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CS Professional · Strategic Management and Corporate Finance · Introduction to Strategic Management

Anand Textiles Ltd has a CEO who personally negotiates a joint venture, allocates resources among its three business divisions, and communicates the strategic vision to employees. Which statement best captures the CEO's position in strategic management?

The CEO is the chief architect of strategy. He or she shapes and formulates strategy, allocates resources among businesses, and leads implementation and communication of the vision. The role is not limited to ratification, operations or audit coordination, because the CEO carries overall responsibility for strategic management.

  1. AThe CEO is the chief architect of strategy, responsible for strategy formulation and for leading its implementationCorrect
  2. BThe CEO's role is limited to ratifying strategies framed by shareholders at the AGM
  3. CThe CEO is only an operational manager and not a strategist
  4. DThe CEO's role is confined to statutory audit coordination

Explanation

The CEO is regarded as the principal strategist, who formulates strategy, allocates resources and leads implementation and communication. Shareholders do not frame strategy at the AGM, so the ratification option is wrong. The CEO is clearly more than an operational manager.

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