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

Sundaram Textiles Ltd. has a vision of becoming India's leading sustainable apparel exporter. Its board then decides to enter European markets by acquiring a small organic-cotton brand, and subsequently the finance head sets quarterly working capital limits for each plant. Which classification of these three items is correct?

The vision is strategic intent, the acquisition to enter Europe is a corporate-level strategic decision about business scope, and the quarterly plant-wise working capital limits are operational or functional-level actions. The levels differ by time horizon, scope and resources involved.

  1. AVision is a strategic intent; the acquisition is a corporate-level strategic decision; the working capital limits are operational/functional-level actionsCorrect
  2. BVision is an operational plan; the acquisition is a functional tactic; the working capital limits are strategic intent
  3. CAll three are corporate-level strategic decisions
  4. DVision is a functional policy; the acquisition is an operational action; the working capital limits are strategic intent

Explanation

The vision expresses long-term strategic intent. Acquiring a brand to enter new markets is a corporate-level decision about the scope of the business. Quarterly working capital limits per plant are short-term, operational or functional matters. Treating all three as corporate-level ignores the hierarchy.

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