Strategies: Better Alone or Together?

There are three levels of strategy: corporate, business, and functional. Even though corporate and functional strategies take place at different levels of organizations, they are related and they should be related if the goal is to reach operational excellence. In an organization, ordinarily, corporate strategy is established first, and corporate strategy guides functional unit strategies. It is important to note that the corporate strategy can be successful only when functional strategies of internal departments such as finance, marketing, human resources, production, information technology, and operations are coordinated so that strategic planning and execution bring efficient and effective results. In other words, functional strategies need to align vertically with corporate strategies.

One can think of functional strategies and overall corporate strategies as follows: functional strategies focus on narrow and only functional objectives. Let us assume that the corporate strategy of a company is to have high customer satisfaction. Once the functional department leaders know this goal, they can build functional strategies that help the company to reach its organizational goals with corporate strategies. For example, in this case, creating durable and high-quality products are the objectives that production department targets. This objective of the production department should eventually align with corporate strategies. As we can see, durable and high-quality products can result in product improvement, which contributes to high customer satisfaction. In conclusion, strategies, priorities and decisions should align enterprise-wide, and everyone in the company, from bottom to top, should have the right mindset and behaviors to deliver promised results.