To establish the vision of the firm, stating of corporate objectives, and strategic thrust areas, defining a comprehensive corporate philosophy and values, identifying the domains in which an organization would operate, learning and recognizing worldwide business trends, and allocation of resources in line with corporate priorities, are some of the key areas wherein top management of organizations take decisions.
1. Strategic Issues for Sharing of Concern and Resources
To meet certain specific needs of certain customers, use of common upgraded technologies by certain business units, deployment of people, physical assets or money from internal or external sources and to achieve economics of scale in deployment, certain decisions may be taken by the management.
2. Strategic Issues Likely to have Long Term Impact
Strategic decisions for implementing a course of action have broad implications and long-term ramifications and the people of an organization have to commit themselves to the decisions and plans for a long period of time. Once a firm takes strategic decisions and implements the action programs, the impact is seen slowly on its competitive image and the advantage tied to the particular strategy start pouring in. The companies become known in certain markets, products, or technologies or the decisions may adversely affect the previous progress.
In today’s business world, where changes are by leaps and bounds, some organizations may decide for radical changes through re-engineering of their business processes to gain strategically better position
3. Strategic Directions are Futuristic
Strategies are essentially for the future. Strategic decisions are taken based o forecasts that are in turn based on available data on trends. The managers involved in strategic planning concentrate on developing projections that would take the company to better strategic position. The companies thus become proactive rather than being reactive to business situations.
4. Strategies have Multi-functional and Multi-business Effects
Every company has several business units. Strategic decisions are coordinative in nature among all the business units of the company. Many strategic decisions on product mix, competitive edge, organizational structure etc. affect various departments and functions that may be classified as strategic business units (SBUs). Each of these units get affected by the decision taken at the top level, regarding allocation of resources and deployment of personnel etc. So, Business Strategy as a discipline focuses at the organization as one single unit.
5. Strategies are Defined Based on Study of Environment
The organization culture internal to the organization and also the external environment must be thoroughly scanned and studied to decide on strategies. The interaction between the organizations and the external environment affects both of them. The organization tends to change the environment and the same environment makes an impact on the organization. The firms have to define their strategic position with regard to the environment and decide strategies that will take it to the desired position. The firms are part of the system, where customers, stake holders, competitors etc. exist and the firm cannot remain insulated from these determinants of the external environment.