CMA Intermediate · Operations Management and Strategic Management · Introduction to Strategic Management
A firm's business strategy is differentiation based on superior quality. Which functional-level decision is most consistent with supporting this strategy?
Investing in tighter quality control and training skilled workers best supports a quality-based differentiation strategy, because functional strategies must implement the business-level strategy. Cost-cutting on inspection or inputs conflicts with it, and entering unrelated businesses is a corporate-level decision rather than a functional one.
- AInvesting in tighter quality-control systems and skilled workforce trainingCorrect
- BCutting inspection staff to reduce unit cost
- CSwitching to the cheapest available raw material
- DAdding new unrelated businesses to the portfolio
Explanation
Functional strategies must align with and implement the business strategy. A quality-based differentiation needs strong quality systems and skills. Cutting inspection or using cheapest inputs contradicts it, and adding unrelated businesses is a corporate-level matter.
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