Skip to content

CA Intermediate · Financial Management and Strategic Management · Introduction to Strategic Management

Asian Paints is deciding whether to enter the home-décor services market. The board is committing large resources, the decision will be hard to reverse, and it will shape the firm's long-term scope. Which characteristic of strategic decisions does this scenario chiefly illustrate?

The scenario shows that strategic decisions carry major resource implications and are not easily reversed. Entering a new market commits large funds, affects long-term scope and cannot be undone cheaply. Routine, single-department or short-term matters are operational in nature and do not fit this situation.

  1. AThe decision is routine and can be delegated to supervisors
  2. BThe decision has major resource implications and is not easily reversibleCorrect
  3. CThe decision concerns only a single functional department
  4. DThe decision has an immediate, short-term payoff

Explanation

Strategic decisions involve large resource commitment, affect long-term scope and are difficult to reverse. The scenario states each of these features. Routine delegation, single-department focus and short-term payoff are features of operational decisions, so they are wrong.

Did you get it right without looking?

One question tells you little. A timed set on Introduction to Strategic Management shows your real accuracy, how long you take and where you lose marks.

Practise Introduction to Strategic ManagementFree diagnostic mock

More Introduction to Strategic Management questions