Skip to content

CMA Intermediate · Operations Management and Strategic Management · Formulation and Implementation of Strategy

A diversified Indian group has three levels of strategic decision-making. Which pairing of level with its typical time horizon and risk/uncertainty is most accurate?

Corporate-level strategy has a long horizon and high uncertainty, while functional-level strategy has a short horizon and lower uncertainty. Moving down the hierarchy, decisions become more detailed, narrower in scope and more certain, with business level sitting in between.

  1. ACorporate level: short horizon, low uncertainty; functional level: long horizon, high uncertainty
  2. BCorporate level: long horizon, high uncertainty; functional level: short horizon, low uncertaintyCorrect
  3. CBusiness level: shortest horizon; functional level: longest horizon
  4. DAll three levels: identical horizon and uncertainty, differing only in size

Explanation

Corporate decisions commit large resources over the long term under high uncertainty and are less detailed. Functional decisions are narrow, shorter-term, more detailed and have lower uncertainty. Reversing this order is the common error in the first option.

Did you get it right without looking?

One question tells you little. A timed set on Formulation and Implementation of Strategy shows your real accuracy, how long you take and where you lose marks.

Practise Formulation and Implementation of StrategyFree diagnostic mock

More Formulation and Implementation of Strategy questions