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CS Professional · Strategic Management and Corporate Finance · Business Policy and Formulation of Functional Strategy

Which statement best describes a functional strategy in a multi-level strategy hierarchy of a company?

A functional strategy is a plan for a specific functional area, like marketing, finance or HR, designed to support and implement the business-level strategy. Corporate-level strategy decides the industries to be in, while functional strategy focuses on how each function contributes to competitive advantage.

  1. AA long-term plan that decides which industries the whole group will enter or exit
  2. BA plan for a specific functional area such as marketing, finance or HR, that supports the business-level strategyCorrect
  3. CA statement of the company's vision and mission approved by shareholders
  4. DA short-term budget that allocates cash among the divisions

Explanation

Functional strategy translates business-level strategy into the action plans of a particular function, such as marketing, production, finance or HR. Option A describes corporate-level strategy. Option C describes vision and mission, and option D is a financial budget, not a strategy.

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