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CA Final · Advanced Financial Management · Financial Policy and Corporate Strategy

Tarang Industries, a diversified Indian group, has a board that decides which businesses to enter or exit, how capital is allocated across its textile, power and retail divisions, and the overall mix of debt and equity. Which level of corporate strategy do these decisions represent?

These are corporate-level strategy decisions. Choosing which businesses to enter or exit, allocating capital among divisions and setting the overall financing mix concern the whole group, whereas business-level strategy deals with competing within a single business unit.

  1. ACorporate-level strategyCorrect
  2. BBusiness-level strategy
  3. CFunctional-level strategy
  4. DOperational-level strategy

Explanation

Decisions on portfolio of businesses, entry or exit and allocation of resources across divisions are made at the top and define corporate-level strategy. Business-level strategy concerns how one unit competes in its market, which is not the focus here.

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