Three Levels Of Strategy: Key Differences Explained

There are three levels of strategy that run across an organization, with each playing a vital role in the success of a business. But what’s the difference between them?

There are typically three levels of strategy in an organization, all working together to help a business grow, scale, and compete for market dominance.

Think of it like the different players in a soccer team—multiple people assuming various roles to achieve the same objective. A conventional business consists of people at different levels of the organization working together to keep a business operating as it should and support wider organizational goals.

But what are the three levels of strategy in an organization, and what’s the difference between them? BusinessBecause spoke to business school experts to find out.

The difference between the three levels of strategy in an organization

Strategy is at the heart of any effective decision made by managers in an organization. A carefully planned out and intentional strategy will provide guidelines that can inform what business actions the employees of an organization need to take.

That could be a strategy to reach new customers, to enter a new market, or to rebuild a workforce around a specific goal.

On the other hand, a lackluster strategy that’s been implemented without any thought can result in a general lack of understanding among employees about a business and its environment.

Strategic decision making within any organization takes place on three levels. The difference between the three levels of strategy in an organization is the level at which they operate in a business. The three levels are corporate level strategy, business level strategy, and functional strategy.

These different levels of strategy enable business leaders to set business goals from the highest corporate level to the bottom functional level.

“For conventional organizations with a clear hierarchy, three levels of strategy are necessary to enable clear division of labor and accountability,” says Chengwei Liu (pictured), associate professor of strategy and behavioral science at ESMT Berlin.