining the boundaries of the organisation, and how these boundaries should put impact on relationships among various parts of the business and other interest groups
- Determining on which basis the organisation should function. Should it be cooperative basis, mutually beneficial relationships or business?