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

Which of the following best describes the nature of strategic management decisions as taught in the ICAI study material?

Strategic management decisions are long-term, major, top-level decisions that commit substantial resources and are difficult to reverse. They shape the whole organisation's direction, unlike routine operational decisions that are short-term, departmental and concerned with day-to-day activities.

  1. AThey are routine, repetitive decisions taken by supervisors with predictable outcomes
  2. BThey are long-term, major decisions made at top level that commit significant resources and are not easily reversibleCorrect
  3. CThey are short-term decisions limited to a single functional department
  4. DThey are decisions concerned only with day-to-day cost control

Explanation

Strategic decisions deal with the long-term direction of the organisation, are taken by top management, need large resource commitment and are hard to reverse. Routine, departmental and day-to-day cost decisions are operational in nature, so the other options are wrong.

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