According to Prasad (2001) every organization is involved in a complicated pattern of decisions from board of directors to specific decisions about the day to day processes. Some of these decisions have a long- term effect while others have only short- term effect. The emphasis of making these decisions have led to development of a new field corporate strategy.
Today every organization in any market sector wants to surpass its competitors and improve their market performance and market share and thus gain a competitive advantage against their competitors. Thus to gain competitive advantage an organization need to rethink about some of important factors like prices, product range, manufacturing quality, service levels etc. To achieve its objectives it needs to develop strategy options and then choose the most relevant option amongst them. According to Johnson and Scholes (1999) corporate strategy can be described as the identification of the purpose of the organization and the plans and actions it undertakes to achieve them. It is a link between organizations internal resources and its external relationship with its customers, suppliers, and competitors.
[...] In the case of Larsen and Turbo the company has been involving its lower and middle level management in making business strategic decisions as it feels only through decentralized decision making such a diversified company can be managed. The researcher concludes that although the CEO and Top Management makes the strategic business decision regarding the company but due to globalization and changing phase of the companies they should welcome suggestions and ideas from the lower level management. They should also involve them in making business level strategic decision which involves choosing strategies like Cost leadership, Differentiation, Niche strategies and also in formulating operational level strategies. [...]
[...] (Kazmi, 2002) Strategic decision making: Organizations are goal oriented and any organizational process, including decision making should also be goal directed to meet the organizational objectives. “Strategic decision is a major choice of actions concerning allocation of resources and contribution to the achievement of organizational objectives”. (Prasad pg.31). Strategic decisions are the choices that determine the direction and success of an organization. According to him although strategic decision makers are senior managers, entrepreneurs and leaders, increasingly those lower down the management structure are also being empowered with the responsibility for making strategic decisions. [...]
[...] The company formulated a 25 year plan and adopted a strategy of expansion that includes joint ventures, strategic alliances, and mergers as a part of its corporate strategies. Likewise its business level strategies have been stated at the level of each of the strategic business unit. For instance the lubes strategic business unit has a two pronged strategy of expansion from the petrol pump and of activating R&D. (Johnson and Scholes, 1999) Operational strategies: According to Johnson and Scholes (1993) operational strategies are concerned with how the components of the organization work together effectively and productively to achieve corporate and business level strategies. [...]
[...] In terms of structure the company has decentralized decision making and has encouraged the concept of strategic business unit. The company is decentralized for all practical purposes. Only in major decisions involving capacity augmentation, business diversification does the CEO involves himself. According to the CEO of the company Mr. Kulkarni “Only through empowerment and decentralized decision making can a highly diversified company like L&T be managed”. (Kazmi, 2002) According to Elbanna and Child (2007) strategic decision making process has always been a central managerial activity for all types of business organizations, large and small, profit and non-profit. [...]
[...] (Porter, 1996) Levels of strategy in an organization: The choice of strategies is wide and much would depend on how an organization perceives its strengths and weaknesses against opportunities and threats the external environment presents. In most of the large organizations, three levels of strategies exist: corporate, business & functional. Corporate level strategies: According to Kazmi (2002) corporate level strategies are basically about the choice of direction that a firm adopts in order to achieve its objectives. Corporate level strategies are basically about decisions related to allocating resources from one set of businesses to others, and managing and nurturing a portfolio of business in such a way that the overall corporate objectives are achieved. [...]
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