Hierarchy of Strategy

Enterprise Strategy = Concerned with determining the legitimacy of the organization

within its socio-economic environment. Related to the broader societal context (ethics,
social norms, etc.). More importantly, this is the link between the organization and basic
economic principles. These principles point out that organizations must justify their
access to finite resources taken from the environment. This also relates to the handout on
the primary objective of business.

Corporate Strategy = Corporations do not compete – their business units do. Corporations
are concerned with answering the question, what business or industry should we be in?
This is a resource allocation decision. Think portfolio management.

Business Strategy = Businesses compete within an industry. Business level strategy

addresses the question, how do we compete in this industry?

Functional Level = functional levels within organizations do not have missions or

strategies, they have objectives. Understanding these objectives was part of the courses
you took prior to Strategic Management.

As a refresher, here are the objectives of the four functional levels within organizations:
Management: to ensure the survival of the organization within its environment.
Finance: to maximize shareholder wealth.
Marketing: to maximize market share.
Operations: to improve productivity.