What Is Corporate Strategy ?
Corporate-level strategy is focused mainly on the decisions over the scope of the firm 's activities, mainly: product scope, geographical scope, and vertical scope. One of the myths of corporate-level strategy is that strategy formulation can be separated from implementationthat strategy is constructed first, then the appropriate management and organizational structure is selected afterwards. Unfortunately, this will result in a poorly designed strategy since it does not take into account the conditions under which it will be implemented. For this reason it needs to be recognized that strategy and structure are interdependent on each other. Basically, as Tom Peters said, "Strategy is structure."
To understand corporate-level strategy, one must first observe the transformation of the corporation over time. Firms first came to exist because they were more efficient in organizing production than were market contracts between individual workers. From the early 19th century through the present, a significant evolution of the corporation has taken place. Early in the 1800s, companies took on a very simple structure. They usually had one owner, took place in only local markets, and used very slow means of transportation. The strategic focus of these simple corporations was on specialization and focus on local markets. Here only "word of mouth" was needed to command employees. By the late 1800s companies had transformed into more of a functional organizational structure. With the introduction of the railroad system and telegraphs, firms strategically expanded both geographically and vertically, and could now increase their product lines offered. These corporations now had a distinction between line and staff, and accounting systems. Then early in the 20th century firms moved to a more divisional structure with excess capacity in distribution and the growth of financial institutions and world trade. At this point many fledgling corporations changed
To understand corporate-level strategy, one must first observe the transformation of the corporation over time. Firms first came to exist because they were more efficient in organizing production than were market contracts between individual workers. From the early 19th century through the present, a significant evolution of the corporation has taken place. Early in the 1800s, companies took on a very simple structure. They usually had one owner, took place in only local markets, and used very slow means of transportation. The strategic focus of these simple corporations was on specialization and focus on local markets. Here only "word of mouth" was needed to command employees. By the late 1800s companies had transformed into more of a functional organizational structure. With the introduction of the railroad system and telegraphs, firms strategically expanded both geographically and vertically, and could now increase their product lines offered. These corporations now had a distinction between line and staff, and accounting systems. Then early in the 20th century firms moved to a more divisional structure with excess capacity in distribution and the growth of financial institutions and world trade. At this point many fledgling corporations changed