CA Intermediate · Financial Management and Strategic Management · Introduction to Strategic Management
Ramesh, CEO of a Coimbatore pump maker, wants to describe strategic management to his board. He says strategy formulation decisions are usually long-term, involve major resource commitments, are hard to reverse, and affect the whole firm. Later he is asked which of the following is NOT a typical characteristic of strategic decisions. Which should he choose?
Being routine, repetitive and easily reversible is not a characteristic of strategic decisions. Strategic decisions are long-term, need top management involvement, commit major resources and are difficult to reverse, whereas routine and reversible decisions belong to the operational level.
- AThey are routine, repetitive and can be easily reversedCorrect
- BThey require top management involvement
- CThey have major resource implications
- DThey are concerned with the long-term direction of the firm
Explanation
Strategic decisions are non-routine, significant, long-term and not easily reversible, and they are taken at top level. Routine, easily reversible decisions are operational. So the first option is not a characteristic.
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