Before we learn how strategic decisions are made, it is important to understand the two principal components of any strategic choice; namely, long-term objectives and the grand strategy. The purpose of this chapter was to convey that understanding.
Long-term objectives were defined as the results a firm seeks to achieve over a specified period, typically five years. Seven common long-term objectives were discussed: profitability, productivity, competitive position, employee development, employee relations, technological leadership, and public responsibility. These, or any other long-term objectives, should be acceptable, flexible, measurable over time, motivating, suitable, understandable, and achievable.
Grand strategies were defined as comprehensive approaches guiding the major actions designed to achieve long-term objectives. Fifteen grand strategy options were discussed: concentrated growth, market development, product development, innovation, horizontal integration, vertical integration, concentric diversification, conglomerate diversification, turnaround, divestiture, liquidation, bankruptcy, joint ventures, strategic alliances, and consortia.
