What Are the Functions of a Corporate Strategy Department?
A corporate strategy department in a large company has several important jobs. First and foremost it must help determine the future direction of the company. It performs this task by looking at existing business lines and examining the profitability or opportunities available for the company. It also observes similar businesses and evaluates whether to enter those new industries through growth or acquisition.
The corporate strategy department has the responsibility for the corporate plan and generating the strategy going forward. This is actually one of the smallest responsibilities of the department due to the fact that the CEO usually prefers to create the overall strategy for the firm. The strategy department is also competing with outside consultants to generate the company direction. So, while generating strategy is a role for the department, it is not the primary function.
Another critical responsibility for the department is to facilitate the corporate strategy. This means that it will monitor developments to ensure that they are running smoothly. The Chief Strategy Officer, who heads the department, will evaluate the strategy and challenge each department head or specific employees within departments on how the strategy is being executed.
Another important role for the group is to actually execute the strategy. While it may not have the responsibility of building a new product or selling a new service, it works closely with managers and employees to ensure implementation. The department will establish milestones and long-term goals and monitor closely to ensure that those objectives are achieved. Their are often accountants or employees with fiance backgrounds in the strategy department to craft the metrics that it applies.
Although it is different in each firm, the strategy department always has some input into the process of buying or divesting companies. It prepares analysis of potential target firms and evaluates whether it coincides with the firm's overall strategy. In addition, the department may recommend that one division is not performing well and should be sold off. It may also recommend that a division does not fit in with the overall strategic direction of the firm or does not bring any economies of scale so it can be divested.