Certified Production & Operations Manager (POM) Practice Exam

What is true about the relationship between corporate mission and corporate strategy?

1. Corporate mission is shaped by corporate strategy

2. Corporate strategy is shaped by functional strategies

3. Functional strategies are shaped by corporate strategy

4. External conditions are shaped by corporate mission

The correct answer is: Functional strategies are shaped by corporate strategy

The relationship between corporate mission and corporate strategy is foundational for guiding an organization's overall direction. The corporate mission defines the purpose and values of the organization, essentially outlining its reason for existence. This mission acts as a compass for decision-making and helps establish objectives aligned with the company’s identity and long-term vision. Corporate strategy, on the other hand, is developed to achieve the goals set forth in the corporate mission. This involves making decisions about resource allocation, market positioning, and competitive approaches to fulfill the mission's objectives. In this context, functional strategies—which pertain to specific departments or operations—are aligned and derived from the overarching corporate strategy, ensuring that every part of the organization is working towards the same mission. The correctness of understanding functional strategies being shaped by corporate strategy highlights that these functional strategies are informed by the goals and directions outlined by the corporate strategy. Therefore, it underscores the integral alignment that exists from mission to strategy to functional execution, ensuring cohesive organizational behavior and purpose. This relationship reinforces the idea that to execute a company's mission effectively, strategies at the corporate level must dictate how various functions operate to achieve that mission.