Corporate strategy is a plan developed by management to achieve a specific goal, aligned with corporate objectives, executable within resources, and supported by tactical plans. It involves a clear statement of purpose, an assessment of potential gain or loss, and an analysis of resources. Tactical planning occurs at functional levels within the corporation, and contingency planning can be a corporate strategy. Management is responsible for developing the corporate strategy and communicating it effectively.
A corporate strategy is an overall plan developed by management to achieve a specific goal. It is characterized by being in line with all corporate objectives, being executable within corporate resources and supported by smaller tactical plans. The development of corporate strategies is a fundamental responsibility of management.
Strategic plans were first developed by military units, as warfare became more of a planned activity than just assembling opposing soldiers in the field. The concept of strategic planning applied to a corporate strategy involves many of the same factors employed by the military planner. These factors include a clear statement of purpose, an assessment of the potential for gain or loss, and an analysis of the resources needed to support the strategy.
The purpose of the corporate strategy must first match the stated purpose of the company. It can broaden the company’s mission, but usually doesn’t narrow it down unless that’s a goal. A company can be national and adopt the mission of becoming international. The corporate strategy is then developed to support this broader objective. A struggling company may choose a survival strategy of discontinuing international efforts to focus on domestic sales after realizing that the company’s new mission is to survive.
With insufficient resources, a new corporate strategy is a dream, not a plan. The strategy is reworked to open up more resources, changed in scope or revised to be a workable plan, or abandoned. Brute force planning is generally unsuccessful and is rarely strategic in nature. Being strategic encourages ingenious thinking, not dreaming.
A winning corporate strategy is broken down into tactical plans to allow for sufficient detail for resource specification. While strategic planning is the focus of management, planning at the tactical level will generally occur at functional levels within the corporation. Lower levels of management generally have more current and accurate knowledge of the requirements needed to execute their part of the overall plan.
Organization-wide contingency planning can be a corporate strategy. These plans address the actions that should be taken if certain human or natural events occur. The death of a key employee or a delayed delivery due to a storm are examples of everyday occurrences that companies can face. Contingency plans at a corporate strategic level can include plans that specify how to handle public reaction to a chemical spill, when to implement sales or stock repurchases during market swings, or establish travel restrictions to prevent loss of an entire management team in a plane crash.
Management is responsible for developing the corporate strategy. Your ability to communicate your strategic objectives to those who must implement the plans is often reflected in the success of the plans. Many strategic plans are kept secret to avoid competition. Management’s challenge is to share these plans appropriately.
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