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Corporate strategy

Corporate Strategy is defines as the art, science and craft of formulating, implementing and evaluating cross-functional decisions that will enable an organization to achieve its long-term objectives. It is the process of specifying the organization's mission, vision and objectives, developing policies and plans, often in terms of projects and programs, which are designed to achieve these objectives and then allocating resources to implement the policies, and plans, projects and programs.

In a world increasingly obsessed with private equity, the power of focus, and the discipline of debt, is there really a role for even the most mildly diversified firm and the corporate layer of management that such diversification necessarily creates?
Strategic management seeks to coordinate and integrate the activities of the various functional areas of a business in order to achieve long-term organizational objectives. A balanced scorecard is often used to evaluate the overall performance of the business and its progress towards objectives.
If we expand our horizons beyond merely adding value to including the critically important but typically overlooked problem of managing strategic uncertainty.

Strategic management is the highest level of managerial activity. Strategies are typically planned, crafted or guided by the Chief Executive Officer, approved or authorized by the Board of directors, and then implemented under the supervision of the organization's top management team or senior executives.
Strategy is about how to create and capture value in a specific product market. This highlights the importance of defining clearly the organization and product market that are the focus of strategy. Improving the competitive strategies of the operating units is the essence of corporate strategy. The corporate office should be focused on, for example, the identification and capture of synergies between operating units.

Strategic management provides overall direction to the enterprise and is closely related to the field of organization studies. In the field of business administration it is useful to talk about strategic alignment between the organization and its environment or strategic consistency. There is strategic consistency when the actions of an organization are consistent with the expectations of management, and these in turn are with the market and the context.
Strategic management is an ongoing process that evaluates and controls the business and the industries in which the company is involved; assesses its competitors and sets goals and strategies to meet all existing and potential competitors; and then reassesses each strategy annually or quarterly [i.e. regularly] to determine how it has been implemented and whether it has succeeded or needs replacement by a new strategy to meet changed circumstances, new technology, new competitors, a new economic environment., or a new social, financial, or political environment.

Strategic management techniques can be viewed as bottom-up, top-down or collaborative processes. In the bottom-up approach, employees submit proposals to their managers who, in turn, funnel the best ideas further up the organization. This is often accomplished by a capital budgeting process. Proposals are assessed using financial criteria such as return on investment or cost-benefit analysis. Cost underestimation and benefit overestimation are major sources of error.
The proposals that are approved form the substance of a new strategy, all of which is done without a grand strategic design or a strategic architect. The top-down approach is the most common by far. In it, the CEO, possibly with the assistance of a strategic planning team, decides on the overall direction the company should take. Some organizations are starting to experiment with collaborative strategic planning techniques that recognize the emergent nature of strategic decisions.
Corporate strategy is thinking more carefully and deliberately about how to enable operating divisions to pursue outsized returns without having merely to accept the risk that has historically accompanied such boldness. Greater returns at greater risk is, frankly, meaningless. Greater returns and the same or reduced risk? Now that's a worthwhile goal.

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