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

Bharat Auto Components decides to enter the electric vehicle parts market, committing large funds and shifting its whole plant layout. The decision is hard to reverse and will shape the firm's direction for a decade. Which feature of strategic decisions is MOST clearly shown?

The scenario shows that strategic decisions involve major resource commitment and are not easily reversed. Large funds, a plant redesign and a decade-long direction change all indicate a long-term, hard-to-undo decision, unlike routine, supervisory or short-term departmental decisions.

  1. AThey are routine and repetitive in nature
  2. BThey are taken only by supervisory-level managers
  3. CThey involve major resource commitment and are not easily reversibleCorrect
  4. DThey have only short-term and departmental impact

Explanation

Strategic decisions involve substantial resource commitment, long-term impact and low reversibility. The scenario stresses large funds, plant changes and a decade-long effect. Routine, supervisory or short-term departmental characterisations are the opposite of strategic decisions.

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