1. Learning Unit 3.3 Levels of Strategic Management 5 May 2011
Public Relations PURE311
Learning Unit 3.3
Levels of Strategic Management
5 May 2011

2. Outcomes Levels of strategic management
Corporate environments in strategy development
Mission statements
Case Study Shell South Africa
5 May 2011
DPR3 LU3.3 Strategic Management Levels

3. Strategic management levels
According to Steyn & Puth (2000)
Hierarchical levels of organisations result in the need for different strategies at different levels of the organisation
Vision and mission guide strategic intent, which informs overall goals and objectives
Strategic intent translated into strategies for different business units to guide their activities
Business unit strategies translated into strategies for different functions within business units, such as Human Resources, Public Relations, Finance, to assist the organisation achieve its goals
Five levels of strategy: Enterprise  Corporate  Business  Functional  Operational
5 May 2011
DPR3 LU3.3 Strategic Management Levels

4. Enterprise strategy
Broadest scope with a societal-role strategy that may not be implicitly or formally stated
Concerned with mission, purpose and role in society
Addresses
Why it exists and attempts to provide to society
Sectors it forms part of
How it functions in society
Stakeholder orientation
Development path
Strategic thinking; vision, mission, role; relationship with environment; stakeholder orientation
5 May 2011
DPR3 LU3.3 Strategic Management Levels

5. Corporate strategy Financially orientated Addresses the questions of:
Which business portfolios organisation should compete in
How portfolio should be integrated
This level of strategy often combined with enterprise level
Development path
Defines and unifies business portfolios
Complementary, reinforcement attributes of business units
Resource allocation to different business levels
Enterprise strategy level support
Financial orientation puts focus on bottom line
5 May 2011
DPR3 LU3.3 Strategic Management Levels

6. Business unit strategy
Covers a single product or group of related products
Focus is on how to compete in specific product or market segment
Strategies are often market-orientated
Development path
How to compete in product, market or industry segments
Identifies niche
Integrates functional levels for competitive advantage
Supports enterprise or corporate strategy
Strategy is marketing-orientated to ensure that products/ services are accepted and acquired to help organisation achieve its goals
5 May 2011
DPR3 LU3.3 Strategic Management Levels

7. Functional strategy
Concerned with implementation of organisation’s strategies
Developed for each functional area of organisation
Marketing, public relations, human resources, finance
Focus on
Maximising productivity of resources
Capitalising on synergies and distinctive competencies within organisations
Development path
Relates function to the enterprise, corporate, business levels to support those strategies
Coordination with other functions
Focus of strategy on capitalising and synergising
5 May 2011
DPR3 LU3.3 Strategic Management Levels

8. Operational strategy
Organisational strategies translated to action at operational levels in organisations
Operational strategies have short-term objectives that contribute to business and corporate goals
These strategies are necessary to manage operating units in a cost-effective manner
Development path
Translates organisational strategy into action
Develops functional tactics
Maximises resources and productivity
Orientated towards cost-effective performance and outputs
5 May 2011
DPR3 LU3.3 Strategic Management Levels

9. Levels of strategy
Public Relations helps with strategy implementation at all levels
Corporate and environmental levels impact on strategies
Different units/divisions operate under the umbrella of the holding company and all strategies flow from one level to the next
Example: BIDVEST
Group has enterprise strategy that guides overall business and directs 10 divisions world-wide
One division, Bidfreight, develops a corporate strategy which flows from enterprise strategy
A Bidfreight company, Safcor Panalpina, develops a business strategy
Each of the functions of Safcor Panalpine develops a functional strategy to help achieve goals and objectives of business strategy
Each functional strategy translated into operational strategy for implementation
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DPR3 LU3.3 Strategic Management Levels

10. Class exercise
Individually, read the case study on Shell South Africa (pp in your student manual), discuss it in your group and answer the question:
Identify the different levels of strategy, either explicitly or implicitly stated in the case study. Use quotations from the case study to motivate your point.
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DPR3 LU3.3 Strategic Management Levels

11. Corporate environment: internal
Public Relations practitioners must be familiar with organisation’s internal an external environments to develop communication strategy and policy
Internal environment
Profile – financial stats, reputation, products and services, overall competitive environment
Vision – realistic, attractive, credible future state of affairs, associated with goals
Mission – purpose, definition of role in society and economy, flows from values of stakeholders, explains organisation’s identity and ambition, associated with the way of behaving
5 May 2011
DPR3 LU3.3 Strategic Management Levels

12. Corporate environment: internal
Internal environment
Corporate values – sets of real beliefs that determine standards of practice, commitment and energy of staff are fuelled by values that drive organisation
Corporate philosophy – orientation behind mission, derived from values, acts as guiding principles that drive behaviour including employee involvement, empowerment, customer service, quality control, continuous change, community involvement
Corporate culture – shared values conveyed symbolically, not written down, basic assumptions about what is acceptable and not
Corporate policy – expression of strategy and plans as guiding principles for behaviour and actions, provides direction
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DPR3 LU3.3 Strategic Management Levels

13. Corporate environment: external
Total of all conditions and forces that
affect strategic options
influence competitive situation
cannot be controlled
Four categories
Remote environment (macro/societal) – sectors that affect indirectly by influencing long-term decisions
Factors: social, economic, political, ecological
Industry environment (competition) – five forces that shape competition, collection of global, local organisations that offer similar products, services
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DPR3 LU3.3 Strategic Management Levels

14. Corporate environment: external
Four categories [cont]
Operating environment (task environment) – sectors that have direct transactions with organisation, influences day-to-day operations and goal attainment, including customers, suppliers, competitors, creditors
Functional environment (specialisation) – specialisation functions including finance, human resources, operations, administration, marketing, public relations, research & development
Example using the PESTEL analysis: local, national and global factors or the LONGPESTEL analysis: political, economic, social, technological and legal factors within the local, national and global contexts
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DPR3 LU3.3 Strategic Management Levels

15. Homework for May 2010
Read the case study in your student manual on pp and respond to the question
Write out your response for feedback to and discussion in class
5 May 2011
DPR3 LU3.3 Strategic Management Levels