Page 36 - Operations Strategy

WHAT is OPERATiOns sTRATEgy And HOW is iT diffEREnT fROm OPERATiOns mAnAgEmEnT? 11
None of these four perspectives alone gives the full picture of what operations strat-
egy is. But together they provide some idea of the pressures that go to form the content
of operations strategy. We will treat each in turn (see Figure 1.5).

how should operations strategy reflect higher-level strategy? the top-down
perspective

An operations strategy must reflect the decisions taken at the top of the organisation,
which set the overall strategic direction of the organisation. This is called a ‘top-down’
approach to operations strategy. So, if the organisation is a large, diversified corporation,
its corporate strategy will consist of decisions about what types of business the group
wants to be in, in what parts of the world it wants to operate, what businesses to acquire
and what to divest, how to allocate its cash between its various businesses and so on.
Within the corporate group, each business unit will also need to put together its own
business strategy, which sets out its individual mission and objectives, as well as defining
how it intends to compete in its markets. Similarly, within the business each function will
need to consider what part it should play in contributing to the strategic and/or competi-
tive objectives of the business by developing a functional strategy that guides its actions
within the business. So, in the ‘top-down’ view, these three levels of strategy – corporate,
business and functional – form a hierarchy, with business strategy forming the context
of functional strategies and corporate strategy forming the context of business strategies.

Figure 1.5 Four perspectives on operations strategy – top-down, bottom-up, market
requirements and operations resources

Top-down
Operations strategy
should interpret
higher-level strategy

Market requirements
Operations resources
OPERATIONS
Operations strategy should STRATEGY Operations strategy
should satisfy the
build operations capabilities
organisation’s markets

Bottom-up

Operations strategy
should learn from
day-to-day
experience

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